Stamp duty exemption: Where to find the most homes in NSW for under $650,000

 Opportunity knocks for first-home buyers trying to break into the Sydney market as the upfront costs are reduced. The start of the new financial year saw a suite of measures implemented that are designed to ignite entry-level activity and ease the financial headache of the momentous first leap onto the property ladder.

Stamp duty has now been axed in NSW for new and established homes up to the value of $650,000 with a sliding scale of concession in place for homes between $650,000 and $800,000.

Duty is a burden on all residential property transactions. It is an upfront cost that has to be paid within three months of the date of exchange of contracts (to avoid interest incurred).

Economists have long debated the inefficiency of stamp duty as a government revenue stream. Ultimately, for many households stamp duty can deter a move because of the high transactional cost.

Let’s put this into perspective: the median house price of $1.15 million in Sydney will set buyers back an staggering $48,828 in stamp duty charges. A unit at Sydney’s median of $717,899 will incur a duty of $27,795.50.

The new measures will amount to considerable savings. On the day of the policy announcement, entry-level buyers across NSW would have assessed how their personal situation would be impacted, both in dollar savings and market access.

The stamp duty changes are intended to reduce upfront costs. However, to avoid this tax it is important to discover the actual prospects of finding a home under $650,000.

Just over one-fifth of houses transacted in Greater Sydney fell below this price point based on sales data over the six months to the end of April. It may appear to offer the first-home buyer choice but the figure is distorted by the Central Coast, Blue Mountains, South West and West.

• Related: Stamp duty changes give Sydney buyers confidence
• Related: Sydney housing market enters ‘new phase’
• Related: Could micro homes solve Sydney’s affordability crisis?

The Central Coast offered a positive outlook with 59 per cent of houses selling below the threshold of $650,000. The Blue Mountains offered the next best opportunity, with half of all houses sold.

Affordability in the South West and West equated to roughly 30 per cent of houses selling below $650,000. The moral of the story is to search further afield if you want your own block of land.

First-home buyers who consider a unit will find greater prospects of securing a home, with just over one-third of units selling below $650,000. Opportunity exists across all regions of Sydney, albeit in some cases chances are slim. A quarter of units sold below $650,000 in the Inner West, this figure jumped to 91 per cent of sales in the South West.

It appears the odds may be stacked against first-home buyers who have their sights set on buying in Sydney’s inner or middle ring. It is the consistent theme a foot on the ladder means a compromise on location or property type.

Dr Nicola Powell is a data scientist at Domain Group.