Stamp duty concessions for first home buyers will be scrapped commency January 1st 2012.

 

REINSW warns the NSW Budget change to stamp duty concessions will not improve affordability.The NSW Budget announcement to cut stamp duty concessions for first homebuyers was met with mixed reaction in the community, but REINSW warned the changes would not improve housing affordability. 

In unveiling the Budget last month, the State Government said the cut was aimed at targeting assistance where it was most needed, and encouraging development by making buying a new home more attractive to first homebuyers.

But REINSW said by removing stamp duty concessions for existing homes the government had ended the dream of home ownership for many.

The cut will come into force on 1 January 2012,

“This is really disappointing news for families, essential workers and all those trying to buy their first home,” he said. Mr Stewart said the decision could have far-reaching, adverse influence on the state’s economy.

“Australia weathered the last global financial crisis because the property market was invigorated yet those lessons have been ignored,” he said.

“REINSW believes that the Budget initiatives will unfortunately worsen the housing affordability and housing availability crisis gripping the state and hurting first homebuyers.

“The flow-on effects for NSW are serious, both in metropolitan as well as regional and rural centres,” he said.

“The Government’s announcement of hundreds of additional nurses, teachers, police and other frontline workers is laudable, but as we have argued for years now, where will they be able to afford to live that is close to where they work?

“The simple reality is that as housing affordability is squeezed, more people are forced to look at alternatives such as renting which only worsens the accommodation crisis.”

The announcement that an additional 10,000 land sites would be released was welcomed by Mr Stewart, but said he believed it will have little positive impact because most of those sites would be beyond the reach of first homebuyers.

“REINSW is not seeing anything in the Budget that goes to the heart of the housing affordability and availability crisis,” Mr Stewart added.

“It is unfortunate that the decision to cut first home buyers stamp duty concessions on existing properties will only serve to increase house prices and further erode housing affordability.

“It is inevitable that as first home buyers scramble to beat the 1 January deadline, we will see prices increase as demand exceeds supply.”

The decision is also going to be a serious blow for struggling rural and regional communities.

“The simple fact is many first homebuyers have no alternative but to buy constructed properties, so they will be particularly disadvantaged by the government’s decision,” Mr Stewart said.

Ironically, after 1 January, rural first homebuyers will have stamp duty concessions cut. However, those looking for a tree change from the city will be getting $7000 in upfront assistance from the government.