When I first heard about the First Home Owner Grant increasing from $7,000 to $14,000 for existing homes and from $7,000 to $21,000 for new or off the plan properties in 2008 with a further $3,000 supplement for any purchase bringing the grand total of the grant to either $17,000 or $24,000, my initial reaction was not as you’d expect. I’m a real estate agent and I was NOT excited. I was worried. The reason I was worried? Massive incentives bring with them, massive interest that turns into massive panic (as the end date looms) and finally massive competition which doesn’t just stimulate the real estate activity, it also inflates it. “Inflate” is a good word too, as it means “blow up” – and what happens when things are blown up too much – things burst. So, yeah I was concerned. The difficult thing with Governments attempting to stimulate the market, is that different markets have different levels of activity. Wagga Wagga at the time was performing pretty consistently on its own without the need of help. However Metro markets were stagnant and needed some propping up…all the way up! So we went through the phase of First Home Buyers competing against one another, prices rising and sales being made. Then the grant ended at the end of 2009 and we have been in the slow lane ever since. However, small incentives are sweet and do not carry the same level of hysteria that goes on with the massive ones we just mentioned. One of the key elements of NSW first home ownership that often gets swept under the carpet, is the free stamp duty for any purchase up to $500,000. To put into perspective that is a saving of up to $18,000. On a Wagga Wagga property sitting in the median house price range of $330,000, it’s a saving of a little over $10,000. Now come January 1st 2012, this stamp duty saving will be gone. The $7,000 will remain (Federal Grant), but the State grant of free stamp duty will be no more. Without sounding like a Real Estate Agent (although I am and I will) buyers looking for their first home should buy now! It’s a great step into the property market for the following reasons:
a) No stamp duty if exchanged by 31st December 2011
b) The market has already come back in some cases up to 10% so you have better prices out there than 12-18 months ago
c) Interest rates are still at record lows
d) The number of properties to choose from right now in your price range is ridiculous – take your pick
In short, do research on prices, visit as many properties as possible, get finance approved verbally from a lender, and make an offer. Good Luck.