Canberra's first home buyers could soon 'broaden their horizons'
Canberra's first home buyers could soon look to established suburbs to enter the property market, industry figures say, as the ACT Government moves to abolish stamp duty and the first home owners grant.
Chief Minister Andrew Barr on Tuesday announced the changes, to take place from July next year, that will abolish stamp duty for first home buyers on an annual household income of $160,000 or less.
That would be implemented in parallel with the abolition of the first home owners grant, affecting an average of about 1800 such buyers a year.
Of those 1800 buyers that received the grant and claimed the home buyers concession, only 200 in 2017 received a discount through the scheme, leaving about 1000 worse off, with the other 600 buying established homes and paying full stamp duty.
Industry has largely backed the proposals, though some cite concerns about the year-long lead time for the change, as well as potential impacts on the building of new homes in Canberra.
Mr Barr said the changes would "open a broader range of housing" on the market for first home buyers, and delivering help to those buyers with these particular changes was fairer than other proposals.
He said that one of the outcome of targeting government incentives at new housing was "to see a lot of first home buyers moving into new estates", and the changes would "allow more first home buyers to move into more established parts of Canberra".
The Housing Industry Association, Master Builders ACT and Real Estate Institute of the ACT all broadly welcomed the changes, though HIA ACT-NSW executive director Greg Weller warned of the long lead time.
He said abolishing the tax was a a positive move, but the "longer phase in" until July next year was concerning as the government ran the risk of distorting Canberra's real estate market.
"When government intervenes in teh market, they need to have light fingerprints, and this potentially stalls demand in the first hald of next year, as people hold off waiting to take advantage of the changes," he said.
"So, in terms of implementation, we think bringing it in immediately possibly would have been a better way of managing that change."
Mr Weller also said that while the change would allow some first home buyers into established suburbs - likely in more affordable outer areas, given the income limit - the HIA would argue that any incentive, or removal of concessions, should be geared towards new home building.
"If we can push incentives towards new homes, then that potentially contributes to housing stock and puts downward pressure on the market," he said.
"But by setting a cap on household incomes, and taking the ceiling off the concessions, I do think it also better reflects the prices of homes in Canberra today, the way it is [currently] structured, made it more difficult."
Mr Weller said he also expected the changes would see more first home buyers looking for existing apartments or houses in established, but not necessarily inner city suburbs, at properties likely in the high $500,000 market.
MBA ACT chief executive Michael Hopkins also backed the move, but said removing stamp duty was only one measure needed to improve housing affordability.
Mr Hopkins reiterated the association's calls for the territory to release more land for new housing, and to consider how it could use its surplus to help industry, community housing providers and community groups to provide more affordable housing.
REIACT president Michael Kumm said first home buyers currently did not play a huge part in the market Canberra's real estate agents dealt with, partly as many currently bought new apartments off the plan.
But he said the changes could see more first home buyers knocking on agents' doors interested in more established homes, and that such buyers would make a saving on any property worth more than about $350,000.
Mr Kumm said first home buyers might be able to afford a better property, in a better location, and the changes would allow them to "broaden their horizons" beyond new apartments to existing unit in established suburbs and possibly some affordable detached homes.