Don't encourage FHBs into NSW, we don't have the supply for them: UDIA

When first home buyer numbers are weak, some policy setters look towards incentives to urge the buyers back into the market.

However, warns Urban Development Institute of Australia NSW chief executive, Stephen Albin, this would exacerbate the problem.

Albin warned that pushing up the incentives for first home buyers, which are currently focused at those looking to buy new or build themselves, would cause a flood of demand into the market and push up property prices even higher than at present.

Instead, he thinks that we need to address other issues before encouraging first timers to jump back in.

“The NSW property market, particularly in Sydney, is highly competitive due to low interest rates and a chronic lack of housing supply in the market,” said Albin.

“Now is not the time to be encouraging further housing demand by increasing incentives for first home buyers."

He said that the stock for first home buyers isn't available and that, before making decisions to increase incentives, the government should instead look to the proposed planning reforms.

“For more than 10 years, NSW has suffered a chronic undersupply of housing and now needs more than 40,000 homes per year to be delivered to fill that void and bring demand back to stable levels,” he said.

“The proposed Planning Reforms reduce unnecessary duplications in development processes and ultimately streamline the industry’s ability to get on with the job of delivering housing and infrastructure for our growing population.”

Property Observer readers, what do you think? Should we be providing more incentives for FHBs?