John McGrath thinks NSW FHB incentives will assist in balancing property market

John McGrath has raised the spectre that the NSW State Budget stamp duty cuts and grants for young buyers will "ultimately raise property prices due to higher competition."

But with Sydney and Melbourne at their peak pricing, McGrath suggests softening market conditions might balance out any price effect from greater first home buying activity.

'Especially if there are fewer investors in the market due to tighter lending restrictions," McGrath told his Switzer readers.

CoreLogic quoted recent ABS statistics showing that first home buyer activity in NSW hit a record low of 7.5 percent of new owner occupier mortgages last September and had increased only marginally since then to 8 percent in March this year.

"The long term average is 17 percent, so we’re a long way off that," McGrath said.

McGrath added he was concerned by the good initiative be funded largely by disincentivising investor activity and foreign ownership.