Rudd's FHBG to prevent recession

Kevin Rudd’s first-home buyers grant may be enough to allow the country to sidestep a recession, one financial expert reckons.

Speaking to Business Daily, Paul Lahiff said that the sharp increase in the number of first-home buyers looking to make full use of low-interest home loans and get on the property ladder is likely to result in a sharp increased demand for things like building materials, which may be enough to avoid a recession.

Official figures released earlier this month showed that the country was heading towards a recession faster than many feared.

However, Mr Lahiff said he was confident that Rudd’s help for first-home buyers would be enough to prevent a major nosedive in the economy.

Meanwhile, the head of retail at the Commonwealth Bank of Australia has also told the paper that the institution has seen the number of applications for low-interest home loans skyrocket since the Reserve Bank of Australia (RBA) began its rate-cutting bonanza in September 2008.

The RBA has taken a total of 400 basis points off interest rates in consecutive cuts since then, although it put down its scissors this month, leaving base interest rates at 3.25 per cent.ADNFCR-1761-ID-19064522-ADNFCR