The recently announced changes to the first home owner concessions by the NSW Government are bad news for first time buyers, according to a leading mortgage broker.
The change from a grant for all first time owners to a doubling of those buying new builds and abolition of the concession for those buying existing property will penalize those that fall into the latter category, said Loan Market.
Corporate spokesman for the company, Paul Smith, said that the changes, which were introduced in a bid to help the building and construction industries, could hurt the property and finance markets.
"Ending the grant for existing home purchases will hurt the real estate and home finance sectors in NSW and delay most first home buyers from entering the market.”
"The government has already removed stamp duty exemption from January 1, 2012, and now the removal of the grant will just make it harder for first home buyers entering the market,” Mr Smith said.
"The reality is a large portion of first time buyers still prefer properties such as old semi-detached houses in inner city areas and it's hard to see a huge rush to new properties in the outer suburbs,” he said.
The changes will list the First Home Owner Grant from 1 October this year to $15,000 for those buying new property under $650,000, while also receiving a stamp duty exemption.
Those purchasing existing property will miss out on the current grant of $7,000.
"The danger of these budget measures is that it could create a slow-down in purchasing of old properties, and therefore a slow-down in the NSW market overall,” he said.
"These changes mean consumers will need to save for longer to buy an existing home with full stamp duty or incur more mortgage insurance.”