First home buyers in Sydney and Melbourne have been having a tough time of late, but will the latest changes in stamp duty fees help with affordability?
A recent CoreLogic Perceptions of Housing Affordability report found that stamp duty was the biggest hurdle for many buyers, with 74 per cent of survey respondents stating that stamp duty reductions would improve their situation.
The latest housing changes in both NSW and Victoria should then come as a step in the right direction, helping take a large expense off the table for a lot of home buyers.
However there are a couple of concerns with the latest changes, namely that any savings may be negated by increased competition leading to higher property prices.
Historically, when new housing measures are brought in it tends to inflate different parts of the market. The latest stamp duty changes are likely to entice more first home buyers into the market and hence create more demand for properties in the first home buyer price range.
This means that while first home buyers will benefit from stamp duty savings they may not be much better off if they are finding themselves paying more to get into the market.
For this reason, buyers should consider getting into the property market before the changes come into effect if they can do so, particularly those who don’t stand to benefit from the stamp duty exemptions in the first place.
The market may slow down as some buyers wait for the new change to come into effect but is expected to pick up steam again once they do.
Vendors may be the ones to see the most benefits from the changes, with increased competition expected for homes targeted towards first home buyers from July 1.