A new report by REIA and SQM Research suggests that excessive stamp duty is dragging down the number of properties on the market
![Rising stamp duty a drag on listings – report](https://cdn-res.keymedia.com/cdn-cgi/image/w=1000,h=600,f=auto/https://cdn-res.keymedia.com/cms/images/us/075/0292_637691484075765300.jpg)
Stamp duty is penalising home buyers and leading to a reduced number of properties on the market, according to a study by the Real Estate Institute of Australia and SQM Research.
The study, Stamp duty: The relationship to Australian housing affordability and supply, found that listings have plummeted across Australia as housing prices and taxes on sales spike.
Total national property listings have been declining steadily over the past year, and currently sit at just over 200,000 – a record low in SQM’s numbers, according to the report. In comparison, between 2011 and 2019, national available listings ranged between 300,000 and 380,000 dwellings.
“As a result, market liquidity has nearly halved,” the report said. “In 2008, up to 4.5 per cent of all residential properties were available for sale at any one point in the market. Today the percentage available is below 2.5 per cent.”
REIA President Adrian Kelly said that stamp duty is a prohibitive tax for all home buyers, adding thousands of dollars to the purchase of a home. For empty-nesters, paying tens of thousands of dollars extra for a home they may only need for five years means fewer properties will be placed on the market, he said.
“Stamp duties as a percentage of average national earnings have jumped over the past decade to 34.3%, from 25.1% recorded back in 2012 – up by almost one-third,” Kelly said. “In Sydney and Melbourne, stamp duties alone can represent nearly half the average national income.”
Kelly said that transfer duties as a percentage of median property prices have risen in most capital cities over the nine years between the March quarter of 2011 and March 2021 because of rising property prices.
Read next: Loan commitments drop in August
“First-home buyers are borrowing more to accommodate higher stamp duties, and affordability is reducing,” Kelly said. “In real terms, at current median income and rising house prices, had stamp duty remained at the 2012 amount, home buyers would save an average nationwide of $21,000, with Victorians saving a whopping $35,000 – or half an annual median salary in Australia.”
The study also found an ongoing decline in listings over the past decade, according to Louis Christopher, managing director of SQM Research.
“The decline in listings has been occurring despite the steady increases in total dwellings across Australia and even through the various housing cycles,” he said. “The long-term decline in listings fundamentally represents a shortage of real estate, which is a 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 we have found, then that must be a massive disincentive for property owners to move house.”