First home buyer numbers drop, stamp duty increases
The number of first home buyer numbers has reduced significantly due to affordability declining in Victoria as a result of rising property prices, shortage of stock and higher state government taxes.
REIV CEO Enzo Raimondo said that it is incumbent on all political parties contesting the election to outline how they will address housing affordability in Victoria and assist first home buyers. In four other Australian states most first home buyers pay no stamp duty; the question is why can’t that happen in Victoria?
“When the First Home Owners Grant was introduced in 2000 it provided buyers with $7000, an amount that went a long way to paying the stamp duty on most homes and, in the case of 30 suburbs, left buyers with extra to go towards the home purchase.
“Ten years later the failure of the state government to control escalating stamp duty bills or increase the grant means that now the grant is little more than a small subsidy on the stamp duty.
“The state government is giving with one hand, taking more with the other and leaving most first home buyers out of pocket.
“According to the ABS, 10 years ago first home buyers represented 28 per cent of the market. A year ago it was 27 per cent and in August this year it had dropped to 17 per cent.
“Ten years ago a first home buyer in Broadmeadows who received the $7000 grant had nearly $5,000 remaining after stamp duty; now they have to pay an extra $6,600. In Box Hill if they purchased a modest unit they would have had $1,200 left over; now they need to pay another $10,870.
“Stamp duty revenue has more than trebled in 10 years and is adding significant financial burdens at a time when buyers can least afford it.
“The answer to improving affordability is reducing stamp duty, building more homes and increasing first home buyer assistance,” Mr Raimondo concluded.
Ten of the 30 suburbs* where recipients of the First Home Owners Grant were left with money to help pay for their home after paying stamp duty:
- Vermont, $240
- Richmond (units), $360
- Box Hill (units), $1,200
- Ferntree Gully, $1,274
- Sunshine, $2,640
- Bayswater, $2,940
- Melton, $3,660
- St Albans, $3,840
- Footscray West (units), $4,620
- Broadmeadows, $4,734
*based on the median price of a home in the September quarter 2000 and stamp duty payable at the time.