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In the United States, the GDP registered 3.5% increase in the third quarter – for the first time in twelve months. Similarly, the once-ailing property market has shown great improvements since last winter.
Are our neighbours beginning to come out of the recession? There is still a large surplus of property stock available, about 8 months worth. Even though this may sound a massive number, think about the fact that in January of this year the property stock was at a massive 12 months plus. The tax credit for first time buyers is now being observed very carefully by potential buyers and also by real estate agents.
The opportunity to be awarded a $8,000 tax credit (or even cash back, if the recipient’s income tax doesn’t reach this level) has been a robust energizer for the US real estate market. All nice things must come to an end and these tax credits are due to finish soon, leading to nervousness amongst the market watchers. When the tax credits are no longer on the table what is going to happen to the property market?
Lawmakers have already prepared an extension bill, which may push the cut off further to the year 2010. Senate has already cleared the path for the law, which may reach Obama this week or next. Not only is the time frame about to be continued till April 30, the allowable income threshold for couples will also jump to $225,000. As not to miss anyone out there is also a $6,500 tax credit to be attached to the bill for those members of the public who want to climb the property ladder.
If this bill goes through, then the lures offered should encourage the movement within the property market, but the question is - how is the budget going to finance it?
