It's double or nothing for first-time buyers in NSW

THE Great Australian Dream died in June for many, writes The Daily Telegraph's property editor Kirsten Craze.

THE Great Australian Dream died on June 12 when the New South Wales government ripped through our home-owning reverie and stole $7000 from us.

Surely it has always been our national birthright to own a quarter-acre block with a Hills hoist out the back, a Victa lawnmower in the shed and an upstairs teenager's retreat for our kids to call home until their early thirties?

But maybe the dream is not completely over, young Australia.

And while it is tempting to direct your collective scorn at Barry O'Farrell, it might not be the end of the road for home ownership. It might just be that the path has considerably changed.

Buried in the State budget papers earlier this month, behind the wall of Christmas-in-June handouts to the value of $35,000 for buyers of brand new properties, NSW learnt that the $7000 First Home Owner's Grant, which has been our rite of passage into real estate since 2001, was to be axed.

This latest blow to young buyers begins on October 1, less than a year after they had to start paying up to $17,990 in stamp duty after a long-term exemption on purchases under $500,000.

Within minutes of announcing the end of the long-standing grant, The Daily Telegraph's Facebook page was flooded with disgruntled 20- to 30-somethings airing their disgust. "That's it, the dream is over", "It's just not fair, I give up", "Thanks again, Barry".

So, it seems, Gen Y no longer has a leg up onto the property ladder and instead of rejoicing in the reality that the property market may now be able to actually work within the boring, but practical forces of supply and demand, it seems many first-time buyers are throwing in the house-hunting towel.

For many, the reality of owning a home has been pushed right out of the picture for today, probably next year and maybe even the year after that.

The brutal truth is shocking but "Generation Right Now" is just going to have to wait and save.

But while they scrimp and save and bellyache online in 149 characters or less, young Australians are going to have to take a leaf out of the eurozone belt-tightening book and consider their individual austerity measures. Because the real toil in saving for a property does not include package holidays to Bali, nor does it include a new set of mags or subwoofer for a $30,000 car which still holds an outstanding $20,000 personal loan, but has a street value of even less.

The sheer dismay at not having an immediate slice of the home-owning pie cannot be soothed by dropping an imaginary $10,000 at Harvey Norman on an entertainment system, Xbox, iPad and the complete box-set of the Vampire Diaries in Blu-Ray.

The thing is, it is still real money even if the invoice is 1000 days away. Now, I am the last person to dispute that getting on the property ladder should be every Australian's birthright, of course it should. And while we're at it, let's include complaining about out-of-control house prices as our next national sport. Sydney house prices are insane and gathering that dreaded 20 per cent needed for a deposit is tough, I know, because I recently did it.

As a property journalist I feel that now is the right time to reveal an industry secret -- Sydney house prices are not a government conspiracy and they are not even a sinister plot cooked up by dodgy real estate agents. They are actually a result of one basic fact: Everyone wants a piece of this city and it seems they're prepared to pay stupid money to get it.

So squirreling away enough for an average first home buyer deposit -- somewhere between $60,000 and $80,000 - will not happen the very year you decide to buy a house and it definitely won't happen after a two-year stint working in London.

Yes, it isn't fair that a generation ago Sydney house prices were approximately four times the average annual salary and are now estimated to be about nine times the annual salary. And it is not fair that forward-thinking, or lucky, buyers who got into the market in the 1990s have walked away with millions of dollars in profit. It is not fair, but it is just the way it is.

But listen up Gen Y, there is a silver lining. It is a buyer's market now where Sydney prices in some neighbourhoods have stagnated so there is plenty of time to save, there are far more lenders out there than our parents ever had, interest rates aren't pushing 18 per cent and if Sydney prices are still too scary, then there is always the country. And why not, the Dubbo median house price is $250,000. It's just a shame that the state's $7000 regional relocation grant to help city slickers make a tree change doesn't apply to you, sorry, you need to buy a metropolitan home first.

Kirsten Craze is The Daily Telegraph's Property Editor