While homebuilders have praised the NSW government's concessions to first homebuyers, a leading mortgage broker has claimed the proposals could actually hold buyers back and create a slowdown in the state’s property market.
The NSW budget includes a number of new proposals to spur activity in residential property. They include a doubling of the first homebuyers grant to $15,000 on properties up to $650,000, exemption from stamp duty for new houses and apartments up to $650,000 and a $5,000 grant for non-first homebuyers purchasing a new home under $650,000 or vacant land under $450,000. Click here for more information.
But a Loan Market spokesperson has said the measures could preclude some buyers from entering the market. The spokesman said the measures penalised first time buyers who prefer to purchase existing property.
"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," he said.
The company's spokesman said the changes would mean consumers would have to save longer to buy an existing home with full stamp duty, or risk incurring larger mortgage insurance fees.
"The reality is a large portion of first time buyers still prefer properties such as old semi-detached houses in inner areas and it’s hard to see a huge rush to new properties in the outer suburbs. The danger of these budget measures is that it could create a slow-down in purchasing of old properties, and therefore a slowdown in the NSW market overall," he said.
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