Housing costs deter downsizing, changing jobs and having children
The soaring cost of stamp duty is making more Australians think twice about major life decisions
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Housing costs, including a five–fold increase in stamp duty in just one generation, are dissuading Australians from rightsizing their homes at different stages of life, changing jobs and having children. A new report by economic research firm e61 Institute found a quarter of Australians under 40 years of age have delayed changing jobs and more than one in five aged 30 to 40 years have put off having children due to the costs of changing homes.
The research is based on a survey of 3,000 Australians conducted last year that asked them a series of questions on their attitudes toward housing. It also found that almost 25 percent of family homeowners aged 50 or older who own properties with more bedrooms than household occupiers are putting off downsizing specifically to avoid the transfer tax.
While the cost of moving encompasses many expenses, the research shows stamp duty is an outsized component that has increased considerably since the early-to-mid 1980s amid property prices rising exponentially. The typical stamp duty bill now equates to an average of five months’ worth of take-home pay.
In Sydney, a median-priced home demands $44,500 in stamp duty, which is a 5.4-fold increase in four decades. Stamp duty in Melbourne is $42,500, which is a 6.1-fold increase and the largest among the cities. In Brisbane, the median property purchase demands $25,900 in stamp duty from investors, which is a 5.5-fold increase. But current concessions for owner-occupiers in Queensland reduce this to $18,700.
The report notes that deterrents to moving hurt people’s wellbeing directly and indirectly.
“The direct costs are about being held back from a better-suited home — like closer to family, work, schools or other amenities, or a more appropriate amount of space,” the report states. “The indirect costs play out in the aggregate. Holding back people from changing jobs can weaken productivity, which can dampen wage growth and bolster inflation. And when people don’t downsize, scarce housing runs short.”
Abolishing stamp duty was the most popular option chosen by respondents when asked about their main priorities for state and territory housing policies.
Dr Nick Garvin, e61 Institute’s research manager, said: “Governments and policymakers must consider the unpopularity of stamp duty, and the indirect impacts stamp duty has on various other parts of the economy and people’s lives.”
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A Denver condo that hit the market earlier this week for $16 million is now the Mile High City’s most expensive listing.
The new listing by far beats the next-priciest home for sale, a condo in a new development that was put on the market at the beginning of the year for about $9.79 million.
The city’s most expensive single-family home is asking just shy of $9 million—the metro area’s priciest single-family homes tend to be in the Cherry Hills Village suburb.
At 7,145 square feet, the newly listed unit is nearly double the size of the one in the new development and more on par with the size of some of Denver’s most expensive single-family homes.
It’s on the top floor of a seven-story mixed-use building that was built in 2008 in the Cherry Creek neighbourhood, one of the most affluent areas of the city.
The last time the three-bedroom apartment sold was before it was even completed, though it’s been owned under a few different LLCs and trusts.
The seller, who Mansion Global wasn’t able to identify, bought the condo from the developer in September 2007 for $4.047 million, records show.
The design of the interiors is European-inspired, with decorative columns, elaborate millwork and ornate built-ins.
Plus, there’s a mahogany-clad study, a formal dining room that seats up to 30 guests and views of mountains and Denver Country Club’s golf course.
A private terrace adds 1,230 square feet of outdoor living space and features a fireplace and a built-in barbecue, according to the listing with Josh Behr of LIV Sotheby’s International Realty.
A representative for Behr didn’t respond to a request for comment.
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