Why the NSW government ‘failed’ homebuyers

At first glance things look rosy for first home buyers under the New South Wales state budget – but one group said the changes are only a “half way” concession.

NSW first home buyers purchasing a new home worth up to $750,000 will be entitled to a $15,000 grant, it was declared in last night’s state budget announcement.

The threshold is currently $650,000. However, the NSW government’s decision not to reintroduce the First Home Owners Grant for existing properties has failed first homebuyers, according to the Real Estate Institute of New South Wales.

“We believe Treasurer Andrew Constance and Premier Mike Baird are only going half way to support first homebuyers, and the NSW government should have broadened the grants to include existing properties,” REINSW president Malcolm Gunning said.

“The treasurer and premier are out of touch with the wills and desires of first homebuyers. Providing incentives to first homebuyers of existing properties provides a more affordable entry point where they can add value.”

The NSW government is not taking advantage of the large number of properties on prime real estate in urgent need of the “care and enthusiasm” first homebuyers can provide, Gunning said.

“Incentives for older Australians to relocate to regional areas would have helped to free up properties in demand locations and we will continue to lobby the government on this important area.”   Gunning believed the NSW government should have followed the lead of the ACT, which has implemented such incentives.

While first home buyers may not have got all the help they need, foreign home buyers are the real losers under the new budget – the New Home Grant, worth $5000, will be restricted to Australian citizens and permanent residents from 1 July.

The grant will also be restricted to one grant per person, per year.

REINSW “applaud” the move to restrict the grants to Australian citizens and closing the loophole which allowed multiple applications for grants, Gunning said.   NSW Treasurer Andrew Constance said three years of belt-tightening and fiscal discipline have put the state in a strong position.

He announced a budget deficit of $283 million for the 2014-15 financial year, and a $660 million surplus for 2015-16.

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