Urban Land and Housing – NSW Property market looking like the best in the Country

housing was long overdue and will help to reduce the stock shortage over the next few

years.

Off the plan purchases offer significant opportunities but pricing these purchases is difficult

and unless priced correctly can lead to losses. The main thing to remember is that you

should not pay more and should, in fact, pay less than any purchase available for

completed new properties.

We believe that in NSW there is potentially a shortage of stock likely for the year of more

than 20,000 dwellings. This shortage will keep pressure on prices and rentals. The data

points to Sydney entering a new housing growth cycle and we are expecting growth that is

higher than the long term house price predictions growth over the next 12 months.

The comparative affordability of units is likely to maintain demand in this segment and

hence we believe that well positioned units in this segment may provide the best growth

potential. Unit sales volumes are now higher than house and land sales.

The New South Wales government reports that the NSW Budget has already returned to a

surplus. This is some two years earlier than was previously predicted. The forecast for the

period 2010-2011 is a surplus of $885 million.

They are intending to invest some $22.3 billion over the next four years in the

Metropolitan Plan which will see the commencement of some $4.5 billion in spending on

the Western Express and some 1,300 new buses being delivered, and the Dulwich Hill light

rail.

Of more important note for those of us involved in the housing market are the changes in

the stamp duty. To summarise:

All off-the-plan purchases of residential property will be exempted from stamp duty for the

next two years, up to $600,000;

A 25% stamp duty cut for new properties purchased after construction for the next two

years;

A first home buyers benefit grant arrangement whereby a first home owner will be entitled

to up to $29,490 if they buy off the plan in the pre-construction stage; and

A zero stamp duty arrangement for the next two years for those over 65 where they sell

their existing home to down-size into a newly constructed home to the value of not more

than $600,000.”