LMI incentive for FHB in NSW

NSW announced a new incentive for 10,000 FHB, get the LMI waived with the govt going guarantor.

Linky

Will this spur the market on, drag out the first home buyers or be a kick in the guts for them pushing up prices?

Will FHB decide to refinance as soon sad values increase and their equity exceeds 20%? Or will they stay in ignorant bliss?

Does this form of incentive force up prices or will it put market entrants on a similar footing to investors who are able to access equity rather than using cash?

 

Its allowing people with no financial discipline to purchase an asset that they may not be able to afford, what could possibly go wrong?
I expect prices within the cap to be pushed up by higher demand while there are places available in the scheme, once the places are filled i think demand will die down again.
My opinion is they are hoping the first home buyers initially rushing the market will bring rise to FOMO in the greater masses, people tend to follow the crowd.

 

Investors are already back in the under $650K space. Now they have to deal with emotional FHBs who, in my experience, make offers above MV as they get panicky about the possibility of missing out. This does cause some price rises in this segment.