It’s no surprise that the Sutherland Shire is one of the most desirable places in Sydney to live but it does come at a cost. With housing prices increasing, some first home buyers have been outpriced from entering the Shire market.
As debate raged over just how much first home buyers should be spending on smashed avocado on toast, the NSW State Government announced a number of measures aimed at improving both the supply of housing and access for first home buyers to the market. These measures are to be introduced from 1 July 2017.
We’ve highlighted the key housing affordability measures below:
- increase housing targets and improving infrastructure throughout Greater Sydney
- give assistance to purchasers looking to enter the market for the first time by providing stamp duty relief on all homes. Of note; waiving stamp duty for first home buyers against the purchase price up to $650,000, with graduated stamp duty relief for purchases prices of up to $800,000
- increasing the First Home Owners Grant (New Homes)
- abolishing Insurance Duty on Lender’s Mortgage Insurance
- increasing the stamp duty surcharge on foreign investors and removing the off-the-plan stamp duty deferral for investors
The First Home Owners Grant (New Homes) will:
- provide (on top of the above stamp duty relief) a grant of $10,000 when building a new home (up to $750,000) or buying a newly constructed home (up to $600,000)
Between June 2011 and June 2016, median house prices in the Sutherland Shire have risen from $727,343 to $1,105,951, while units have risen from $461,029 to $701,605.
Considering the case of a first home buyer with a $50,000 deposit purchasing a new home for a price of $600,000, the savings under the new measures will be a massive $34,361 (or 1561 serves of smashed avocado on toast), while a corresponding foreign investor will have to skip their next 15,665 strong lattes to cover the additional stamp duty charges of $70,490.
The measures pertaining to foreign investors came into effect on 21 June 2017, with the first home owners measures applying to all contracts dated from 1 July 2017.
So while the contentious topic of housing affordability seems to go around in circles, the above measures do aim to achieve a balanced playing field between first home buyers and established investors.
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