The State Government’s new measures to help first homebuyers into the real estate market have been welcomed by the industry, but must be just the first step in tackling an issue identified as a priority issue.
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Premier Gladys Berejiklian made tackling housing one of her prime goals when she took over the state’s top job.
She announced on Thursday that stamp duty would be waived for all first home buyers on properties up to $650,000, a saving of up to $24,740 for young buyers trying to get into the Sydney market or around $11,000 for first-timers taking the plunge on a median-priced Dubbo home.
That’s really good news for young Dubbo buyers as it should mean they are in a position to buy much sooner than would have previously been the case. Saving for a first house is one of the most difficult challenges young people face.
Currently buyers face the prospect of saving a $38,000 deposit on a median priced home, plus an extra $11,000 to pay the stamp duty. So the stamp duty exemption effectively cuts by a quarter the length of time they need to save.
But the other benefit for first-time buyers is that the stamp duty exemption will give them a real cash advantage when competing for a home with cashed-up investors.
The Dubbo real estate market has been popular with investors, who could see the value of buying in one of the state’s most stable markets. Housing prices have risen steadily over the past five years and are unlikely to go backwards any time soon.
The increased demand is great news for sellers but has been disastrous for young buyers who are trying to get their foot in the door.
That extra $11,000 that an investor has to factor into their sums should even the playing field a little as they go up against young local buyers.
But putting a few extra dollars in first homebuyers’ pockets is only a start when it comes to the broader issue of affordability.
The more difficult task for the government is finding a way to greater increase the supply of housing, particularly in Sydney where demand continues to rise as Sydney’s population keeps growing.
When supply is too tight in Sydney and prices hit unaffordable levels, regional centres also start to feel the pinch.
It was Ms Berejiklian who made tackling housing affordability one of her top priorities. She still has a lot of work ahead of her.
