The SMH reports that the NSW Berejiklian government has forgone almost $850 million in revenue in two years to help first-home owners enter the crashing property market:
New figures show the share of first-time buyers purchasing homes in the NSW property market reached 25.3 per cent in April – double the proportion two years earlier.
It comes as Treasury data reveals that between July 2017, when stamp duty concessions for first-home buyers were introduced, and April, 59,900 first-home buyers received stamp duty discounts worth more than $846 million…
This reminds me of an infamous statement by NSW Planning Minister, Anthony Roberts, where he claimed purchasing a Sydney property was a one-way ticket to wealth:
Below are the juiciest quotes from the article, published in February 2017, which MB comprehensively destroyed:
“Once you are in the Sydney housing market you are pretty well set then for the rest of your life”…
“We are not dealing with a bubble in the Sydney market… There is no bubble here. There might be a slowing down of growth. But the way the population is moving, and the population trending, which is upwards, you will find house prices will continue to rise”.
“What I want to do is to get people into the market place and then they can be beneficiaries of the increase in the value of their property.”
At the time, Sydney’s dwelling values had hit an insane 9.1 times household incomes, according to CoreLogic, up from 6.7 in 2012:
Shortly afterwards making these comments, the NSW Government implemented the above mentioned stamp duty exemptions for first home buyers (FHB) from 1 July 2017, which led to a surge in demand:
Since the NSW Government introduced its FHB bribe, this is what has happened to Sydney dwelling values:
That’s right, Sydney’s dwelling values have plummeted by around 15%, according to CoreLogic!
This means that many of the FHBs enticed into Sydney’s bubble are now facing negative equity.
The reason is obvious: the boost in FHB demand has been far outweighed by the slump in investor demand and non-FHB owner-occupiers:
The NSW Government sucker-punched FHBs.