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ISCOVER
Staff Reporter
While some NSW-based first home buyers will undoubtedly be encouraged to jump on the property ladder following the state Budget released earlier this week, one brokerage believes the increased concessions unnecessarily penalises other buyers.
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Loan Market corporate spokesman Paul Smith said while the changes announced in the State Budget seek to boost the construction industry, they could hurt the property and home finance markets.
The NSW government announced a raft of measures including increasing the First Home Owner Grant from October 1, 2012, to $15,000 for new property under $650,000.
First time buyers of new property will also continue to benefit from stamp duty exemptions.
But Mr Smith said first time purchasers of existing property would miss out on the $7,000 First Home Owners Grant, which will be phased out from October 1.
“Ending the grant for existing home purchases will hurt the real estate and home finance sectors in NSW and delay most first home buyers from entering the market,” he said.
“The government has already removed stamp duty exemption from January 1, 2012, and now the removal of the grant will just make it harder for first home buyers entering the market.
“The reality is a large portion of first time buyers still prefer properties such as old semi-detached houses in inner areas and it’s hard to see a huge rush to new properties in the outer suburbs.
“The danger of these budget measures is that it could create a slow-down in purchasing of old properties, and therefore a slow-down in the NSW market overall.”
