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FHOG_A NSW PERSPECTIVE

FHOG_A NSW PERSPECTIVE: July 24, 2013

First Home Owners Grant: A NSW Perspective

By Robert Projeski of Australian Mortgage Options


On the surface the First Home Owners Grant has provided young Australians with the financial opportunities to take a big step and buy their first home. But Robert Projeski of Australian Mortgage Options is questioning the practice behind the theory.
Obviously different states have different laws and controls surrounding the FHOG incentives, creating different opportunities and problems across the country.
In NSW for example, there is no government incentive for people to buy property in existing areas; meaning that the people in their mid-twenties to thirties are being forced to buy empty property lots or new homes far out west, which in most cases is far away from work, family and the thriving city life.
The stamp duty concessions and FHOG are only available on new builds, meaning out in the back areas of Sydney, where there is yet to be infrastructure and you have the additional cost of commuting back to work in the city.
And most prospective home buyers don’t realise this, hoping to buy homes in Sydney’s Inner West and Eastern Suburbs. But if you look at the 20 postcodes in NSW that have the best benefits, the majority of them are past the M7.
As there is no incentive to buy where there is infrastructure in built up areas, you would almost call it a false economy for the state government as they are having to fast track infrastructure projects in these areas.
The savings are very lucrative but questions need to be asked of the validity of these incentives to first time home buyers. There are huge costs in getting to work which will result in this particular case requiring a car to commute back into the city.
It seems the state government in NSW at least is encouraging people to buy, but they don’t want people to buy in areas near where they work or where their families live.