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Will first home buyers take advantage of the Kiama market?

Will first home buyers take advantage of the Kiama market?

Announcements made by NSW Premier, Gladys Berejiklian, are set to ease the pressure on first home buyers by abolishing stamp duty for properties up to the value of $650,000 and reducing the amount payable for properties to the value of $800,000.

 

A summary of the first home buyers package:

  • abolish stamp duty on all homes up to $650,000
  • give stamp duty relief for homes up to $800,000
  • provide a $10,000 grant for builders of new homes up to $750,000 and purchasers of new homes up to $600,000
  • abolish insurance duty on lenders’ mortgage insurance
  • ensure foreign investors pay higher duties and land taxes
  • no longer allow investors to defer paying stamp duty on off-the-plan purchases.

See more on the NSW Government’s package of measures designed to improve housing affordability across NSW.

 

With the median value of a house in Kiama of $802,837 and an apartment $588 006* this could well make a difference to first home buyers looking to enter the Kiama market, particularly those looking to buy a unit.

 

*Data from Corelogic

 

“Kiama has not traditionally been a first home buyers’ market, as prices are generally higher than nearby Illawarra suburbs where a house with a yard is more attainable for the first home buyer,” explained Susan Spence of Harcourts Kiama. “However, there’s still the challenge to save around $60,000 for a deposit on a $600,000 property and that takes a long time to accumulate, particularly as rents remain high and wages growth is low.”

 

“We remain optimistic that the government’s measures will help the market, particularly as they are also designed to dissuade overseas investors,” said Andy Wharton of Harcourts Kiama.

 

Tim Lawless of Corelogic was more cautious, saying, “It’s widely accepted that policies aimed at stimulating demand tend to push prices higher, [with] a possibility that the new policy could ultimately be self-defeating, increasing housing demand which could place further upwards pressure on the price of housing.”

 

The NSW first home buyers’ package will be introduced on 1st July 2017, so we will be watching the market closely to see its effect.