As far as I can determine the latest NSW State Budget for 2010 – 2011 includes 4 incentives for some buyers to buy property, mainly new ones.
1) “Off the plan buyers” up to $600,000 will no longer pay stamp duty. This is going to help developers obtain finance because banks want pre sales before firming up financial arrangements for their clients.
2) Home buyers that buy during construction or at completion will receive a 25% reduction in stamp duty on purchases up to $600,000. This incentive will help some “spec builders”.
3) “Empty Nesters” (or last home buyers) over 65 are being encouraged to sell their main home and buy another home up to $600,000. Those who do this will pay no stamp duty on the purchase.
4) First Home buyers are getting $7000 plus they pay little or no stamp duty on home purchases up to $600,000 for another two years.
There seems to be one sector of the real estate market that is humming along quite nicely and that is the first home buyers market.
Some interesting statistics in the Financial Review on 25th February show just how the “First Home Owners Boost” is working:
30,000 people have made a first home purchase since mid October till the end of January
Of these 10,438 were in NSW
25% of the 30,000 grants were being used to buy new homes
The aim is that these purchasers will provide a flow on effect and keep many other industries in business such as real estate agents, builders and tradies. Let’s hope so as last nights news that Pacific Brands (producer of iconic brands King Gee, Bonds and Holeproof), was sending production overseas and lots of Aussies had lost their jobs as a result, was extremely disappointing.
Another result of the “First Home Buyers Boost” is that the pressure on the rental market has eased. Last year the rental market was so short on supply that landlords were able to increase rents significantly and occupancy rates were at an all time high. This was also a significant problem for the government in its bid to curb inflation.
Auction clearance rates for last week were locally very low with a 30% success rate in comparison with the Sun Herald’s Sydneywide clearance rate of 67%.