Minister's call for negative gearing 'debate' resonates in the Hunter

GENERATIONAL CHALLENGE: Jarrad Carraro and Ash Fortington are among the state's young first home buyers, identified by some analysts as disadvantaged by negative gearing tax breaks for investors. Picture: Marina Neil

GENERATIONAL CHALLENGE: Jarrad Carraro and Ash Fortington are among the state's young first home buyers, identified by some analysts as disadvantaged by negative gearing tax breaks for investors. Picture: Marina Neil

IF all goes well with the settlement, Ash Fortington and Jarrad Carraro will spend this Christmas in their first home.

The couple, aged 30 and 29, rent in Merewether and bought a house in Cardiff three weeks ago.

It came down to them and another buyer at the end of a long, at times dispiriting process of whittling down Newcastle suburbs.

“We figured out pretty quickly we were getting priced out of suburbs,” Ms Fortington said.

“We were looking in the Merewether, Wickham kind of area, turning up to houses with 100 people putting down offers on the spot. In Mayfield, everything advertised in our price range was going for $50,000, $70,000 more. We weren’t really contenders.”

The couple are among the young buyers NSW Planning Minister Rob Stokes spoke of on Friday as he called for “a real debate about the policies, outside of supply, that governments at all levels can do to help provide greater opportunity for people to buy homes”.

In a rebuff of Federal policy, Mr Stokes used a speech to blame negative gearing tax breaks for worsening housing affordability in Sydney.

And with Newcastle median house prices rising 9.3 per cent in the year to September – and by almost a quarter in the 2291 postcode, which includes Merewether – Mr Stokes’s comments will resonate in the Hunter.

In a study of the latest quarterly data, the Hunter Research Foundation found the dream of owning a home has grown more distant in the Hunter.

“High house prices, combined with relatively stagnant wage growth, have offset the effects of record low interest rates in the last two years,” senior research fellow Dr Anthea Bill said.

“If the recent pick-up in house price growth continues, affordability for first-home buyers will remain a generational challenge.”

That is despite a nine per cent rise in multi-unit dwellings approved in the Hunter and Central Coast in the year to September, and a three per cent rise in house approvals.

But Iris Capital chief executive Sam Arnaout, the owner of two blocks of the Hunter Street mall, said Newcastle’s property market had “a long way to go” before it would come close to the dynamic in Sydney.

“I think it’s somewhat insulated from the Sydney market,” Mr Arnaout said. 

“There’s a long way to go before Newcastle becomes anywhere like Sydney is from a residential perspective, in the sense of an over-heating market.”

Preparing for new lives as homeowners in Cardiff, Ms Fortington and Mr Carraro said they might now survey the market as investors.

“It’s exciting, and scary; I guess we’d been looking for so long and reality has hit,” Ms Fortington said.

“We’re going to use this as a stepping stone to try and build a portfolio.”

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