First homebuyers package a step in the right direction: REINSW
GUEST OBSERVER
The package of measures to support first homebuyers released by the NSW Government is a step in the right direction.
The decision to support first homebuyers with the purchase of existing properties is something that we have been lobbying fiercely for for some time now.
It is great to see that the NSW Government has recognised the significant role that existing properties play in the issue of housing affordability and the restrictions first homebuyers faced with paying excessive amounts of stamp duty.
Premier Gladys Berejiklian announced the stamp duty exemption will be extended to first homebuyers of existing homes up to $650,000 from 1 July 2017 and reduced stamp duty rates to homes valued up to $800,000. The current stamp duty exemptions on new homes up to $550,000 and a reduced rate stamp duty rate to $650,000 will also be increased to match the new exemptions and concessions for existing homes.
We believe there is room to increase stamp duty concessions to further reflect the median house price in Sydney as well as Newcastle and Wollongong and believe that at the levels announced by the state government, regional areas, where property prices are not so high will benefit from an influx of first homebuyers.
However, not enough has been done to address bracket creep. As a result the rest of the market is left to pay excessively high stamp duties that have not been reviewed for more than 30 years and have gone on average from less than 2 percent of the purchase price to now more than 4 percent.
The effects of the announced foreign investment levies are a great unknown as they could have a positive or a negative effect.
If the new levy doesn’t dampen the enthusiasm of foreign investors there will be the same level of activity, they will pay a higher price and the government will reach it’s revenue targets, however little will be achieved to help with the issue of housing affordability because they will still be competing with first homebuyers.
On the flip side if they do respond and go elsewhere it could have a negative effect on the marketplace as it will impact on construction and employment. There is the possibly of a huge negative impact on the viability of major developments due to the banks insistence on extensive presales. This would put upward pressure on supply and rents.
We are waiting on the detail of the medium density changes as this was a big part of our lobbying. REINSW believes it is one of the quickest solutions to the supply/choice issues of getting people moving to more appropriate housing.
We are hoping that the state government is going to retain some powers on this as local councils are too slow to respond due to NIMBYism. REINSW is after a coordinated multi occupancy policy to enable two, three and four dwelling medium density subdivisions in residential zones similar to the old SEPP on dual occupancy.
REINSW recognises that the document released by the NSW Government is entitled “A Fair Go for First Homebuyers”.
We hope that the second phase of the Government’s housing affordability plan is “A Fair Go for Retirees” which includes stamp duty concessions for retirees to sell and move to a more appropriate home, by providing a discount on a single purchase for people aged 65 and over to get the stock of clogged family homes into the market.
The retirees are often sitting on nest eggs they could realise much earlier whereby they could subdivide and build a new more appropriate home along with a home or two to sell or retain for family or low-income accommodation.
This is great first step by Premier Berejiklian to address housing affordability as pledged in her first days of office. We look forward to seeing the Government build on this promise and will continue offer support and guidance throughout the process.
