The property market across NSW waited with bated breath as the weekend’s residential auctions unfolded to see if recently introduced stamp duty concessions had any effect.
The new law came into play on Saturday, 1st July, drastically increasing stamp duty savings for first home buyers. The NSW government’s stamp duty changes aim to create a more balanced property market for everyone.
ANZ’s economic spokesperson explained changes, stating, “First home buyers in New South Wales will save up to $25,000 due to stamp duty discounts.” Properties that sell for under $600,000 will be afforded the most attractive benefits – this value is calculated to be in line with what first-time home owners can likely afford.
Stats released thus far by CoreLogic don’t suggest that hundreds of new first-time buyers emerged from the woodwork to steal auction wins, nor do they suggest that investors have been scared out of the competition. In fact, the rate of national auction success stayed steady and relatively low over the weekend, hovering around 70%.
Less than a week on from the new legislation, it is early days to be drawing any hard conclusions. There are many factors that can affect the numbers such as seasonality, school holidays and the number of properties going up for auction in the first place.
However, the common consensus among local economists is that the stamp duty cuts will ultimately fail to offer first-time home buyers any long-term advantage and will simply encourage higher bids at auction.
The fact that the government is taking measures to increase housing affordability for young people struggling to escape the rent trap is definitely promising – whether it will succeed in disrupting the residential landscape is yet to be discovered.
Certainly for those looking to buy an off the plan apartment as their first home, the new stamp duty concession has compounded benefits. Not only will buyers receive generous duty reductions, they will also be securing luxury property at today’s market price for tomorrow’s market value.