Sydney first home buyers turning to off-the-plan: HTW

NSW Premier Gladys Berejiklian’s promise to tackle home ownership affordability is a welcome sign to first time buyers being pushed out of the market, according to HTW’s Month in Review: March 2017. 

The valuation firm says with just over 186,000 loans approved in NSW in 2016, the first home buyer formed a small market segment with almost 16,500 loans approved or less than 9 percent of the total mortgage pool.

First home owner grants have reduced as data from the Office of State Revenue shows that 9,391 grants worth $138 million were handed out in 2015/16 as opposed to the 32,574 grants worth $266 million paid in 2010/11, the report states.

“Sydney is widely considered the most expensive city within Australia and one of the most expensive to rent when compared with other states and territory capitals, making for a tough path to home ownership,” HTW says.

“Furthermore, it appears that NSW is the equal lowest for first home owner grants when compared to other states:

• QLD – $20,000 for new builds valued up to $750,000
• SA – $15,000 for new builds only, valued up to $750,000
• WA – $15,000 for new builds, valued up to either $750,000 or $1,000,000 (depending on the location).
• VIC – $10,000 for new builds only, valued up to $750,000
• NSW – $10,000 for new builds only, valued up to $750,000

“Typical first home buyers may consider purchasing off-the-plan as it allows them to save money while the property is under construction which can typically take between two to three years.

“This has been a strategy adopted by many in the Sydney market hoping to achieve capital appreciation during the course of construction and ‘lock in’ a lower purchase price compared to the ‘on completion’ or settlement price.”