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First homebuyers taking advantage of NSW stamp duty concessions

A man in a blue shirt looks at a sold sign in front of a house.
Jamie Lee is one of an increasing number of first homebuyers entering the NSW market after changes to stamp duty.

ABC: Emily Laurence

Changes to stamp duty have given the housing market a bump, despite figures showing mixed results for affordability.

High prices in Sydney have long made it the centre of the national debate on affordable housing.

However, new data from CoreLogic for the June quarter revealed the number of first homebuyers entering the market in NSW is up 59 per cent.

That follows changes by the NSW Government — which took effect in July — to abolish stamp duty for properties up to $650,000 and give concessions for homes up to $800,000.

For Jamie Lee, buying his first house in Sydney's south-west was a no-brainer.

"It's a beautiful house I just bought," he said.

"For me, it was the right decision. I looked at the area, it was close to the shops and everything."

Mr Lee said the changes to stamp duty were part of his decision to buy.

"That ran through my mind prior to even coming to the auction, when we were working everything out," he said.

"They've helped quite a bit."

Real estate agent Glen Craigie, who operates in Liverpool, in Sydney's south-west, said he had seen activity in the area lift.

"It has definitely changed the buyer activity that we are seeing," he said.

"First homebuyers who 12 months ago were missing out now have the confidence to turn up to an auction without feeling they were going to lose out to an investor."

Mixed results for affordability

Despite the figures showing an increase of first homebuyers entering the market, CoreLogic research analyst Cameron Kusher said the new data calls into question the sustainability of housing markets like Sydney's should interest rates go up.

He said on average the mortgage repayments on a median priced property consumed almost half of a Sydney family's household income.

"The dwelling price to income ratio in Sydney now sits at 9.1 times," Mr Kusher said.

"Which basically means if you could save every single cent that you earned every year and you were going to buy the median priced property outright you'd be 9.1 years of your income."

Research showed that prices in Sydney were down half a per cent in October, however Mr Kusher said the movement was mostly driven by changes to the more expensive end of the market.

"In Sydney over the last three months we've actually seen values start to fall," Mr Kusher said.

"If you look at that, the lower end of the market is probably going to hold up better than the higher end of the market where we are certainly seeing demand wane."