NSW Urged to Address Affordability Issues for First-Home Buyers

The Real Estate Institute of New South Wales (REINSW), one of the state’s peak real estate bodies, believes that the state government should prioritise the issues and problems facing first-home buyers. It also appealed for stamp duty concessions for people purchasing their first home.

Specifically, the REINSW is asking the government to introduce a 50% reduction in the stamp duty for first-home buyers purchasing a home valued at less than $1 million and allow payment of the stamp duty over time.

According to REINSW president John Cunningham, the government not supporting first homebuyers could produce risks that the state’s best and brightest will be tempted to relocate to other states where they can realise their dream of home ownership.

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However, there are others who believe that people who are just starting out should moderate their expectations.

Rich Harvey, chief executive officer of propertybuyer.com said that the younger generations tend to believe that they can secure the best when they purchase their first home and all they have to do is to scale their expectations.

Price Perceptions

Some suburbs and property types may be beyond the reach of those looking for their first buy. But Harvey says that coverage of record price gains in markets like Melbourne and Sydney distort the public’s perception of prices in other locations.

Many people want to purchase in the area where their parents are. If you grew up in a blue chip neighbourhood like Mosman, a median price of $2 million may be out of your reach and you may have to find at other locations.

In Sydney, the median price is $1 million and in Melbourne, it is roughly $750,000. These numbers are certainly creating a belief that property is pricey all around. However, buyers have other options.

For Sydney, consider Newcastle and Wollongong as your satellite suburbs north and south. There are also less expensive alternatives in the outskirts of Melbourne as well as Brisbane.

The median prices in Newcastle as of July 2016 are $900,000 for buying and $425 per week for renting a house; and $572,500 for buying and $420 per week for renting a unit.

Harvey is not in favour of subsidies for certain segments of buyers, but he believes there are steps lawmakers can take that would create a more fluid real estate market.

He prefers stamp duty to be lowered, not just for first-home buyers, but to all buyers. It is an obstacle to property trading.

A lower stamp duty could entice the older generation to downsize and put up older housing stocks for sale, creating more alternatives for people who are looking to purchase.