With Sydney’s housing market suffering the second worst price bust in modern history:
First home buyers (FHBs) are shunning the market, despite housing becoming more affordable. From Domain:
Sydney properties are becoming more affordable as prices fall, but the number of first-home buyer stamp duty exemptions and concessions have taken a sizeable drop of more than 20 per cent in the past year, new data shows.
About 6200 exemptions and concessions were granted to first-home buyers in NSW over summer, data from Revenue NSW shows. There were 7940 issued over the same period last year…
Last month, 1961 exemptions were granted, the lowest monthly number since July 2017, when the threshold lifted from $550,000 to $650,000 while the concession cap increased from $650,000 to $800,000…
The change boosted first-home buyer activity, Ms Owen said, prolonging price growth at the lower end of the market as the downturn took hold.
“Those who could afford to may have already utilised the policy and now we’re seeing that … drop-off,” she said.
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FHBs avoiding Sydney’s crumbling market makes sense, given most people expect prices to continue falling. Why catch a falling knife?
In many ways, this reflects what Shane Oliver last year predicted was ‘FOMO’ becoming ‘FONGO’ in a falling property market:
“We are not there yet, but FOMO (fear of missing out) risks becoming FONGO (fear of not getting out)”.
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness.
Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.
