![Brittney Downer wants to buy a house before Victoria's 1 July elimination of stamp duty for first home buyers. 'Heaps of ...](/content/dam/images/g/w/f/s/9/m/image.related.afrArticleLead.620x350.gwgmsg.png/1496388492508.jpg)
Brittney Downer is in a hurry to buy. The high school maths and science teacher has been looking for a house in Melbourne's western suburbs since February, but wants to do it before July 1, when many first home buyers in Victoria will no longer have to pay stamp duty.
First timers buying a home up to $600,000 in Victoria already get a 50 per cent exemption on stamp duty, but Ms Downer is concerned that from next month, when the tax is waived completely - meaning an extra $15,353 in hand for someone making a $600,000 purchase - a wave of buyers will push up competition and prices even more.
Stamp duty will also be cut on a sliding scale for properties above that threshold to $750,000, so the first home buyer of a dwelling costing $605,000 will see their stamp duty bill drop from the current $31,370 to just $1046, State Revenue Office figures show. That gives an extra $30,000 to wield at an auction.
The risk for Ms Downer - and other hopefuls in her situation - is that a measure ostensibly designed to make home purchases more affordable for first-time buyers will have the opposite effect.
![NSW Premier Gladys Berejiklian announced cuts stamp duty for first home buyers this week.](/content/dam/images/g/w/i/3/7/f/image.imgtype.afrArticleInline.620x0.png/1496309545011.jpg)
"Heaps of other people will be waiting for July 1," Ms Downer said. "The prices will go up because of that. Our mortgage broker told us to buy sooner rather than later."
Many commentators say the decisions by Victoria and - as of this week - NSW to cut stamp duty for first home buyers will only make it harder for those same people, because the extra money will simply flow to the pockets of vendors.
"The absence of having to pay stamp duty is really a grant to the vendor more so than the purchaser because ultimately it only stokes the market," said Melbourne buyers' agent Richard Wakelin. "It is better to get in now before July 1 and at least get the 50 per cent discount that is currently available."
Some economists say - as the Victorian government did when announcing the stamp duty change in March - that supply of new housing stock also has to be boosted to offset increases in demand.
The median house price in Werribee, where Ms Downer and her partner Bryce Miles are trying to buy - jumped almost 14 per cent last year. They're still rising.
![Some economists say - as the Victorian government did when announcing the stamp duty change in March - that supply of ...](/content/dam/images/g/w/1/0/m/m/image.imgtype.afrArticleInline.620x0.png/1496197906055.jpg)
Three-bedroom houses with backyards - what Ms Downer and Mr Miles want - are currently priced in the "early to mid" $400,000-range but they are already rising, said Samantha McCarthy, a real estate agent at HockingStuart Werribee.
"It has increased. Not drastically, but significantly enough that it may push some buyers out to areas they may not have had in mind four months ago."
Ms McCarthy expects competition to increase after July 1.
"Some buyers are holding off," she said. "A handful are trying to get in now, knowing it will be more competitive."
![Veteran economist Saul Eslake said the tax change showed politicians weren't serious about wanting to help first home buyers.](/content/dam/images/g/t/i/b/9/m/image.imgtype.afrArticleInline.620x0.png/1496388479250.jpg)
Veteran economist Saul Eslake, who, like Treasurer Scott Morrison, criticised the Victorian measure, said the tax change showed politicians weren't serious about wanting to help first home buyers.
"There are two possibilities," Mr Eslake said. "The first is that they simply don't understand what these measures do. A more cynical interpretation – and I've never found in my career cynicism leads me to erroneous conclusions – is that for all for all the handwringing that they engage in about the difficulties faced by first home buyers, they are aware that in any given year, on average across Australia there will only be 100,000 or so successful first home buyers, whereas at any point in time there are at least 10 million people who own at least one property.
"Politicians of all persuasion by their actions demonstrate that they are far more concerned about the interests of those who already own property and who have a vested interest in seeing property prices continue to go up than they are about people who don't own property," Mr Eslake said.
Since February, Ms Downer and Mr Miles have been all around the suburbs of Wyndham Vale, Werribee, Hoppers Crossing and further north to Sydenham for their home. They will keep looking.
"All we ever do on Saturdays from the first at 10am until 3 pm is looking at open houses," she said. "We go to auctions on the weekend as well."