Brighter Buying

Market update: Stamp Duty, First Home Buyers, and Distressed Sales

by Richard Parker, Sales Manager 28 May 2020

Recent data from Domain shows that predictions of dramatically falling property prices have been side stepped for now with most of our capital cities seeing only slight rises in distressed or forced sale listings.

Domain filtered listings of properties for sale looking for descriptions that included but were not limited to: reduced price, mortgage in possession, urgent sale, motivated vendor, or reduced price, between February and mid-May.
Here in Brissie the number of distressed listings has actually fallen. The saving grace has been the government’s COVID-19 support packages and mortgage holidays allowed by the banks. Although the real challenge is to be seen when this assistance expires.
While distressed sales levels were low all round, tourism regions in Queensland (the Sunshine Coast and the Gold Coast) and resource-driven state economies such as Western Australia have been the hardest hit so far.

There are now no spots left in the first home loan deposit scheme for this financial year.

The National Housing Finance and Investment Corporation released 10,000 first home loan deposit scheme places for the 2019-20 financial year from 1 January 2020.
Up until a few weeks ago there was 1800 spots left but they were snapped up super quick. This shows us there are still lots of keen buyers out there all buying under $475,000
Another 10,000 Scheme places will be available for next financial year from July 2020.

There has been talk of abolishing stamp duty buzzing about over the past few weeks, but how likely is it that a reform will gain momentum?

Federal Treasurer Josh Frydenberg has confirmed that tax reform is being considered in his ministerial statement on the economy, along with many more economy-boosting measures, including increased infrastructure spending, skills programs and industrial relations reforms.
Stamp duty constitutes the state governments main income source. They hugely benefit from generous revenues, during the boom times, but during the downtimes, there’s less certainty for their budgets.
Stamp duty is a discretional tax meaning that you only pay is if you choose to buy property. So, if the decision is made to abolish it, there will likely be an increase in Land Tax and GST.
By removing stamp duty the barrier to enter the property market is also reduced which may increase demand for property and potentially push property prices up.
For now, there are no concrete so we will have to wait and see what happens.
Curious about making a move in the current market? View our current listings for sale or talk to us about selling.