One of New South Wales’ peak real estate bodies believe the state government should be doing more to address affordability issues faced by first home buyers.
The Real Estate Institute of New South Wales (REINSW) believes the Baird government should “put the interests of first homebuyers at the top of its agenda” and has called for stamp duty concessions for those buying their first home.
The REINSW is lobbying for the NSW government to provide first homebuyers with a 50 per cent reduction in the stamp duty on a purchase of a residential property less than $1 million and provide the ability to pay the stamp duty over time.
“Home ownership is not only something that individuals should aspire to, it is also something that government should foster and encourage as a means of building wealth and providing for a person’s care post-employment,” REINSW president John Cunningham said.
“Not supporting first homebuyers, is to say the least short sighted and creates the risk that our best and brightest will be enticed to other states where the dream of home ownership can be a reality,” Cunningham said.
But while Cunningham and the REINSW believe the government should be “providing a pathway” for first home buyers, others believe those starting out may need to temper their expectations.
“The younger generations tend to have this perception that they can get the greatest and the best when they buy their first property and they just need to scale their expectations,” Rich Harvey, chief executive officer of propertybuyer.com.au said.
“You can’t always buy the most brilliant, beautifully laid out house with the perfect floor plan for your first home because that will be unaffordable. It’s a question of compromise and getting your foot on the first rung of the property ladder and then moving up from there,” Harvey said.
While some areas and property types may very well be out of the reach of those looking for their first home, Harvey said coverage of record price growth in markets such as Sydney and Melbourne distort people’s view of prices elsewhere.
A lot of people want to buy where their parents live. If you’ve grown up in a blue chip suburb, somewhere like Mosman then you might not be able to afford the median price of $2.8m and you might have to set your sights further afield.
“The median house price in Sydney is $1m and it’s around $750,000 in Melbourne and that definitely creates a perception that property is expensive everywhere, but there’s lots of options.
“[For Sydney] you have Newcastle
as your satellite suburbs north and south. The outskirts of Melbourne have some cheaper options and Brisbane also presents some great options.”
While not in favour of subsidies for particular segments of buyers, Harvey believes there sre steps policy makers could take that would result in a more fluid property market.
“I’m not a big believer in subsidies. They tend to distort the market and I think it’s better if the market can work itself out.
“Overall I would like to see stamp duty lowered, not just for first home buyers, but for all people. It’s an impediment to property trading.
“If you had lower stamp duty then the older generation may consider downsizing and putting up older housing stock for sale and presenting more options for people to buy.”
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