The first home buyers’ incentives for existing properties should be reinstated, says the Real Estate Institute of New South Wales (REINSW).
The industry body has called for action by the state government as a result of a decrease in property sales for first home buyers since changes were made last year to grants available.
REINSW president, Christian Payne, says first home buyers are the ‘catalyst’ for other property activity in the market.
“First home buyers are an essential link in the chain of the entire market and by excluding them it causes a great disturbance.”
From September 30, 2012, the $7,000 first home buyers’ grant was abolished for those buying existing properties. A new grant of $15,000 for first home buyers who purchased a newly built dwelling or property off the plan, up to $650,000, was introduced on October 1, 2012, with the grant decreasing to $10,000 from January 1, 2014.
“The strategy of the government to direct first home buyers towards new property is flawed because it suggests demand is the issue, when in fact supply is the issue. The inhibitors of supply are the convoluted planning system and the government’s dependency on property taxation.”
Payne says first home buyers are a unique category of property consumers and that ‘the jump they have to make from a standing start to acquiring a property’ can be the huge.
“We need to recognise they need special assistance, as typically the first home buyer is a younger person - but not always. It would be a travesty if they found it so difficult to buy a property in NSW that they were enticed to another state; NSW can’t afford to lose investment dollars. This lack of affordability or incentive means that that we could be losing the best and brightest young people."
He says REINSW wants to see an increase in affordable property.
“Therefore, the current strategy of directing first home buyers to new property has not achieved what they wanted. In fact it has adversely affected the volume of property transactions…It is imperative that the first home buyers incentives for the purchase of existing property be reintroduced.”