Stamp duty has become the antiquated blight of theAustralian housing sector as prices soar and governments continue to penalise homebuyers with higher taxes which is leading to a reduced number of properties onthe market.
Real Estate Institute of Australia (REIA) and SQM Researchhave released a market analysis titled Stamp duty: The relationship to Australianhousing affordability and supply, which shows that listings have plummetedacross the country as housing prices and taxes on sales skyrocket.
Listings continue to fall
According to the report, total national property listingshave been steadily falling over the past year to currently sit at just over 200,000properties a record low on SQMs numbers.
By way of comparison, between 2011 and 2019, a period thatrecorded two upturns and one downturn, national available listings rangedbetween 380,000 to 300,000 dwellings.
As a result, market liquidity has nearly halved. In 2008,up to 4.5 per cent of all residential properties were available for sale at anyone point in the market. Today the percentage available is below 2.5 per cent,the report found.
Stamp duty is a huge financial impost on buyers
REIA President Adrian Kelly said stamp duty remains aprohibitive tax for all buyers, adding tens of thousands of dollars to the purchaseof a home for empty nesters, paying tens of thousands of dollars on a homethey may only need for five years means less properties will be placed on themarket.
Stamp duties as a percentage of average national earningshave jumped over the past decade to 34.3 per cent from 25.1 per cent recordedback in 2012, up almost one third. In Sydney and Melbourne, stamp duties alonecan represent nearly half the average annual income, Mr Kelly said.
Mr Kelly said transfer duties as a percentage of medianproperty prices have jumped in most capital cities over the nine years betweenthe March quarter of 2011 and March 2021 because of rising property prices.
First home buyers are borrowing more to accommodate higherstamp duties and affordability is reducing.
In real terms, at current median income and rising housingprices, had stamp duty remained at the 2012 amount, home buyers would save anaverage nation-wide of $21,000 with Victorians saving a whopping $35,000, orhalf an annual median salary in Australia, Mr Kelly said.
A shortage of real estate
Louis Christopher, Managing Director of SQM Research saidthe study has found there has been an ongoing decline in listings over the pastten years.
The decline in listings has been occurring despite thesteady increases in total dwellings across Australia and even through thevarious housing cycles, Mr Christopher said.
The long-term decline in listings fundamentally representsa shortage of real estate which is contributing factor to the surge in prices.
While there maybe various reasons for this situation, webelieve stamp duty bracket creep is a leading contributor. When transaction costsof transferring properties disproportionately rise compared to dwelling pricesand incomes, (as what we have found) then that must be a massive disincentivefor property owners to move house.
