An Illawarra economist says stamp duty being temporarily scrapped for NSW first home buyers will be a positive for the region, as average prices fall within the policy's "sweet spot".
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The NSW government announced this week that it will temporarily axe stamp duty on new homes under $800,000 for first home buyers, in an attempt to boost construction and create jobs amid the COVID-19 crisis.
Treasurer Dominic Perrottet said the changes would save first home buyers stamp duty of up to $31,335 on a new $800,000 home.
Alex Frino, Professor of Economics at the University of Wollongong said the Illawarra would likely benefit, because the median house prices across the various LGAs spanned from about $700,000 to $800,000.
"So I think there's a lot of potential benefit for the region because the price of property is approximately in the sweet spot of the policy," he said.
"It can assist first home buyers, who are going to get a double-whammy as property prices stabilise and perhaps weaken, and being able to use this benefit to acquire new property."
However, Prof Frino said building approvals were down "dramatically" in the first half of 2020, meaning new properties coming on the market are going to be scarce over the next 18 months or so.
"So there might be a supply issue," he said.
"But the stamp duty changes could also stimulate a little more construction activity, so that's a positive."
The threshold above which stamp duty will be charged on new homes for first home buyers will increase from the current $650,000 to $800,000, with the concession reducing on higher values before phasing out at $1 million.
The stamp duty threshold on vacant land will rise from $350,000 to $400,000 and will phase out at $500,000.
The change to thresholds will only apply to newly-built homes and vacant land, not to existing homes, and last for a 12-month period, commencing on August 1.
Premier Gladys Berejiklian said the government expected more than 6000 first home buyers would benefit from the changes, saving eligible first home buyers thousands of dollars.
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Brendan Crabb
I'm a member of ACM's national property team, covering the Illawarra and South Coast. Based in Albion Park, NSW, I write about exciting, interesting or just downright quirky properties that have been listed for sale, major sales, market trends, auctions and more. One of my favourite aspects of being a journalist is I believe everyone has a story to tell. What's yours?
I'm a member of ACM's national property team, covering the Illawarra and South Coast. Based in Albion Park, NSW, I write about exciting, interesting or just downright quirky properties that have been listed for sale, major sales, market trends, auctions and more. One of my favourite aspects of being a journalist is I believe everyone has a story to tell. What's yours?
