New properties continue to be at the core of government incentives in NSW, but some believe it’s counterproductive and to the detriment of the current property market.
The NSW government is focused on new homes in its grants and allowances for both builders and purchasers , and according to the CEO of the Real Estate Institute of NSW Tim McKibbin, this focus is “really misguided” given the current market.
“The government seems to think if we increase demand, that in somehow doing that, we’re going to solve a supply problem; [it’s] ludicrous,” he said.
“The supply problem is relating to tax again. In a new property, it gets taxed by the local government, it gets taxed by the state government, gets taxed by the federal government with ... new property. That’s the first thing.
“In excess of the price a home buyer pays in excess of 40 per cent is taxes and charges on a new property,” he said.
The other aspect about first-home buyers in the current market is that, in his opinion, most first-home buyers purchase existing properties and not new ones.
“It’s a misguided philosophy and belief by incentivising new home buyers into the space,” Mr McKibbin said.
He said in NSW and particularly Sydney, the issue lies with the state’s stamp duty exemptions which work for property purchases up to $800,000.
“Most new properties, in Sydney at least, exceed where the grant for stamp duty relief would apply.
“Anyone that’s buying a median unit or a median house price at least in Sydney, there’s not going to be a lot of benefit for them, even if they do buy new, most people [can’t] afford to buy new as a first-home buyer, so they buy existing properties.
“If they buy existing properties, there is no benefit, so it really is a disingenuous move.”