Stephen Nicholls June 13, 2012
Buyers be quick... Daniel and Violeta Krajovski with daughters Emily and Olivia outside a project home at Middleton Grange. They are hoping to beat the cut-off. Photo: Dean Sewell
THE state government's property changes, which skewed support towards new homes, were predictably applauded by developers and mostly criticised by real estate agents.
The Budget changes mean NSW will have the most generous first home buyer scheme in the country - provided you buy a new house or apartment.
From October 1, the First Home Owner Grant will more than double to $15,000 for purchasers of new property under $650,000.
First-time buyers of new property will also continue to benefit from stamp duty exemptions.
The grant and stamp duty concessions mean a saving of more than $35,000 if buying a $550,000 home.
But first-timers purchasing existing property lose out, with the $7000 grant - introduced in 2000 - set to disappear.
Others disadvantaged by the budget are purchasers of off-the-plan projects who aren't first-home buyers.
Investors and upgraders buying $600,000 properties off-the-plan have been enjoying stamp-duty free status, but that will end on June 30.
The Budget announced that this would be replaced by a $5000 grant, but the stamp duty savings on a $600,000 property are currently $22,490.
Daniel and Violeta Krajovski are among those racing to finalise the sale of a $550,000 four-bedroom home in Middleton Grange in Sydney's west to beat the stamp duty cut-off.
After spending two months browsing the market, the Krajovskis fast-tracked their purchase when they realised they stood to miss out on the stamp duty savings after June 30.
''I thought well, maybe we should act now before all of that happens, before it all changes,'' said Mr Krajovski. ''Otherwise, I probably couldn't afford it later.''
Mr Krajovski said the new $5000 grant would be about $15,000 less than what he's set to receive from the stamp duty savings.
The CEO of the Urban Taskforce, Chris Johnson, applauded the first home buyer incentives to buy new, saying they should lead to more housing supply.
Mirvac's CEO for development, Bret Draffen, agreed.
''NSW has a serious housing shortfall which has led to an affordability crisis that can only be tackled through an increase in the supply of new homes,'' Mr Draffen said.
The Housing Industry Association's NSW executive director, David Bare, said the first home buyer package ''should provide a real confidence boost in activity for new home construction''.
Most real estate agents were less supportive.
''I don't like it. It's bad policy,'' Ray White chairman Brian White said.
''It's an economic measure for builders, instead of a focus on what's good for first-home buyers.
''For many people, buying an existing property makes sense because often the new stock isn't suitable, and to deny people that incentive is a grave error of judgment.''
The president of the Real Estate Institute of NSW, Christian Payne, was also critical.
''Whilst the first home buyer is an important part of the market, the fact is that the vast bulk of all residential property transactions are for existing dwellings,'' Mr Payne said.
The general manager of Laing and Simmons, Leanne Pilkington, said the budget was ''very disappointing''.
''It's nice for the people who are buying new property, but let's face it, a lot of the new properties are a long way out.
''Yes we've got apartment developments closer in ... but you're really only benefiting a small percentage of people.''
The LJ Hooker CEO, Janusz Hooker, predicted a rush from first-home buyers of existing property ahead of the October 1 deadline for the $7000 grant.
''There'll be some sort of spike, that's for sure,'' he said.
''This action will be stimulatory for both developers and agents.
''What's causing the market to be below average, it's purely [lack of] confidence.
''Anything we can do that will get the market onto an upward trajectory is a good thing.''
With Rebecca Sullivan