Starting the New Year in a new home has become a happy reality for many Australians, thanks to the Federal Government's First Home Buyer Boost.

Effective from October 2008, the First Home Owner Grant has now been doubled to $14,000 for first home owners who purchase an established home. For those who build a new home or buy a newly constructed home, there has been a tripling of the existing grant, taking it to a whopping $21,000.

The boost was announced as part of a package to stimulate housing activity, which is considered essential to the economy's overall performance. The Housing Industry Association predicts the move will result in an extra 15,000 houses to be built around Australia over the next 12 months.

The good news for first home owners doesn't stop there, as the grant runs on top of the government's first home saver initiative (a special-purpose savings account to which the government makes contributions), plus first home owner grants that are administered by each state. Stamp duty concessions are also available, many of which have undergone changes over the last year to encourage home buyers into the market.

As your mortgage broker we can make sense of all these rebates, so give us a call to make sure you are taking advantage of all your entitlements.

If a strong economy was on your Christmas wish list, let's hope the recent Federal Government's economic stimulus package does its work.

Designed to provide practical support for pensioners, families and first home buyers, the $10.4 billion package is also expected to boost growth in the domestic economy.

Money needs to be changing hands to keep the economy alive, which makes strong consumer spending an important defence for countering the global economic crisis.

The release of the Federal Government's stimulus package in mid-October prompted an immediate increase in consumer confidence. The Westpac and Melbourne Institute consumer sentiment survey for November showed a 4.3 per cent rise in the index to 85.5, up from 82 in October. The number of people planning to buy a home rose by 21 per cent, to its highest level since March 2006.

December also saw the first improvement in housing affordability since early 2007. The Real Estate Institute of Australia Housing Affordability Report released on 1 December showed the percentage of household income required to meet loan repayments decreased by 0.7 per cent over the third quarter to 38.8 per cent.

It seems the government's spending plan coupled with the Reserve Bank's big cuts in interest rates finally gave us news we could smile about!

Pensioners were among the key beneficiaries of the government handout, with a $4-billion down payment set aside for long term pension reform. During December single pensioners received a lump sum payment of $1,400, while pensioner couples received $2,100.

First home buyers also came out on top, with a $1.5 billion investment to help Australians gain their first keys to a new home (see article 1).

For the family, $3.9-billion worth of support has been made available, with around 3.9 million children receiving a $1,000 one-off benefit in the weeks leading up to Christmas. Recipients of Family Tax Benefit Part A, Youth Allowance, Abstudy or the Veteran Children's Education Scheme were also eligible.

The government also targeted spending on infrastructure, jobs and training. A total of $187 million will be spent to create an extra 56,000 training places this financial year. The productivity places program will be effectively doubled from 57,000 to 113,000, taking the government's investment in training places since April to more than $400 million.

A second economic stimulus package has been hinted at for the middle of the year, but is only expected if the global financial crisis worsens. While Reserve Bank governor Glenn Stevens acknowledges the situation is serious, he says the economy's long-term prospects belie some of the gloomy talk that is around.

A recent government injection of $8 billion into the mortgage market has strengthened the position of non-bank lenders.

For you and I this means improved competition and the promise of more choice in home loan rates and products.

The Treasurer has announced that the Australian Office of Financial Management will purchase Australian residential mortgage-backed securities (RMBS) as part of the government's commitment to ease credit shortages in the non-banking credit market.

This is a type of security whose cash flow comes from residential debt such as mortgages, home-equity loans and subprime mortgages. This key source of funds for the non-bank sector has been hit hard, with RMBS now being issued at a rate of around $830 million a month, compared with $6 billion a month before the crisis. This has weakened the capacity of mortgage lenders reliant on the primary RMBS market as a source of funding to compete.

The purchase of RMBS by the government will level the playing field and ensure that non-bank lenders now have access to funding for their operations.

For the government it means exchanging cash on their balance sheet for new prime AAA rated securities. In other words, the government will own mortgages and give a return to the taxpayer. The securities will be held by the AOFM until market conditions normalise and they can be sold.

Confidence in the non-bank sector has now returned, with a recent Mortgage Business poll showing that 50 per cent of brokers are now more open to using non-bank products compared to 12 months ago.

Non-bank lenders have an important place in the mortgage market because they have increased the choice available to borrowers. Before they came on the scene, the four big banks called the shots when it came to home loan rates and products.

Our role as your mortgage broker is to work with a large panel of lenders to find a loan that best suits your needs. As non-bank lenders recover their position to once more compete effectively with banks, we should in time see a flow-through in savings for home buyers.