Data from Loan Market Group has confirmed first time buyers in New South Wales are acting quickly to gain pre-approvals in an effort to secure finance before the stamp duty concession runs out at the end of the year.
Loan Market chief operating officer Dean Rushton said in the past three weeks, 60 per cent of the company’s brokers in NSW were reporting a spike in first time buyer enquires, while 76 per cent of brokers outside of Loan Market are reporting similar results.
“The increase in activity around pre-approvals is a clear indication that parts of the NSW property market are due for increased competition,” he said.
“What we’re starting to see in the NSW market right now is a similar scenario to the end of 2009 when the government withdrew the increased First Home Owners Grant. Market demand has been pulled forward and buyers are accelerating their purchasing plans.
As of January 1, 2012, first home buyers in NSW will no longer be able to claim stamp duty exemptions on existing homes valued up to $600,000. Instead, only first home buyers purchasing new homes will be eligible for the concession.
RFi director Alan Shields told Smart Property Investment, that the sudden surge in first home buyer activity will be short lived, as many buyers will be forced out of the market due to the additional expenses.
“If you had asked me a couple of weeks ago I would’ve said first home buyers are going to be well out of the market for the foreseeable future,” Mr Shields said.
“However, the changes to stamp duty exemption on existing property are going to create a rush of first home buyers coming into the market over the short-term, and then it is going to be like famine and feast. I think we are going to see just a total lack of first home buyers after that.”