The new Victorian stamp duty concession for first homebuyers is producing a surge of interest from first homebuyers already.
The concession, which sees first home buyers receive a 20% discount on stamp duties for properties up to the value of $600,000, begins today. However, applications from first home buyers have already jumped in recent weeks. The existing first home buyer incentives remain unchanged.
"Recent figures already show an increase of 18 per cent in the number of applications to 1,467 in the month of May. This is indicative of astute first home buyers taking advantage of the incentive before the rush," says WBP Property Group CEO, Greville Pabst.
While this is a positive sign for a slowing market, Pabst advises first home buyers to let history serve as a warning.
"The activity created as a result of previous first home buyer schemes has produced significant demand for property at the lower end of the market, applying upward pressure on property values that effectively undermines the scheme's initial purpose."
Pabst reiterated that buyers - whether homebuyers or investors - should base their purchase decisions on the inherent qualities of the property, such as location, property type and land size.
"Whenever the Government announces a new property scheme a surge in hype and activity follows. With the new stamp duty scheme available from tomorrow first home buyers should be wary of the dangers of plunging into the property market blind,” he added.
"Purchasing property based on periphery advantages such as grant incentives, rental guarantees, tax benefits and more can create unrealistic expectations and result in disappointing outcomes."
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