Builder Incentives

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In Queensland, Stockland Properties is offering homebuyers up to $17,600 cash back to put into the mortgage while other lenders and developers are offering between $5000-10,000 cash, as money or coupons to spend.

In NSW Australand aims to entice with $5,000 wish cards to spend at Woolworths on food and petrol. Landcom is giving away a $10,000 fishing boat. There's $5,000 vouchers to spend at Harvey Norman and Caltex. $1,500 credits good for Telstra phone bills and Foxtel.

There was even a one in ten chance to win a $70,000 Mercedes Benz.

Then there's up to $20,000 for landscaping or to pay for design and fittings for your new home.

In Victoria, Metricon Homes is upping the new first home buyers grants with an extra $16,000 on top of the new Federal and State bonuses.

First homebuyers Sean Akkermans and Mirela Shiel's will soon build their dream home, courtesy of $21,000 from the Federal Government, another $5,000 from the Victorian Government, plus a $16,000 kick-start from the builder.

In WA, Dale Alcock Homes are offering $4000 cash back, while the Satterly Property Group is stumping up $27,500 for some home buyers for landscaping, fencing, solar panels, a rain water tank and an energy saving package.

In South Australia, Fairmont Homes is offering free ducted cooling and a range of other bonuses in their "Fairdeal" pack.

In addition to their regular bonus of a garage at a carport price, Distinctive Homes is celebrating their 25th anniversary with a free split air-conditioning or discounted ducted system.

Devine Homes is offering to pay your rent´┐Ż up to $250 dollars a week while they build, and you'll get a stack of free upgrades at Henley including stainless steel cookers and dishwashers, even a designer spa bath or an alfresco at no extra charge.

"A lot of people see these incentives as being disingenuous, they're a deal that is trying to get people to buy their product but it's being added to the price and that's what concerns me," said Finance Broker Wayne Ormond.

Many commentators and experts have slammed these giveaways, as well as the increased grants for first homebuyers. Why? Because they fear these "freebies" will only add to the debt that people take on. Debt they'll find harder and harder to pay back in the coming months and years. As for the first home owners' grants, they'll most likely be pocketed by the real estate agents and developers.

"A cash back offer is the best possible deal because it's real money, you can see it, you know what it is, it's got a real value, as opposed to a boat, or tickets" says Wayne.

Put that real money towards your home loan, advises Ormond, who's stepping out of rank to remind us all - these incentives often add to the price of a home, but not it's value.

"In most cases, the bank value will deduct that off the valuation, so if the property you're purchasing is $400,000 and the incentives are $20,000 then they'll say that property is worth $380,000 and that's where we run into real problems because then we're going to have difficulty financing that," says Wayne.

That means higher interest rates, higher repayments and more defaults.

The advice from Wayne Ormond is to ask for cash, not cars or coupons and you'll quickly separate the real deals from the fakes.

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