First home buyers are thin on the ground, at least in the NSW city of Wollongong, a local real estate principal has said.
Greg Chadwick, principal at Dougmal Harcourts Wollongong, told Real Estate Business that he hadn’t seen a first home buyer since last year.
He put this down to the NSW government’s decision to remove stamp duty exemptions for first home buyers purchasing existing dwellings.The change, which came into effect on January 1, means first home buyers are liable for stamp duty on all but new dwellings worth up to $600,000.
Mr Chadwick said in the months leading up to Christmas, it was common for up to four groups of first home buyers to be bidding for the one property, helping to drive up some house prices to levels that weren’t justified.
Mr Chadwick said it would have been preferable if the government had simply tweaked the exemption scheme, reverting to a system where buyers had a few years to pay off the duty.
“They need to do something,” he said, referring to the state government. He added that the first home owner grant (FHOG), which currently stands at $7,000, wasn’t enough to prompt first home owners to buy in markets where the price of a home was around $450,000.
“The stamp duty expense is more important,” he said.
Only recently, the Real Estate Institute of Australia (REIA) called on the federal government to increase the FHOG to $15,000 as part of the next budget.
“When the FHOG was introduced in July 2000, the Australian quarterly weighted average median house price was $220,443,” the REIA said in its submission to the government. “The Australian weighted average median house price in the most recent quarter for which data is available, September 2011, was $521,238.”
“The lack of financial assistance to first home buyers is an issue that requires considerable attention to ensure that property is affordable for young Australians and that they can one day aspire to own a home," REIA president Pamela Bennett said
Leanne Pilkington, Laing+Simmons general manager, had expected to see a similar result across her company’s 50 predominantly Sydney-metro based offices.
Instead, Laing+Simmons principals were reporting continuing interest from first home buyers, particularly in Sydney’s western suburbs.
This coincided with a report in Real Estate Business’ sister publication Smart Property Investment, which included Western Sydney as one of the key hotspots in its recent Fast 50 report.