First Home Buyers already in Mortgage Stress

Did the Government's First Home Owner grant really assist young people into the housing market, or did it just entice buyers who were not yet financially ready for home ownership? That's the question posed by Nick Gardner in the Sunday Telegraph. A survey has revealed that 45% of first home buyers who took advantage of the Government's stimulus grant are already experiencing mortgage stress, and those numbers are likely to worsen as interest rates continue to rise.
"The dream of home ownership has turned sour for many thousands of first home buyers now the reality of rising interest rates is kicking in", says Martin North of Fujitsu Consulting, who conducted the survey. The survey found that thousands of young home-buyers are using credit cards and other loans to meet their increasing mortgage payments.
Last year Steve Keen of the University of NSW said that the homeowner grants were a disaster waiting to happen, and already it looks as though his prediction is coming true.