Patrick Bright - home buyers who have a deadline to beat will typically pay more than an investor
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Property investors should negotiate cautiously in the coming months as first home buyers race to snap up properties before NSW stamp duty concessions end, according to a leading Sydney buyer’s agent and real estate author.
In September, the NSW Government revealed that FHB stamp duty exemptions and subsidies on existing homes under $600,000 would cease at the end of 2011.
EPS Property Search Director Mr Patrick Bright said since the announcement he had noticed an increase in new home buyer enquiries and activity at that end of the market.
“Home buyers will typically pay more than an investor, and new home buyers who have a deadline to beat could inadvertently pay a premium for existing properties in a bid to save money on stamp duty costs,” said Mr Bright.
“Unfortunately, when incentive schemes are in place many buyers see the money they are saving but forget to evaluate whether the current prices will be sustainable when the incentive comes to an end.
“Investors would be wise to tread cautiously in this climate to ensure they don’t get caught up in an emotional bidding war.”
With just over seven weeks to go until the deadline, Mr Bright said first home buyers would be likely to come out of the woodwork as they try to beat the December 31 cut-off.
“As the demand increases, so will prices and this could have a knock-on effect,” he said.
”Those wishing to buy in the next price bracket from $600,000 up to a million dollars may have to fork out a little more as the sellers of the sub $600k properties upgrade their homes.”
Mr Bright said he supported the decision by the O’Farrell Government to tighten the stamp duty exemptions as the savings were essentially passed on to vendors though increased sale prices.
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