FOLLOWING today’s announcement that the budget was expected to be in surplus in 2019-20, property industry bodies are asking the State Government to support the subdued real estate market.
REIWA president Damian Collins said while the WA budget was recovering more quickly than initially thought, due to changes in how Australia’s GST revenue was divided up, innovative thinking by the government was needed to kick start the property market’s recovery.
“Transfer duty (or stamp duty) is the biggest hurdle to home ownership and a significant deterrent for those looking to trade-up or downsize into something more suitable,” he said.
“With West Australians holding onto their properties for longer and less inclined to move, this has resulted in a stagnant property market.”
As a result, he said revenue from transfer duty in WA was at a record low and incentives were clearly needed to give people the confidence to buy and sell property again.
“Revenue from property taxes are expected to be down almost $1 billion across the forward estimates,” he said. “Incentives to help people get in to the property market will actually help the WA Government’s budget position.”
REIWA also called for the government to undertake a state tax review including phasing out transfer duty in favour of a broad-based land tax and transfer duty concessions for seniors over 65 to help them ‘right size’.
Urban Development Institute of Australia (UDIA WA) chief executive Tanya Steinbeck said it was time to support more first-home buyers into home ownership, particularly when the rental vacancy rate was dropping and upward pressure on rents was likely next year.
“While the government has committed to increasing Keystart’s borrowing limit by $421 million, we believe now is the time to seize the opportunity to expand Keystart’s eligibility criteria to support more potential home buyers into the market,” she said.
“Given the tightening of institutional lending criteria and the impact of the banking royal commission, expanding the eligibility criteria at this time will be essential for households to get their foot in the home ownership door.”
While REIWA also previously welcomed the increase to Keystart, Mr Collins said the government should make it easier for all first-home buyers to enter the market.
“REIWA is calling on the WA Government to reintroduce the $3000 First Home Owner Grant (FHOG) for eligible buyers of established properties,” he said.
“As it currently stands, the FHOG unfairly penalises buyers wanting to enter the established market by only providing assistance to those first-time buyers who choose to build.
“A $3000 FHOG for established properties will go a long way towards evening the playing field and well result in more transfer duty revenue for the state.”
Ms Steinbeck said the development industry was also keen to see work on proposed Metronet precincts move forward, so that industry and government could work together to deliver vibrant, affordable homes around new and existing train stations.
However, she said the government needed to be mindful of creating additional cost impacts on industry as a result of initiatives such as DesignWA and the impact it would have on delivering affordable housing within the Metronet precincts.
“While the policy intent of DesignWA is sound and supported, the devil is in the detail in terms of the Apartment Design Policy and the cost implications for implementing the individual design controls,” Ms Steinbeck said.