‘Get out of control’ stamp right bracket hurts housing listings and affordability: REIA, SQM Research

Property taxes are cutting lists and hurting affordability, a new report claims.


Australian stamp duties have “gone completely out of control” as bracket creep reduces the number of homes for sale and fuels affordability problems, real estate experts say.

A new report from the Real Estate Institute of Australia and SQM Research shows that the percentage of Australian homes available for purchase has fallen from 4.5 percent in 2008 to just 2.5 percent today, with significantly lower numbers in major capital cities. .

Report author Louis Christopher acknowledged that the numbers would also have been affected by a wave of panic lists in 2008 as the global financial crisis hit, while the current low stock numbers were partly due to prolonged lockdowns in Melbourne and Sydney.

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“We’re not saying this (stamp duty) is the whole reason, but this seems to be a major contributor,” said Mr. Christopher.

“There has certainly been a stamp duty bracket. We think this has increased the overall transfer costs, and we believe that would be quite a barrier to moving.”

The survey shows nationwide that stamp duty now equals 4.2 percent of a home’s price, up from 3.2 percent in 2011.

In Victoria, home to the country’s highest stamp duty, the typical tax on a Melbourne home was $20,650 (4.3 percent of the home’s value) in 2012, but is now $44,540 (5.4 percent of the home’s value). the value of the house).

20 Acland St, St Kilda, became one of the first Victorian homes to be subject to a stamp duty increase for homes valued at more than $2 million after it was implemented in July this year.


With median incomes rising more slowly than median house prices, stamp duty as a percentage of median income has risen from 25.1 percent to 34.3 percent.

REIA President Adrian Kelly said there were a number of factors that pushed prices up and brought list numbers down, including those who were nervous about being caught out by Covid-19 lockdowns.

Inevitably, though, a house in Sydney or Melbourne now costs nearly half of the average worker’s annual income in taxes.

He called on politicians to stop treating stamp duties and housing affordability as a matter of election terms and to outline a 20-year plan that would transcend changes in government.

“Housing taxes are part of it, but land clearance and planning is another,” said Mr Kelly.

“The stamp duty bracket creep is getting completely out of hand.”

House under construction

The list numbers have fallen, despite the number of houses built in Australia soaring over the past ten years.


The report also shows that the number of homes in Australia has risen from 8.6 million in 2008 to 9.6 million according to the latest estimates, making the declining number of homes for sale even more remarkable.

Mr Christopher said he expected there would be a short-term increase in housing numbers as Melbourne and Sydney exited the lockdown, but home buyers may have even less choice in the medium term.

“We run the risk that in the medium term, quotes could go even lower from here,” Christopher said.

“Unless we see a slew of changes needed to address affordability.”

SYDNEY

Sydney Opera House at sunset

The Harbor City has the second highest average stamp duty payments in the country.


According to the report, less than 1 percent of homes in the city are for sale, up from 2.5 percent at the end of 2008, with the most recent peak of 1.9 percent in November 2018.

This means a drop from 30,000 homes on the market to less than 15,000.

As units are added, the city has increased from about 2.5 percent of the homes on the market in 2008 to 1.2 percent.

Typical home stamp costs have increased from $22,545 (3.7 percent of the home’s value) to $42,457 (4 percent of the home’s value) and from $17,707 (3.5 percent of the home’s value). home) to $28,957 (3.9 percent of the home’s value). cents of the house’s value) for units.

The median income of a Sydneysiders was $70,470, but is now $91,744.

MELBOURNE

Melbourne is home to the highest stamp duties in the country. Photo: David Crosling.


Melbourne’s market liquidity peaked in 2012, with 3.2 percent of the market (or approximately 38,000 homes) listed for sale, but currently stands at 1.5 percent (around 20,000 homes).

With all properties included, the market is up from 3.4 percent in 2012 to 2.1 percent in August 2021.

The typical stamp duty for a home in Melbourne was $20,650 (4.3 percent of the home’s value) and is now $44,540 (5.4 percent of the home’s value) – making it the country that gets heaviest affected by stamp duty.

For units, the numbers were $17,870 (4.2 percent of the home’s value) and are now $31,370 (5.2 percent of the home’s value).

Waves for the typical Melburnian have risen from $67,662 to $91,109.

BRISBANE

SUNRISE WEATHER

Brisbanites pay less stamp duty than homebuyers in another state. Photo: Joel Carrett,


About 5 percent of Brisbane’s homes were on the market in 2008, but that number has now fallen to 2.5 percent.

The number of houses for sale peaked in 2011 at just over 3.5 percent, while their number is now just below 2 percent.

The liquidity of units in the city reached more than 8 percent in 2018 and is still above 6 percent.

Has the most affordable stamp duty margins in the country, with the typical home costing just $6,300 in taxes (1.5 percent of the home’s value) in 2012, while buyers today pay $12,850 (2.1 percent of the home’s value). House). For units, the numbers come out at $4410 (1.2 percent of the home’s value) and $5828 (1.4 percent of the home’s value).

The average worker made $68,936 in 2012 and now brings in $85,831.

Mr Christopher noted that as the country’s most affordable state, and with a range of other benefits, Queensland could attract more buyers pursuing a cheaper lifestyle as stamp duties and house prices in other states continue to rise at a faster rate.

ADELAIDE

Only 17 out of 100 houses are for sale in Adelaide today.


The South Australian capital’s liquidity peaked at around 3.2 percent in 2013, but is now at around 1.7 percent. With houses that have remained just below that level for the past eight years.

However, one in 20 units in the city is for sale today, slightly less than 1.3 in 20 were for sale in 2019.

A typical $15,430 stamp duty bill for a home in 2012 accounted for 4 percent of the home’s value, but has risen to $22,705 or 4.3 percent of the home’s value today.

Units rose from $12,180 (3.8 percent of the home’s value) to $17,330 (4.1 percent of the home’s value).

The typical annual salary shifted from $64,132 to $81,692 over the same period.

HOBART

Hobart Marina in Dusk Tasmania

Additional restrictions on development have put additional pressure on Hobart’s home prices and taxes.


Tasmania’s capital had 4.8 percent of its homes for sale in November 2012 and 1.1 percent in August this year.

The high water level for houses at the beginning of 2013 was about 4.2 percent and at the beginning of 2012, 8 percent of the homes were for sale.

While the average home drew $11,270 in stamp duty in 2012 (3.3 percent of the home’s value), it now stands at $22,498 (3.7 percent of the home’s value). For units, the numbers have increased from $8302 (3.1 percent of the home’s value) to $22,498 (3.7 percent of the home’s value).

Median annual income rose from $62,239 to $79,076 during that time.

But the island nation does have an ongoing problem with development being constrained by the difficulty of accessing supplies locally and making new construction more expensive, said Mr Christopher.

MOVING FORWARD

Alternatives to stamp duty include a broad-based land tax, which the REIA is aiming for – though it will meet opposition from those who fear retirees and retirees will be forced from their homes for being unable to pay the annual tax on their land.

In NSW, buyers are now given a choice between paying stamp duty in advance or paying annual land tax.

Real estate purchase

Buyers in NSW can now calculate what makes the most sense to them.


The government of Victoria in its latest budget appeared to have supported stamp duties for the foreseeable future, raising the impost for homes valued at more than $2 million.

The federal government also looked at including housing under the GST when the tax was introduced, but Kelly said the idea was unlikely to gain support today.

“But something has to be done,” he said.

“All prime ministers need to get their heads together and come up with something better than we have now – especially for the first home buyers.”

The report cites previous research by Deloitte Access Economics that showed that removing the tax would lead to a 30 percent increase in sales initially and a 60 percent increase over three years.

The federal government’s Productivity Commission has also recommended a broad land tax based on the unimproved land value paid annually, rather than the upfront tax burden.

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