HOUSING IN THE SPOTLIGHT FOR NSW GOVERNMENT
The Housing was a key focus when the NSW treasurer handed down his 2017 budget recently – and the aim was to make it easier to find and afford a home.
In his budget, the treasurer announced a number of initiatives to improve housing affordability and supply. The $4.3 billion housing affordability package includes $14.4 million of new investment housing affordability measures over 2017/18, $12.5 million over the same period to cut red tape and help accelerate major developments and $4.5 million to construct 30,000 new homes in Sydney’s priority precincts in 2017/18.
In a statement, Housing Minister Anthony Roberts said: “Our number one priority as a government is to get more houses built and to market to help make new homes more affordable.”
An estimated 75,000 new homes – double the long-term average – are expected to be built within the next financial year, which is expected to cool the hot property market.
The Priority Precincts
There are 15 “Priority Precincts” that will be “fast-tracked” into about 30,000 new homes with “accelerated rezoning and more diverse developments”.
These areas are Belmore/Lakemba, Burwood/Strathfield/Homebush, Campsie/Canterbury, Cherrybrook (Government land), Frenchs Forest, Glenfield, Leppington Town Centre, Anzac Parade corridor, Riverwood, Schofields Town Centre, Seven Hills/Wentworthville, St Leonards/Crows Nest, Telopea, Turrella/Bardwell Park and Westmead.
First home buyers among the winners
One of the major announcements was the scrapping of stamp duty for first home buyers on new and existing homes up to $650,000 and introducing stamp duty discounts for properties worth up to $800,000. Stamp duty charged on lenders mortgage insurance will also be scrapped when it is required for first-home buyers with limited deposits.
In another boon to first home buyers, local investors purchasing off the plan properties will no longer be able to access stamp duty concessions.
In addition, the government will increase the foreign investor surcharge from 4 to 8 per cent on housing stamp duty. Overseas buyers will also pay a 2 per cent surcharge on land tax.
HEALTHY NSW COFFERS (THANKS TO HOUSING)
Despite expectations that the housing affordability initiatives may temper Sydney’s housing market, it doesn’t sound like the government is expecting the market to crash any time soon if the strong forecasts for stamp duty revenue are anything to go by.
In 2016-17 transfer duty revenue was $9.63 billion – the largest ever recorded. And of this, $6.8 billion was from home sales. The overall figure was even revised up by $856.9 million, due partly to “stronger than expected price and volume growth in the residential property sector.”
Next year, duty collected is expected to jump a further 5.9 per cent to $9.7 billion, while the following year it’s expected to be $9.87 billion.
House price growth is expected to moderate off the back of tightened lending standards, slow wages growth and strong housing supply. The housing market was among areas identified as the “largest risk to the forecasts, both to the upside and the downside” due to its cyclical nature and the flow-on effects.
“Higher than expected interest rates or a sharp decline in dwelling prices could also bring an end to the cycle,” the budget statement said. “On the upside, strong population growth or supportive government policies could boost demand and drive higher-than-expected activity.”
MELBOURNE PIPS SYDNEY AT THE POST (JUST)
Residential property prices in Australia rose 2.2 per cent in the March quarter 2017 – the fourth consecutive quarter of growth, according to the latest figures from the Australian Bureau of Statistics (ABS).
The capital city residential property price indexes rose in Sydney (+3.0%), Melbourne (+3.1%), Adelaide (+1.5%), Canberra (+2.8%) and Hobart (+3.4%) and fell in Perth (-1.0%) and Darwin (-0.9%). Brisbane was flat (0.0%).
Annually, residential property prices rose in Sydney (+14.4%), Melbourne (+13.4%), Hobart (+11.3%), Canberra (+8.9%), Adelaide (+5.0%) and Brisbane (+3.5%), while they fell in Darwin (-5.9%) and Perth (-3.5%).
Source(s): Residential Property Prices, Quarterly Percentage Change, March Quarter 2017-Residential Property Prices, Quarterly Percentage Change, March Quarter 2017