A new report has drawn a link between stamp duty, rising property prices and declining listings, with Real Estate Institute of Australia (REIA) President Adrian Kelly claiming the tax has become the antiquated blight of the Australian housing sector.
REIA and SQM Research recently released market analysis entitled, Stamp duty: The relationship to Australian housing affordability and supply. The report indicates listings have plummeted across the country as housing prices and taxes on sales skyrocket.
According to the report, total national property listings have been steadily falling over the past year to currently sit at just over 200,000 properties – a record low on SQM’s numbers.
By way of comparison, between 2011 and 2019, a period that recorded two upturns and one downturn, national available listings ranged between 380,000 to 300,000 dwellings.Â
The report noted this has caused market liquidity to be nearly halved. In 2008, up to 4.5 per cent of all residential properties were available for sale at any one point in the market.
Currently, the percentage available is below 2.5 per cent.
REIA President, Adrian Kelly said stamp duty remains a prohibitive tax for all buyers, adding tens of thousands of dollars to the purchase of a home.
For empty nesters, this means paying tens of thousands of dollars on a home they may only need for five years could result in less properties being placed on the market.
“Stamp duties as a percentage of average national earnings have jumped over the past decade to 34.3 per cent from 25.1 per cent recorded back in 2012, up almost one third. In Sydney and Melbourne, stamp duties alone can represent nearly half the average annual income,” Mr Kelly said.
Mr Kelly said transfer duties as a percentage of median property prices have jumped in most capital cities over the nine years between the March quarter of 2011 and March 2021 because of rising property prices.
“First home buyers are borrowing more to accommodate higher stamp duties and affordability is reducing,” he said.
“In real terms, at current median income and rising housing prices, had stamp duty remained at the 2012 amount, home buyers would save an average nation-wide of $21,000 with Victorians saving a whopping $35,000, or half an annual median salary in Australia.”
Louis Christopher, Managing Director of SQM Research, explained the study has found there has been an ongoing decline in listings over the past 10 years.
“The decline in listings has been occurring despite the steady increases in total dwellings across Australia and even through the various housing cycles,” Mr Christopher said.
“The long-term decline in listings fundamentally represents a shortage of real estate which is contributing factor to the surge in prices.
“While there may be various reasons for this situation, we believe stamp duty bracket creep is a leading contributor. When transaction costs of transferring properties disproportionately rise compared to dwelling prices and incomes, (as what we have found) then that must be a massive disincentive for property owners to move house.”
