Repost; Adrian Ballantyne
It is high stakes for the thousands of first-home buyers in both states who are battling to get their hands on their first property.
So where would you rather be as a first-time purchaser trying to enter the market? Which state has the better of the bonuses and concessions designed to help new buyers compete in Australia’s superheated residential property space?
In terms of helping hands for New South Wales first-home buyers, there’s rarely been a better time to dive in.
As of July 1, New South Wales buyers are enjoying significant stamp duty savings, with the State Government removing all duties on properties worth up to $650,000, and a decreasing scale of concessions on homes worth up to $800,000.
Among other bonuses available, first-time owners who want to build their first home can claim a $10,000 First Home Buyer Grant, provided the combined cost of the land and the house doesn’t exceed $750,000.
Those buying a new home worth up to $600,000 are also eligible for the $10,000 hit.
But CoreLogic Head of Research Cameron Kusher, says grants have questionable value, as vendors and agents know buyers in that price bracket have been given more money to play with.
“I do get concerned with first home owner grants, that they just bid up the pricing of properties,” Kusher says.
“People know that people have this extra borrowing power now, so they just up their asking price of those lower-priced properties.”
In Queensland, the concessions and grants could trump New South Wales’, depending on what you’re buying and how much you’re spending.
The Queensland Government has extended the First Home Owners’ Grant for an extra six months from July 1, allowing buyers wanting to purchase a newly-built home – worth less than $750,000 – to claim $20,000 until December 31, when it will drop back to $15,000.
There are discounts available on purchases up to $550,000.
Kusher says cuts to first-home buyer stamp duty are of more benefit than grants.
“I think stamp duty concessions are better, and I think stamp duty is a bad tax anyway. We should remove it for everyone,” he says.
“But if you’re going to try to attract first-home buyers into the market, then I think a stamp duty concession is better than a grant.”
Despite the considerable incentives now in place in New South Wales, Kusher says Queensland wins out, simply because there are so many more houses that fall within the first-home buyer concession price range.
“The obvious answer is that Queensland is a better place for first-home buyers, ultimately because the cost of housing is significantly lower than it is in New South Wales,” he says.
While the concessions available to first-home buyers in both states are enticing, Kusher says, you need to travel a lot further out from the city in New South Wales before you’ll find a good range of properties that actually qualify for stamp duty savings.
“In New South Wales the ultimate challenge is that there’s not that many properties under $800,000, so your pool of potential properties to purchase is quite small,” he says.
“I think ultimately the pricing in Queensland is more conducive to first home buyers, and the fact that you get that grant should help as well.”