NSW Government must help first-home buyers as home ownership rates decline

NSW Government must help first-home buyers as home ownership rates decline

NSW Treasurer Dominic Perrottet. Picture: Justin Lloyd.Source:News Corp Australia

There’s no denying the home ownership rate has declined for each generation since the Baby Boomers.

But the question remains whether the decline represents a delay or a permanent shift. And of course how to ensure we continue our hard-earned, but lucky streak, of high home ownership.

Statistically speaking it appears the overall home ownership rate has held up well since it was at 67 per cent in 2016, only marginally less than the 68 per cent in 1976.

However this occurrence over the past four decades can be largely attributable to Australia’s ageing population.

MORE: How much average Aussie has in the bank

The NSW government’s recent intergenerational report shows 45 per cent of Australians people born between 1982 and 1991, that is between 30 and 39, have managed to get into the property market.

This compares with 60 per cent of people born between 1942 and 1951, the so-called early Baby Boomers.

NSW Government must help first-home buyers as home ownership rates decline

Buying at auction has been nearly impossible. Picture: Tim Hunter.Source:News Corp Australia

NSW treasurer Dominic Perrottet has described these as “very stark” statistics, as he seek to address the huge challenges faced by our younger generations in their quest for home ownership.

Most agree it is the deposit that is the key barrier to home ownership.

The intergenerational report comes as the treasurer considers long-term reform of the state’s property tax system that could lower the deposit barrier for all, by removing the need to pay upfront stamp duty, which typically adds 1.8 years to the time it takes to save for a deposit.

The tax reform proposal suggests instead that first home buyers get a $25,000 grant to help them enter the market with the grant replacing existing stamp duty concessions.

The one size fits all simplicity for first timers makes it a worthy proposal.

Except of course for the strong school of thought that grants merely allow vendors to pocket another $25,000.

Latest University of NSW research argues the grant approach does nothing to make homes more affordable.

But while the treasurer seeks to advance his worthy credentials as an economic reformer, there is also a troubling post-Covid-19 pandemic situation faced by young buyers on the outskirts of Sydney.

There has been a startling increase in house and land prices, and it can’t all be put down to the HomeBuilder scheme.

NSW Government must help first-home buyers as home ownership rates decline

Current incentives aren’t enough for many first-home buyers. Picture: Tim Hunter.Source:News Corp Australia

Take the price boom happening in Box Hill. Last August there were 300sqm lots selling for $440,000. Just recently 300sqm lots were being listed for $680,000. Pre-registrations for purchasing sat at 100 a year ago, now it is 1000.

There is no NSW stamp duty payable up to $400,000 and a concessional rate up to $500,000. Above that it’s the full rate – around $20,000 on $550,000 for first time buyers.

As there is now not much land around for that price in Sydney post-pandemic, first home buyers are currently unable to afford a new home.

And the current first homebuyer support scheme doesn’t work in practice. Next week’s state budget needs to step up for the current crop of first time buyers.

Originally published asGovernment must step in to help first-time buyers

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