A local real estate agent welcomed the NSW Government’s abolition of stamp duty for first home buyers, which comes into effect on July 1.
The move is geared to improve housing affordability. Stamp duty will be abolished from all homes which are for sale up to $650,000 for first home buyers.
Under the changes the government will also provide a $10,000 grant for purchasers of new homes up to $600,000.
Stewart O’Brien from First National North Haven said the abolition of stamp duty will mean a significant saving of around $17,000 on a typical three-bedroom home in Laurieton which is priced between $460,000 to $500,000.
“The cutting of stamp duty is a great start. What people have to do is take advantage of that now because it won’t be there forever,” Mr O’Brien said.
“At the moment, what we’re finding is because there aren’t enough houses on the market the people with cash in the bank and the bigger deposits were outbidding first home buyers.
“This will create a more level playing field for first home buyers and mean they can get their foot in the door of the property market sooner than they think.
“While the stamp duty cut applies to homes up to $650,000, you’d get a great home here for $650,000 but being able to get your foot in the door for a $460-$500,000 property is a good move locally.”
The housing market is on a high at the moment due to various factors including increased demand and a severe lack of supply.
Mr O’Brien said in the last two years average house prices in the Camden Haven have increased by a staggering 20 per cent.
“A three bedroom house in Lakewood three years ago would have sold for around $350,000-$360,000. You don’t find anything under $400,000 pretty much these days.”
The price of land has also risen making building a new home an expensive exercise for aspiring first home owners.
“There are significant developments happening between Bonny Hills and Lake Cathie, Dunbogan, Kew,” Mr O’Brien said.
“The price of land (at the moment the average is $200,000+) and building (on average $500,000) it’s almost impossible for first home buyers to get into the market that way, whereas you can buy a house at Lakewood for around $400,000 and save $13,000 on stamp duty.”
A further incentive, Mr O’Brien said, would be for the government to target people in the opposite position to first home buyers.
“If the government was really serious about housing affordability they should also cut stamp duty for people wanting to downsize,” he said.
“Villas is Laurieton at the moment are around $430,000 for a two bedroom. An average price of a new two-bedroom villa within proximity of the CBD of Laurieton is probably going to be around $460,000.
“If the government was serious about opening up more housing they need to reduce the cost for people to downsize.
“The average cost for people to downsize from their family home into, say, a villa, with stamp duty and all those sorts of costs, is around $30,000 to $40,000. The prices of villas has increased faster than the price of houses, so retired people are dipping into their pocket to downsize.
“In a lot of cases they’re not making as much money from the sale of their family home to move into a villa.
“Say you sell your family home in North Haven for $500,000 and you buy a villa in Laurieton for $460,000, by the time you pay your stamp duty and agents fees and all those sorts of things, you may only end up with $3,000 or $4,000 in the bank; which sounds crazy.
“The state government is making a lot of money from stamp duty. In 2015-2016 they were $1 billion under their estimate on their revenue from stamp duty.”
As for the future of the local market, Mr O’Brien said he believes prices will rise a little more before reaching a plateau again.
“House prices have gone up around 20 per cent in our core market of brick-and-tile-three-bedroom homes and are selling, on average, within 30 days. A few years ago it was around 120 days on the market.
“The number of people going through open homes is certainly greater. For us, only about 30 per cent of our buyers are out of Sydney. It’s a misconception here that Sydney buyers are driving the prices up here.
“There are a good number of locals buying within the area for investment, or living in or down sizing.”