First home owner grants making a difference in NSW Mid North Coast: HTW
Increasing values, strong rentals and limited stock in NSW’s Mid North Coast is causing problems for first time buyers as they compete with the generally more affluent investor market, according to HTW’s Month in Review: March 2017.
The valuation firm says the new rapidly developing outlying subdivisions to the west of Port Macquarie (Inneslake, Brierley Hill and Thrumster areas) and to the south (Bonny Hills and Lake Cathie) have seen high demand for residential blocks over the past year.
“Purchasers appear to be a combination of investors and new home buyers, predominantly in the $450,000 to $600,000 segment,” the report states.
“First home buyers are targeting the lower end of this segment and accessing the first home owner grants (for new homes).
“While this can be more expensive than some of the established areas closer to town, access to the first home owner grant is proving the difference.”
The firm notes that a shortage of available land is becoming a problem, with often only house and land packages available for purchase.
“First home buyers often have to opt for higher value land and building packages, which may cause some mortgage stress in the future if interest rates rise.
“In the larger towns, first home buyers have often opted for residential units and villas in the lower value range ($300,000 to $400,000) with not only the price but the low maintenance proving attractive.
“However these are also very popular with mum and dad investors who are finding that these investments are often neutrally geared and relatively low risk.
“This has seen significant increases in values for these lower end products.”
HTW cautions that the only product it advises first home owners in the region to avoid would be serviced apartments.
“As the option of rent-vesting is gaining popularity, we would advise first home owners to stay away from properties that can’t be lived in permanently,” the report says.
“While the appeal of low purchase prices may be tempting, the high ongoing running cost, low returns and limited prospects for capital growth see this segment as a no go for first home owners looking to get onto the property ladder.”
A two bedroom house at 6 Southern Ocean Street, Lake Cathie (above) has been listed for $479,000.
Similarly a three bedroom house at 8 Rodley Street, Bonny Hills (below) has been listed for $655,000.
