Increased property price caps for first-home-buyer stamp duty relief coming to an end

Time is running out for first-home buyers looking to avoid paying stamp duty on new homes worth up to $800,000, with the expanded measure set to expire this week.

First-home buyers have until July 31 to save more than $31,000 on stamp duty fees for new homes in New South Wales, with a temporary extension of stamp duty relief scheduled to end this month.

The increased price caps, announced last July to support the construction industry and first-home-buyer activity, waived or reduced the duty bill for more than 7500 first-home buyers, government figures show.

As of August 1, the property price cap for a stamp duty exemption will drop back from $800,000 to $650,000, while the price cut-off for concessions will also drop from $1 million to $800,000.

Price thresholds for stamp-duty relief on vacant land will also pull back, dropping from $400,000 to $350,000 for an exemption, with concessions to cut out at $450,000, down from the increased cap of $500,000.

The fast-approaching deadline has first-home buyers looking to lock in purchases before the end of July, developers say, though they’ve seen nowhere near the rush seen in the final weeks of the HomeBuilder scheme.

“We’re seeing a little bit more urgency on certain deals,” said ALAND sales director Mark Bernberg. “[But] is it the same stampede we saw at the end of HomeBuilder? Definitely not. “If [first-home buyers] wait one more week you do have to pay more, [so] you really are saving. But the fact of the matter is that, with HomeBuilder, it was a cash contribution coming back into your account and that is always more powerful than an incentive of not having to pay [tax].”

Mr Bernberg said many first-home buyers his company spoke to had been unaware of the looming changes, but noted that many of its western Sydney properties would still be eligible for duty relief under the lower price caps.

“If you went further up the food chain, you probably would find it’s pushed more sales forward,” he said.

Almost 41,000 first-home buyers were granted stamp duty exemptions or concessions over the 10 months to May, the latest government figures show, up about 40 per cent on the previous year, as first-home buyer activity surged. Almost one in five of these exemptions and concessions were only possible under the increased price caps.

CDMA Australia sales and marketing manager Kevin Chen said enquiries had picked up during lockdown, with some first-home buyers wanting to lock in purchases before the changes.

“They are looking for something they can move into quickly – large size units or townhouses. First-home-buyer stamp duty concessions, of course, have helped and driven a sense of FOMO,” he said.

Mr Chen said an extension of the increased price caps would have helped more first-home buyers into the market, but stamp duty reform would have had the most meaningful impact.

The past year has seen a surge in property prices and first-home-buyer and home-building activity, off the back of record-low interest rates, the federal government’s HomeBuilder grant and the First Home Loan Deposit Scheme.

However first-home-buyer volumes have declined over the past few months, and building and renovation activity was recently brought to a halt, having been banned until July 30 during Sydney’s lockdown.

Cameron Leggatt, executive general manager of development at Frasers Property Australia, said incentives had brought forward first-home-buyer activity, resulting in a pullback in more recent months.

“I could see why the government would have seen the momentum in the market and thought it was a good time to pull [the stamp duty relief price caps] back,” he said “[But now we are back in lockdown] the next few weeks … will probably determine if something like this is still required.”

While there was still good enquiry for first-home buyers, Mr Leggatt said, Frasers had seen little rush to get in before the June 31 deadline – not like it saw with HomeBuilder.

NSW Treasurer Dominic Perrottet said the temporary increase to the price cap ensured confidence was maintained in the property and construction sectors at a critical time.

He said the government recognised the significant burden that stamp duty represented for first home-buyers, which is one of the reasons why it had proposed reform to the property tax system.


More than half a million households able to green their home with ultra-low interest loan

More than half a million home owners will soon have an opportunity to make their homes more energy-efficient, as locked-down residents face bill shock in the winter chill.

The Commonwealth Bank is offering ultra-low interest green loans for home energy efficiency upgrades, extending the program to 600,000 home loan customers after a pilot earlier this year.

It will allow customers to purchase and install up to $20,000 worth of clean energy products, from solar panels to batteries, through a secured fixed rate of 0.99 per cent over 10 years. It will not attract any establishment or monthly loan service fees, and customers will not be penalised for early repayment.

Just under a thousand home owners took up the pilot scheme in February, funding almost $4 million in renewable energy upgrades.

NSW led the uptake, with households in Rouse Hill topping the list.

It was followed by Trinity Beach, Queensland and Bonython in the ACT.

Almost nine in 10 households chose to install solar panels and 10 per cent installed solar and batteries. Just 4 per cent installed batteries only.

The introduction of another green loan by one of the big four banks would help normalise sustainability in homes, said Davina Rooney, Green Building Council of Australia chief executive.

“It will lead to substantial energy savings for those customers, it will lead to huge environmental savings, and it starts to normalise this change across the home’s space,” Ms Rooney said.

But it also sent a broader message to the housing market and policymakers that people were voting with their wallets on renewable energy within their own homes, Ms Rooney said.

“As many home owners are locked up, they discover just how uncomfortable their homes are and how expensive they are to run.

“So, we need to lean into better homes for all Australians, whether that is greening existing homes or working volume builders to get more sustainable products in the new home space.”

Commonwealth Bank of Australia would be funding $12 billion worth of sustainable housing upgrades if there were a 100 per cent take-up, which was a “hugely important” investment, said Daniel Gocher, executive director of the Australasian Centre for Corporate Responsibility.

“You can pretty much reduce your personal carbon footprint to zero. If you have a battery, you essentially go off-grid for most of the year,” Mr Gocher said.

If home owners installed only solar panels, it would cut down energy bills as well as reduce electricity prices, he said.

“If you’re washing through the day, the things that are most emissions-intensive, your washing, your drying, you can cut down your bills by a large amount.”

“It has a massive impact on the grid. [Given] what we’ve seen in the past couple of years, we’re leading the world in investment in rooftop solar.

“Everyone benefits from those lower electricity prices, and everyone benefits from less pollution.”

Whether it is to save money or help contribute to saving the environment, Commonwealth Bank of Australia’s retail banking group executive Angus Sullivan said customers were keen to take advantage of the loan.

“There is a bit of a process of engagement and learning for customers before they take it up. It’s a very good value offer of credit.

“Spend money on whatever [renewable technology] it is, and you will see the benefits month-to-month.”


The homes that are selling during Sydney’s lockdown

Realistic homeowners are selling their Sydney properties to eager and qualified buyers well above price guides and reserves, despite the city’s ongoing lockdown.

While some vendors are not letting extended restrictions ruin their scheduled auction day and are forging ahead with an online sell-off, other sellers are bringing it forward by up to a fortnight to capitalise on buyer urgency and even selling prior to ink a deal as soon as possible.

In Greater Sydney, including the Blue Mountains, Central Coast, Wollongong and Shellharbour, or the Orange, Blayney or Cabonne local government areas, auctions can only be held online and inspections are by private appointment one-on-one only, said a NSW Health spokesperson.

The restrictions have left agents spending hours opening homes for individual inspections, but they are seeing more quality buyers who are pre-approved and highly motivated to buy property.

On the northern beaches, a six-bedroom house at 132D Irrubel Road, Newport, sold for $3.4 million to a local downsizer after strong interest from multiple parties.

The idyllic home that sits in a private rainforest began as an auction campaign but converted to a private treaty sale with a price guide of $3.2 million to $3.4 million as the lockdown hit.

Raine & Horne Mona Vale’s Ben Spackman said interest ramped up once the auction was called off.

“Two local buyers pushed it to the top of the price guide. The market is super buoyant. We need more stock,” Mr Spackman said.

The property last sold for $1.65 million in 2014, records show.

On the upper north shore, a four-bedroom house at 2 Kenwyn Close, St Ives, sold for $2.917 million, about $317,000 above reserve, after a marathon online auction.

The sale lasted for more than an hour and saw 113 bids placed by almost all 11 registered parties.

Atlas Upper North Shore’s Stephanie Hearne said every buyer was well prepared before the online auction began.

“The market is crazy. I have never worked so hard in my life, especially in July,” Ms Hearne said. “If owners are hesitating on putting their homes on the market, don’t. Buyers are champing at the bit.”

She said there was a sense of urgency from qualified buyers who were pre-approved and ready to transact.

In Wahroonga, a deceased estate at 28 Grosvenor Street sold for $3.201 million – $201,000 above its reserve.

Bidding opened at $2.8 million – above the $2.75 million price guide – as seven of the 13 registered parties pushed up the price on the four-bedroom Federation house.

All the interested buyers were upsizers. A young family upgrading from a three-bedroom Artarmon unit walked away with the keys.

McGrath Wahroonga’s Alex Mintorn said the lockdown had increased the sense of urgency among buyers and seen sellers drop off.

“Anything that is on the market has the full benefit of competition. The market is heavily in favour of the seller getting a good price,” he said.

The property last traded for $700,000 in 1998, records show.

In the inner west, a four-bedroom Victorian terrace at 84 Albion Street, Annandale, sold for $3.55 million three weeks prior to auction to an inner-city couple.

The property was guided at $3 million to $3.2 million and the vendors decided to move on the offer as they had just bought another property in Hunters Hill last week.

BresicWhitney Glebe’s Chris Nunn said only qualified buyers were coming through properties due to the one-on-one lockdown restriction.

“If an owner is overly opportunistic or above the market then they might consider whether this is the right environment for them to trade out of their property,” he said.

“But owners who are realistic and reasonable should have no apprehension of going into this market because there are still plenty of buyers who want to buy.”

The property sold for $2.426 million in 2015, records show.


Building more affordable and social housing keeps the state safe and saves the public purse: experts

Governments have been urged to ramp up the construction of thousands of social and affordable homes in NSW to keep the state safe and save the public purse as the pandemic rips through communities that are at most risk of homelessness, experts have warned.

The latest outbreak in Sydney has left the local governments areas of Canterbury-Bankstown, Fairfield and Liverpool locked down Since Sunday with the harshest of restrictions in a bid to stop the virus in its tracks.

These same pockets of the city also face some of the highest rates of overcrowding – a form of homelessness – and are in desperate need of thousands of extra social and affordable homes.

Across the state, there is a 135,000 shortfall in social and affordable housing with almost 15 per cent – or more than 20,000 additional homes – of the total needed in these lockdown areas.

But no new funding to boost the critical shortage of social housing in these areas was allocated in this year’s state and federal budgets.

Health and housing experts said the latest outbreak highlighted the importance of secure and affordable homes to secure better health outcomes for individual families and the broader community.

“What the pandemic has made clear is the community impact. The disadvantage has a broader community impact,” said Kate Colvin, spokeswoman for the Everybody’s Home campaign, which aims to end homelessness and support vulnerable households, first-home buyers and renters. “The fact that we’ve not provided that [social and affordable housing] means not everybody has a home where they have enough space, and [that] is a risk for the health of the whole community. The pandemic has awakened a great sense of community care and responsibility, but it hasn’t translated to the government,” Ms Colvin said.

“There is a real question: if we don’t do this now, when are we going to do this?”.

Last year’s multimillion-dollar emergency funding for rough sleepers showed the government could fix the problem, said Nicola Brackertz of the Australian Housing and Urban Research Institute.

“It’s brought it more to the forefront of the minds of policymakers who have suddenly thought ‘oh we better do something’,” Dr Brackertz said.

“The programs implemented suddenly housed people on the street when previously governments have said ‘this is too expensive, this is an intractable problem’. In most places, they were able to put rough sleepers in accommodation,” she said.

“For me, what it has shown is that it is definitely possible to address this problem if there is the political will to do so … It’s definitely time to call for that.”

By building 5000 social and affordable homes each year, the reduction in homelessness would save NSW could save $13 million a year, economic modelling for Community Housing Industry Association NSW found. That saving would increase to $52 million a year after four years.

The NSW government spent an extra $12 million to find temporary accommodation for those at risk of or experiencing homelessness in the latest lockdown.

Researchers worldwide have found that providing housing to vulnerable communities generates huge healthcare savings, with costs dropping by 85 per cent in one Californian study.

But the construction of these homes would help save the public purse and generate jobs and income for the economy, said Katherine McKernan, chief executive of Homelessness NSW.

The same economic modelling found it would generate 16,200 construction jobs each year and bring with it $5.2 billion in additional economic activity every year.

“What we’re seeing with the spread of increasing cases in particular areas in Sydney … is completely unsurprising because we are well aware of the housing need in that area,” Ms McKernan said.

“It’s really important we look at housing alongside other infrastructure elements. We need to see extensive investment in social housing, so we see families are able to stay healthy and safe.

“We’ve asked for many years. If you invest in the social housing needed, you’re also generating the economy as well. If not last year or this year, when?”


Days on market fall, with biggest drops seen across regional Australia, new figures show

Weeks have been slashed off the time it takes to sell a home, with the sharpest drops seen in regional markets where strong demand outweighs the limited supply of homes for sale.

Less than a week stands between the time taken to sell a home in a capital city and in regional Australia, with the median days on market sitting at 27 days across the combined capital cities over the three months to June, and 33 days across combined regional markets, CoreLogic figures show.

That is down from 43 days in the capitals and 62 days in regional markets over the same three-month period the previous year, during part of which the nation was in lockdown. Days on market have more than halved in regional NSW, Western Australia and South Australia in the year since.

“It’s really a reflection of how tight the market is,” said CoreLogic research director Tim Lawless.”The total number of homes for sale is still tracking about 24 per cent below the five-year average, but transaction activity is up … the result is, we are seeing homes selling very quickly with little in the way of discounting [which is at a median of 2.7 per cent nationally].”

“This is a seller’s market; buyers don’t have a lot of choices and probably feel quite rushed in their decision making … they fear if they take too long, chances are the property will get taken out from under them.” Homes are selling faster in regional Victoria than they are in Melbourne, at medians of 28 and 30 days respectively, while four days separate Sydney (26 days) and regional NSW (30) and 10 days separate Brisbane (25) and regional Queensland (35). However, the time taken to sell has in both capital cities and regional areas has crept up slightly since the lows seen earlier this year, Mr Lawless said, with the median days on market across the capitals bottoming out at 22 days over the three months to April – its lowest level since at least 2006.

“It has come up a little bit, suggesting that things have cooled down a little bit and in … some cities like Sydney and Melbourne we’ve seen a little bit of a surge in new listings come on the market, outside of lockdowns, which is helping to slowly rebalance the market,” he said.

Mr Lawless added seasonality could also be playing a role – with days on market typically climbing over the cooler winter months – as could the latest lockdowns.

It comes as dwelling values across the country climbed 13.5 per cent over the year to June, bringing the value of Australia’s residential real estate to a whopping $8.6 trillion, CoreLogic figures show.

Values jumped 6.1 per cent over the past quarter alone to a median of $645,454, with the biggest jump in Sydney where dwelling values jumped 8.2 per cent.

Even amid the harbour city’s current lockdown, values have shown little sign of slowing down, Mr Lawless said. They were up 1 per cent over the first 13 days of July and rose 2.6 per cent over June.

“If we look across the five major capital cities that is still the strongest rate of growth,” he said. “To the testament of history, we are still seeing values holding very much resilient … and auction clearance rate holding up pretty well as well, still up above 70 per cent.

“Through circuit-breaker lockdowns values have been very resilient, even though we’ve seen that transaction activity and listing activity have been more volatile.”

However, the longer the lockdown, the more risk there would be of house prices falling, Mr Lawless said, due to the disruption caused to the economy and consumer sentiment.

For now, though, the pullback in new listings seen in Sydney in recent weeks – as vendors opt to postpone plans to sell until after the lockdown – will create a tighter market in the short term, he said. Melbourne saw a similar trend during its most recent lockdown, with new listings plummeting, though they have since surged back in recent weeks.

“Sydney is now trending down in total listings, quite quickly, whereas Melbourne is now trending higher and about 8 per cent above average. It’s the one city where total listing numbers are higher, which suggests that’s where we’ll see a rebalancing between buyers and sellers.”

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