.......THE BUDGET........

Hi property lovers

Well, well well, after much waiting and guessing, Wayne Swan and Kevin Rudd have delivered one of Australia's most anticipated budget in the nations history! With the nation in a deficit of $57.6 Billion and now Mr Swan saying the Commonwealth finances will be in the RED until 2015.

THE Government says it's one of the most difficult ever peacetime Budgets but there were winners among the losers.Home buyers, pensioners, students and parents-to-be were among the winners, but what does this mean to you as home buyers/owners and investors?

Firstly, It was one of the most hotly anticipated issues leading up to the Treasurer's speech, and now we know the boost to the first home owners grant will be continued in full until October 1. From then, it will be halved to $10,500 for existing homes, and $14,000 to new homes. The boost will end on December 31, although the existing $7000 first home owners grant will continue. Kevin Rudd had previously hinted the boost would end by prophesising "all good things must come to an end" in the weeks leading up to the Budget. The boost to the grant has cost the Government around $480 million this year. Mr Rudd's comments sent prospective first-time buyers into a panic, sparking a rush on weekend house auctions and home opens.

Since the introduction of doubling the first home owners grant come into play in October last year, Perth's property market has slowing been creeping back, especially in the last several months of the year, with not only the lower end of the market showing a significant number of sales, but also the middle and top end seeing the highest number of sales in over a year.

There was grave concerns that if the Government didn't extend the grant in the budget, The property market would loose its current momentum and yet again calapse. Many property experts are still very wary regarding the extension of the grant, fearing many first time buyers will flood into the market before the grant finishes in October, but with unemployment on the rise this could mean many will default on the mortgage re-payments causing a mini "Sub-Prime' effect bringing house prices even lower in value.

But its not all doom and gloom, If the unemployment level can stay at a reasonable level (even though unemployment is due to hit 8.25% in 2010/11, this equates to 1 million out of work) and confirmation of a third stimulus package focusing on infrastructure, with $575m being handed to WA from the Commonwealth to sink the Northbridge rail line and to develop the Oakejee Port North of Geralton. "The part that government, both state and the commonwealth will fund is the common user infrastructure which we (government) will own and control and charge for. That runs to about $700 million. Beyond that will be private sector investment – in total around $4 billion."

This will no doubt create mass amount of jobs for West Australians with works to start for both projects in 2010. This will be a major boost for the West Australian economy over many years.

So how does this effect you.......the property lover?

Prices will continue to stabilise and with the government backed First Home Buyers grant and infrastructure projects. Unemployment will continue to rise but not explode.

Interest rates should remain around the same level with a possible future reduction, there for short-medium term affordability is looking good- making NOW an excellent time to seriously look!! And now with confidence returning, the buyers are attracted to properties that offer VALUE for money.

So, if you are considering a move, may i suggest a realistic up to date appraisal be your first step in the process.

I would love to here any input you property lovers have on this budget or my thoughts. Please feel free to comment below.