It also lauds state governments’ housing market support
PEXA Group, the operator of the world’s first digital property exchange platform, has welcomed the Reserve Bank of Australia’s decision to maintain the cash rate at 4.35% following its latest Monetary Policy Board meeting.
PEXA chief economist Julie Toth (pictured above) stated that the rate pause is positive news for current and prospective mortgage holders, who will avoid further pressure on their household incomes from increased loan repayments.
“Evidence from bank spending data and consumer confidence surveys indicate that homeowners with a mortgage remain under intense pressure from stubborn core inflation and high interest rates,” Toth said.
“Looking ahead, this persistent inflation – despite weak GDP growth and household consumption – means the cash rate will not fall until core inflation is more firmly anchored to the 2-3% target band.”
Australia’s housing market stabilised throughout 2023 and has remained resilient into 2024 in terms of sales activity and pricing in most locations. PEXA’s Property Insights Report indicated that residential settlement transaction volumes increased in the first quarter of 2024 compared to the same period in 2023 across mainland states and most price ranges.
Refinancing activity remains high as mortgagees seek to reduce costs. PEXA’s Refinance Index shows that refinancing levels were historically high through early 2024 and have risen since April 2024, about 40% above volumes observed during 2019 and 2020.
Toth noted that property owners and buyers will need to navigate a range of changes to property-related taxes, charges, and grants announced by various state governments for 2024-25.
“We welcome the NSW government’s plan to build 30,000 affordable, social and rental homes on surplus government land,” she said. “Once completed, this will help to boost housing supply, as will an additional 400 new build-to-rent dwellings for essential workers. Additional resources for the Housing Commissioner and a new Rental Taskforce to oversee NSW’s one million residential rental properties will help to improve security of tenure, and affordability, for renters.
“For NSW property investors however, the budget included increases to the foreign purchaser duty surcharge and foreign owner land tax surcharge, for an estimated 20,000 foreign-owned NSW properties, and freezes the tax-free threshold for all properties that are subject to land tax.
“These incremental tax increases may reduce the attractiveness of NSW as a place to invest in property and may reduce the number of homes available for rent in the private sector.”
In Queensland and South Australia, home buyers will receive greater direct assistance from their state governments. Queensland will increase thresholds for stamp duty concessions for first home buyers of properties worth up to $800,000 for a home and $500,000 for vacant land, with the maximum value of the concession also lifted.
South Australia will abolish all stamp duty for first-home buyers, with no maximum property value for the stamp duty exemption or for the state’s first homeowner’s grant, worth $15,000, for purchases after June 6, 2024.
“These announcements in Queensland and South Australia will help first home buyers compete in extremely tight local housing markets and may even attract first home buyers – who are overwhelmingly younger skilled workers – from other states,” Toth said.
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, X (formerly Twitter), and LinkedIn.
