I’m a recent first home buyer and I admire the notion of trying to help first home buyers but I am not sure Zed Seselja’s idea will be very effective. Why?
Well in NSW (which uses the same threshold) the no-SD for 1st home buyers seems to simply have caused prices to move closer to the $500,000 threshold. My girlfriend and I searched around Jerra and Gungahlin for a home and found Jerra to be relatively expensive even though the houses would have been SD free. Admittedly the demographic of Jerra may explain some of this. We actually found Gungahlin to be better value despite ACT houses attracting stamp duty!
I suspect any rational home seller currently trying to obtain, say, $450,000 for his/her house will attract people with about 468,000 to spend (SD being about 17,000 on such a house at the moment). Now if add Zed’s new threshold the seller will realise that those willing to spend 468,000 will consider his home, so he will jack up the price accordingly. In effect this will create extra demand and take the money from the ACT govt in forgone SD and give a free kick to existing homeowners whose houses are under $500k.
I believe about 20% of home buyers are first home buyers at any given time but certain house types, esp. the cheaper 3 bedroom houses for example will surely sure a bit in price. The SD-free threshold doesnt increase supply and doesnt reduce demand, it will actually create demand and drive some prices up. It will warp the market just as its warped in NSW.
The only solution is to either increase supply or reduce demand.