Finance advice

Stamp duty changes to hurt investors

By webmaster

Aspiring first time buyers as well as investors have been dealt a blow following the NSW government’s decision to remove stamp duty exemptions for first home buyers.

As of January 1, 2012, first home buyers in NSW will no longer be able to claim stamp duty exemptions on homes valued up to $600,000. Instead, only first home buyers purchasing new homes will be eligible for the concession.

Angus Raine, CEO of Raine & Horne, slammed the decision.

“We already have a major shortage of rental properties in NSW and this is not going to help young people jump off the rental market treadmill and into their own homes,” he said.

“I’d really urge the NSW government to reconsider this budget measure as it will mean first timers will need to find tens of thousands of additional dollars to buy into the housing dream.

“It will also price many first timers out of apartment markets closer to the city and will put even more pressure on overworked infrastructure in outer Sydney suburbs.”

Laing+Simmons general manager Leanne Pilkington said the new policy would hurt first time buyers.

“While this may encourage some first home buyers waiting on the sidelines to enter the market this spring, this measure in reality presents another barrier to many first home buyers looking to get their foot in the door.

“It also represents an opportunity missed. The critical need to improve housing supply remains, particularly in Sydney, however this would better be achieved through a focus on removing the planning red tape and reducing the associated costs of development,” she said.

While the changes are obviously bad news for aspiring buyers, they could also hurt investors, as first home buyers rush to beat the deadline and push up demand for property, competition, and ultimately, prices.

“It is inevitable that as first home buyers scramble to beat the 1 January deadline, we will see prices increase as demand exceeds supply,” said Real Estate Institute of NSW president Wayne Stewart.

APM economist Andrew Wilson echoed similar concerns.

“We have this sort of sunset clause, that it’s [stamp duty concessions] going to be taken away as of 1 January. This means we’ll probably get a bringing forward of demand which just might cause some short term heat in the market place as first home buyers look to take advantage of the window of opportunity over the next 4 months.”

“It’s possible we may see now see some house price movements in the Sydney market in the lead up to Christmas,” he told Smart Property Investment.

Meanwhile, Urban Taskforce chief executive Aaron Gadiel said the $1 billion revenue measure was a sensible step that would help boost NSW’s supply of new housing.

“This reform will remove the current scheme’s inflationary impact on home prices, and will make more housing available to more people,” Mr Gadiel said.

Mr Gadiel said that existing first home buyers’ stamp duty concessions have been poorly targeted for too long.

“NSW’s housing supply has been heavily constrained by the planning system and high development levies,” he said.

“In our supply constrained home market, the existing first home buyer stamp duty concessions inflate home prices across the board.

“But this hasn’t addressed the high cost of supplying newly built homes to the market.

“By tying stamp duty concessions exclusively to new housing, the inflationary impact on existing housing will be removed, and brand new homes will be more attractive to home buyers.”

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  ["title"]=>
  string(72) "Mortgages in a tighter lending economy and why Brisbane is a good option"
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Tune in to the latest episode of Property Showcase, the podcast with the inside track on the products and businesses that will help turbocharge your portfolio, maximise returns and make your overall investment experience seamless and stress-free!

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To hear more about these services, make sure to tune in to this episode of Property Showcase!

 Make sure you never miss an episode by subscribing to us now on iTunes!

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Son Pham is the accredited Head of Mortgages at Rethink Financing\/Rethink Investing. He has over 6 years\u2019 experience writing loans, over 12 years in the wealth management industry working for the likes of CBA, AMP and private practice and he is also a licenced financial planner (AFSL 326450). He has multiple investment properties that are cash flow positive which help pay his mortgage on his home and fund his lifestyle.<\/p>\r\n

Son is able to write all types of residential and commercial property loans.<\/p>\r\n

In this episode of Property Showcase, head of mortgages at Rethink investing Son Pham joins host Tim Neary to unpack how an investor should approach getting a mortgage in place with banks tightening down on serviceability.<\/p>\r\n

Hear from\u00a0Son\u00a0about:\u00a0<\/p>\r\n

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  • The pitfalls that he has seen people get into<\/li>\r\n
  • Interest only loans and if that is the way to go<\/li>\r\n
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    In this episode of Property Showcase, director of investment services for Open Corp Michael Beresford,\u00a0joins\u00a0editor of Real Estate, Tim Neary to share why he disagrees that the cooling market means that the best times are behind us.<\/p>\r\n

    In this episode, hear from\u00a0Michael\u00a0about:\u00a0<\/p>\r\n

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Mortgages in a tighter lending economy and why Brisbane is a good option
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Will Magee has had ambitions to enter into the Australian property market for quite some time, but it has been more than just finances holding him back.  Having been granted permanent residency just two weeks ago, Will is wasting no time and is now in the process of signing papers and finding his first investment property.

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In this episode of the Smart Property Investment Show, Will joins host Phil Tarrant to share why he is purchasing his first property in partnership with his brother, discuss the complications that can arise from such a strategy, and unpack the ongoing plan for building a joint property portfolio with his brother.

Will will also share how they approached saving for their first property, why he is taking out the mortgage in his name exclusively, and share their savings plan for the year ahead.

If you like this episode, show your support by rating us or leaving a review on iTunes (The Smart Property Investment Show) and by following Smart Property Investment on social media: FacebookTwitter and LinkedIn.

If you have any questions about what you heard today, any topics of interest you have in mind, or if you’d like to lend your voice to the show, email [email protected] for more insights!

RELATED AREAS OF INTEREST:

From property in Australia to a ski lodge in Japan
Mortgage Trusts, an alternative first step for property investors
Should a real estate title be in one person’s name only?

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A property investment plan years in the making
object(stdClass)#1213 (52) {
  ["id"]=>
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  ["title"]=>
  string(75) "Regional Victoria showing up Melbourne in price performance, new data finds"
  ["alias"]=>
  string(74) "regional-victoria-showing-up-melbourne-in-price-performance-new-data-finds"
  ["introtext"]=>
  string(139) "

Median house prices in regional Victoria outperformed that of Melbourne in the June quarter, the latest REIV figures reveal. 

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Median house prices in the regions rose 4.0 per cent to $419,500 but in Melbourne they dipped by 0.6 of a percentage point to $840,000.

The result in Melbourne was due to a 0.8 of a percentage point fall in prices achieved at auction; this was despite a lift of 2.3 per cent in private sales.

Inner Melbourne suffered due to auction prices, where median prices fell by 4.9 per cent to $1,459,000 but it was middle Melbourne that was hardest hit, with a 5.4 per cent drop to $974,500.

Outer Melbourne had a good quarter with the median rising by 0.5 of a percentage point to $681,000.

Apartment prices in regional Victoria grew by 3.7 per cent to $304,500 while the metro media was up by 0.5 of a percentage point to $604,000.

REIV President Richard Simpson said that despite fewer sales, many sectors of the market were performing well.

“2017 was a bumper year and while the trendline has flattened, despite the fall in median house prices in the June quarter, median prices are still up this calendar year for both houses and units, in Melbourne and in the regions,” Mr Simpson said. 

In particular there was been strong growth in regional centres which is probably due to the first-home buyers’ concessions said Mr Simpsons.

“The first-home buyers’ concession has been a boon for regional areas. A new entrant to the property market buying a house at the regional median will pay no stamp duty, while a first home buyer of an apartment in Melbourne at the median price would pay stamp duty of nearly $25,000,” he said.

Mr Simpson said that more prospective buyers are looking towards regional Victoria which is also having an effect in Melbourne.

“Melbourne’s outer perimeter continues to grow. Small increases in the June quarter mean that the median prices for both houses and units have risen over 10.5 per cent from a year ago.

Mr Simpson said moving forward that vendors need more realistic expectations as the highs of 2017 are now over.

“Negative chatter about the future of the sector coupled with stronger lending controls by financial institutions has created some uncertainty and vendors need to be realistic with their price expectations,” Mr Simpson said.

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Regional Victoria showing up Melbourne in price performance, new data finds

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