President of the Real Estate Institute of New South Wales Malcolm Gunning has slammed the lack of appropriate development across the state under the premiership of MP Mike Baird.
Speaking exclusively to Real Estate Business, Mr Gunning said the premier has repeatedly failed to represent the growing need to give first home buyers a leg up to the market and the value-add of more affordable older-style properties.
Mr Gunning said the concern he holds is that the current first home buyer grant and stamp duty payments are all aimed at purchasing new real estate such as apartments and greenfield estate developments, and as a result, this money could be used to update existing free-standing homes in desired areas that are currently being knocked down to make way for new buildings.
“The state government previously built workers cottages in high-density city areas but there are still workers now, just professional workers who want to use the same exterior and renovate inside,” Mr Gunning said.
“Today we have self-managed super funds and foreign investors all competing for the same stock. Just look at the inner city of Sydney. Within a 20-kilometre ring there are not many new houses built, mainly apartments, and it is obvious why the government is doing it - they got a billion-dollar win in the last Budget from property tax. But they should pull back and consider that first home buyers should be given the opportunity to purchase older-style property that needs repair, because it is a terrific stepping stone.
“If you think about the 1970 double red brick homes, it was just right for a new kitchen and bathroom and a terrific stepping stone to get into the market and value add, which is traditionally what happened and why renovated properties on shows like The Block sell for plenty of money. Now it is just about buying a brand new unit.”
Mr Gunning said the increase of the threshold of the $15,000 First Home Owner Grant on new properties to $750,000, from $650,000, in the 2014 NSW Budget was welcomed and as the entry level on new properties begins to grow, such incentives will become redundant.