I have a simple rule: when the Real Estate Institute complains about a policy, it is generally good for society. And when they praise a policy, it is usually bad.
And so it goes with the Chief Executive of the Real Estate Institute of New South Wales (REINSW), Tim McKibbin’s, latest rant over the New South Wales State Budget, released on Tuesday, which confirmed that the Government would persist with its policy of only offering the First Home Buyers Grant on newly constructed dwellings. From Property Observer:
…the NSW 2013-14 budget has left first-home buyers out in the cold with the failure to reintroduce the grant for existing properties.
The budget was an opportunity for the NSW Government to reinvigorate the property market with a reduction in stamp duty rates and the reinstatement of first-home buyer incentives on existing properties.
They have failed.
We are very disappointed NSW first-home buyers continue to be disadvantaged by the decision not to reinstate the first-home owners grant for existing properties.
We are not satisfied with the grants being limited to new properties and neither are first-home buyers, who instead of purchasing new properties are choosing to purchase no property at all…
It is very disappointing that the government has not recognised the failure of this policy and amended its policy to include existing properties.
Many first-home buyers are not interested in purchasing new properties. The scheme introduced last year has failed to date because it assumes that supply is being hindered by demand from first-home buyers for existing properties.
It implies that by redirecting first-home buyers to new properties it will solve the supply problem. The truth is, supply is hindered not by first-home buyer demand but by a convoluted, inefficient planning system and a tax system that is overly dependent on property.
It is time for the government to recognise the critical role first-home buyers play in the property market and implement what really needs to be done to help them – reinstate the first-home buyers scheme for existing properties.
Oh, the righteous indignation. Doesn’t the New South Wales Government know that it is the REINSW’s god given right that taxpayers support real estate agents’ commissions? Doesn’t it know that artificially inflating pre-existing property prices is good for all, and a proven winner for the economy and society at large?
But seriously, you can’t make this stuff up. If the REINSW was truly concerned about first home buyers’ (FHBs) welfare, it would lobby against negative gearing, which encourages investors to compete directly against FHBs, crowding them out, whilst doing absolutely nothing to boost supply. But hey, such a policy would make homes more affordable by lowering prices, and we can’t have that.
About the only credible statement in McKibbin’s rant is his comment on New South Wales’ “convoluted, inefficient planning system and a tax system that is overly dependent on property”, which I agree with wholeheartedly.
The more that Australia’s governments ignore vested interests like these, the better.