Buying First Home in Australia 'Simply Unachievable'
Aspiring home buyers in Australia will find that buying a home in NSW has become "simply unachievable" for some, real estate experts have advised.
In a move that will affect those who have yet to buy their dream home, the NSW Government has scrapped stamp duty concessions for 80 per cent of first-home buyers.
From Jan. 1, 2012, home buyers will have to shoulder the amount for transfer title charges on existing homes under $600,000.
Exemptions on stamp duty will now be restricted to newly built and "off the plan" properties only.
The housing industry has expressed opposition over the news on hike in stamp duties. Real Estate Institute of NSW president Wayne Stewart argued that the government was missing the point of the exemption.
"Australia weathered the last global financial crisis because the property market was invigorated. Yet those lessons have been ignored today," said Stewart, adding that a rush to beat the deadline would push up prices of existing homes.
"It is inevitable that, as first home buyers scramble to beat the January 1 deadline, we will see prices increase as demand exceeds supply," he said.
"Unfortunately for some, the dream of home ownership will now become simply unachievable."
The vast majority of first home buys in NSW - 42,000 out of 50,000 - are made on existing homes.
Martin Real Estate managing director Jeremy Martin also warned that there will be repercussions once the deadline is over.
"Between now and January rivers of gold will flow but after the party there will be a hangover," he said.
NSW is now one of the few states not to have a stamp duty concession for first home buyers purchasing existing homes.
However, construction and property groups showed appreciation for the news and said the concession simply pushed up house prices.
"This reform will make housing more affordable for first-home buyers by boosting the new housing supply," said Aaron Gadiel from the Urban Taskforce, a large developers' lobby.
"Newly built housing will now be more competitive relative to existing housing. It should have been that way all along."
He said the threshold for receiving the benefit, which tails off between $500,000 and $600,000, should be increased. "A first-home buyer with children looking to buy a three-bedroom apartment in Sydney will struggle to find one less than $600,000," he said.
The Property Council of Australia lauded the move to tie stamp duty concessions to new housing supply as "a smart choice".
"Housing supply remains limp across NSW and gearing incentives to motivate the construction of new stock makes sense," executive director Glenn Byres said.