This article is from the Australian Property Journal archive
AFTER years of devastating the property market, New South Wales is turning the corner whilst Queensland will continue to provide relief for first home buyers.
Yesterday the Rees and Bligh Government delivered their respective State Budget.
And for the first time, the property industry has embraced the NSW Government’s state budget.
The Development Institute of Australia NSW chief executive Stephen Albin said year after year of devastating results these key measures provide a glimmer of hope the Government has turned the corner.
“These measures are cleverly designed and targeted to save NSW from another year as Australia’s worst performing housing market,” he added.
Developer representative body, the Urban Taskforce’s chief executive Aaron Gadiel said the NSW Government’s stamp duty reduction for new homes is the strongest measure taken by any government in Australia to support new home construction.
Under the new Housing Construction Acceleration Plan, from 1 July until 31 December 2009 purchasers of newly constructed homes, other than first home buyers, will only pay half the normal stamp duty on purchases of up to $600,000 in value.
Gadiel estimates that for a $400,000 purchase, there will be saving of just under $7,000 and, for a $500,000 purchase, a saving of close to $9,000. The maximum benefit goes to a purchase of a $600,000 home, where the saving is just over $11,000. The scheme is expected to cost $64 million.
“Some people who aren’t first-time home buyers are now likely to bring forward their home purchase to take advantage of this grant.
“The government has also extended its $3,000 grant, for first home owners who buy a newly-built home, until June 2010 – six months past the scheduled expiry of the Federal Government’s First Home Owners Grant,” he added.
Meanwhile Gadiel said the residential development and construction industry will hear this message loud and clear.
“The number of construction starts on new homes in NSW has been in serious decline since 2002. In that year work started on 48,000 homes, but by 2008 this figure has almost been halved – with work starting only 26,900 homes.
“The last six months of home approvals suggests Victoria will be building two houses for every one built in NSW and they will match NSW in terms of apartment and town house construction,” he added.
Gadiel also welcomed new $200 million Local Infrastructure Fund which will give interest free loans to NSW councils to fast-track local infrastructure projects.
“Local councils will now have no excuse for sitting on the development levies they’ve collected from home buyers,” he said.
UDIA NSW president Judy McKittrick said the challenge now will be to tempt property investors back into a State that had almost abandoned them.
“Investors will be looking for a sustained commitment from the NSW Government to delivering on key infrastructure projects and a bureaucracy that welcomes growth,” she added.
Knight Frank Australia CEO David Woolford said to attract increased investment into NSW, the Government must be prepared to make an investment in the first place.
“The property sector has always been an easy target for revenue raising and the Government’s forecast that the sector will help them back into the black again by 2011-12 is probably correct.
“We need to decide which is more important, maintaining our AAA rating or recognising our weakened competitive position and investing in the long term economic recovery of New South Wales,” Woolford concluded.
In Queensland, the Master Builders director of housing Darren Barlow said the announced $18.2 billion building program, to be spent primarily on long-term infrastructure projects, will provide employment and stability for the state’s building and construction industry.
“Another highlight that translates into good news for the building industry is the government’s commitment to first home buyers, with the threshold for stamp duty on vacant land to be almost doubled.
“First home buyers will save up to $5,675 on the purchase of vacant land, with transfer duty abolished for blocks worth up to $250,000–a significant saving when purchasing your first home.
“With home loan figures telling us that first home buyers are currently driving stability in residential property, Master Builders strongly supports initiatives that will continue to encourage first home buyers into the market,” Barlow concluded.
Australian Property Journal
