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What does budget 2017 mean for the Nowra real estate market. Our Director Karl Poulton shares his thoughts.
There has been plenty of discussion leading up to the budget about housing affordability. There were outlined policy changes in an attempt to address this issue.
There was good news for North Nowra residents in the budget , The Far North Collector Road project, connecting Illaroo Road in North Nowra to Moss Vale Road, will get $13.8 million in the next financial year.
First home buyer accelerated saving scheme
Saving for a home deposit is hard , it’s a challenge very real for first home buyers. The Federal Government in its budget announced the First Home Super Saver Scheme, this will allow entry-level buyers to save funds at a discounted tax rate by making additional contributions to their superannuation.
These additional contributions, and earnings made on them, would then be able to be withdrawn to be used as a home deposit. The government hopes this will enable first home buyers to build savings more quickly for a deposit.
Mr Poulton notes, this measure will assist first home buyers in saving for their first home, given the tax advantages of investing in superannuation hopefully this shortens the amount of time required to save for a deposit.
Mr Poulton doesn’t believe this scheme will have an up-ward trend on house prices as other first home buyer grants we have seen in the past.
Retirees holding onto their family homes have been given a $300,000 incentive to sell under a federal budget plan to encourage older property owners to downsize.
Home owners aged 65 and over selling a home they have lived in for 10 or more years will be able to make a non-concessional contribution of up to $300,000 into their superannuation from the proceeds of the sale.
Both members of a couple are allowed to take advantage of this measure for the same home.
Mr Poulton notes that the lack of family sized homes available to purchase across the greater Nowra area has been one of the drivers of the housing shortage we have seen over the past 12 to 18 months. Often, we see older home owners have been reluctant to sell for both sentimental and financial reasons.
Often selling property is costly and funds left over after buying a smaller home could then be considered in the means test. However this policy will be exempt from the age test, work test and $1.6 million balance test.
The Federal Government hopes this change in policy will reduce the barrier to downsizing for the baby boomer generation, many of whom are living in homes with extra bedrooms and sizable maintenance costs.
However, a consequence of this policy shift is if Sydney based property owners sell their home and look to make a sea or a tree change, housing supply in the Nowra area will continue to remain tight and real estate prices will continue to restrict first home buyers from entering the real estate market.
Why not call Professionals Clyde Poulton Real Estate and find out how these changes may impact the value of your home.