The chief executive of a Sydney real estate group believes the state government is using first home buyers to soak up apartment supply in the nation's most expensive market.
The state government’s decision to scrap stamp duty for first home buyers purchasing properties under $650,000 has been met with mixed responses. While some have applauded the measure as a boost to housing affordability, others fear it could have an inflationary impact and further drive up house prices.
Starr Partners CEO Doug Driscoll said that while the new measures certainly look like a step in the right direction, we need to “stop the applause and critique the performance”.
“If the intention is to alleviate affordability woes amongst first home buyers, how did it reach the figure of $650,000? This tells me the measure was designed to drive more first home buyers into apartments,” Mr Driscoll said. “With far fewer investors as a result of the macroprudential measures and tens of thousands of new apartments in the pipeline, who is going to buy them otherwise?”
Throughout 2016, fears were stoked by numerous reports warning that a residential building boom could trigger an apartment oversupply in Sydney. While these concerns have now shifted more towards the inner-city Brisbane and Melbourne markets, Mr Driscoll believes the stamp duty changes are designed to drive more first home buyers into apartments.
“Less than 10 per cent of Sydney’s suburbs would have homes with a median price below $650,000,” he said.
“If the government was serious about alleviating barriers, it would completely abolish stamp duty for first home buyers or at the very least make the first $650,000 exempt, irrespective of the purchase price, and not cap it at a price that forces people into apartments to reverse engineer the cycle.”
[Related: Brisbane apartments heading for oversupply]