An influential property figure has pointed the finger at state governments of being “addicted to the revenue” they receive from stamp duty and fees, resulting in record low listings across the country.
John McGrath this week released the McGrath Report 2020, in which he claimed upgraders in big cities were paying close to $100,000 in fees and “absurdly high stamp duty”.
“If we went back just 20 years for direct comparison, we are now paying an additional $40,000 (inflation-adjusted) or 400 per cent more in real terms,” Mr McGrath said.
“This is ridiculous and penalises almost every single Australian moving around the property ladder as their life circumstances change.”
He said it was the issue no one on either side of politics wanted to talk about.
“With the exception of the ACT Government, which has a plan to phase out stamp duty by 2032, there seems very little appetite by State Governments to find a better way,” he said.
“They seem addicted to the revenue it brings them. As a result, it’s possible that these lower levels of activity will remain for some time.”
Despite this expected continuation of low listings, Mr McGrath did have some positive predictions for the future of real estate.
He said he expected investors and overseas buys to return and regional markets to continue to grow in popularity.
While listings would remain tight in the short term, Mr McGrath predicted a return to more normal levels beyond 12 months, with prices remaining stable on the East Coast and Darwin and Perth to see a positive bounce by 2021.
Some other trends and predictions noted in the McGrath Report 2020 included:
- That the house of the future is not the traditional large, suburban Aussie dream, but a sleek, minimalist dwelling.
- The emergence of a new ‘white-collar FIFO’ worker to have a significant impact on regional property markets.
- A move towards small homes over high-rise apartments.
- An increasing trend toward single-occupancy homes.
The report also shines a spotlight on the property markets in Sydney, Melbourne, Brisbane and Canberra.
It said the Sydney market turned the corner a year earlier than expected, due to the ‘ScoMo effect’, APRA’s easing of lending criteria and interest rate cuts. Home values fell -14.9 per cent from the peak in July 2017 to the trough in May 2019.
Meanwhile, Melbourne’s property market “rebounded in the second half of 2019, with strengthening clearance rates and improved sentiment leading to an uptick in median dwelling prices for the first time since peaking in November 2017,” according to the report.
It said Brisbane was poised for a turnaround with predictions of a 20 per cent jump in house prices – the strongest growth of all capital cities; and Canberra – “the quiet achiever of Australian real estate” – continued to display resilience and consistency in the face of a national property downturn with its fifth consecutive year of house price rises in FY19.
John McGrath’s top suburb picks
Sydney: Breakfast Point, Erskineville, Sandringham, Castle Cove, Kensington
Melbourne: Kensington, Carnegie, Watsonia, Cheltenham, Upwey
Brisbane & Gold Coast: Gordon Park, Oxley, Hendra, Chermside West, Broadbeach Waters
Canberra: Bruce, Theodore, Holder, Strathnairn.