The Real Estate Institute of NSW (REINSW) has rejected claims by the state government that 2013 was a “bumper year for first homebuyers”.
NSW Treasurer Mike Baird made the comment after figures released by the Australian Bureau of Statistics revealed that more than 6,000 families had taken up the NSW Government’s First Home Owner Grants in 2013, an 80% increase on the previous year.
“Our incentives are much more generous than those provided by NSW Labor (with up to $35,240 in assistance available to first homebuyers across the state), and we are unashamedly targeting first homebuyer incentives towards new homes,” said Baird.
REINSW chief executive Tim McKibbin said such comments did not accurately reflect the market. “For Mr Baird to say that it has been a wonderful year for first homebuyers is to ignore the data,” said McKibbin.
“First homebuyers have exited the market in droves and we only have to look at the ABS’s current home lending figures for evidence of this.”
First homebuyers can now only gain assistance from the Government when purchasing a new property and McKibbin called on the Government to reinstate incentives for first homebuyers to buy existing properties.
“The NSW Government’s policy assumes that we have a demand problem,” McKibbin said. “That is simply not the case. The problem we have is one of supply; there are just not enough properties coming to market.
“Trying to solve a supply problem by directing demand to new properties demonstrates a misunderstanding of the problem.
“If the Government is serious about addressing the issue, then they need to take on tax and take on planning.”
McKibbin said that taxation at all levels of government added considerable cost to property that is ultimately passed to buyers and can price first homebuyers out of the market.
“It’s a case of tax on tax on tax, which is discriminatory because other asset classes are not subject to the same level of taxation,” he said.
He also pointed to the “convoluted and expensive planning system” in NSW as being a barrier to new, affordable properties coming onto the market.
“There was some movement last year by Minister for Planning Brad Hazzard to address these issues, but to date there have been no changes,” he said.
McKibbin called on the Government to show first homebuyers more respect and understand the important role they play in the market.
“First homebuyers are an integral part of the property chain. If you have first homebuyers in the market, they create churn, it’s a more vibrant market and that will flow on down the line – benefiting not just first homebuyers, but also the market generally and increasing Government revenue.”
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