NSW Property Boom Drives Record Stamp Duty Haul
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NSW Property Boom Drives Record Stamp Duty Haul

Although some economists fear the effect of COVID on incoming figures.

By Terry Christodoulou
Thu, Jul 29, 2021 12:05pmGrey Clock < 1 min

As property prices and transaction volumes continue to rise, the NSW government has collected a record $9.7 billion in stamp duty in the last financial year.

A recent record $930 million in stamp duty was collected in June alone – when 21,000 properties changed hands.

However, some economists warn that Sydney’s extended lockdown could diminish one of the state’s most lucrative revenue sources which saw residents pay $7.9 million in stamp duty on the sale of residential properties in the financial year ending June 20, 2021.

Further, NSW collected $1.8 billion in revenue on the sale of commercial properties this year.

It comes as property prices and transaction volumes rise, with Sydney homes surging 15% in the year to June according to data from CoreLogic. National prices rose at the highest annual growth rate in 17 years.

A rise in transaction volumes saw Sydney’s residential auction volumes surge 81% in June quarter, while Melbourne’s tally was boosted to 51% as sellers rushed to take advantage of the buyer’s market.

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House values continued to fall last month, but the pace of decline has slowed, CoreLogic reports.

In signs that the RBA’s aggressive approach to monetary policy is making an impact, CoreLogic’s Home Value Index reveals national dwelling values fell -1.0 percent in November, marking the smallest monthly decline since June.

The drop represents a -7.0 percent decline – or about $53,400 –  since the peak value recorded in April 2022. Research director at CoreLogic, Tim Lawless, said the Sydney and Melbourne markets are leading the way, with the capital cities experiencing the most significant falls. But it’s not all bad news for homeowners.

“Three months ago, Sydney housing values were falling at the monthly rate of -2.3 percent,” he said. “That has now reduced by a full percentage point to a decline of -1.3 percent in November.  In July, Melbourne home values were down -1.5 percent over the month, with the monthly decline almost halving last month to -0.8%.”

The rate of decline has also slowed in the smaller capitals, he said.  

“Potentially we are seeing the initial uncertainty around buying in a higher interest rate environment wearing off, while persistently low advertised stock levels have likely contributed to this trend towards smaller value falls,” Mr Lawless said. “However, it’s fair to say housing risk remains skewed to the downside while interest rates are still rising and household balance sheets become more thinly stretched.” 

The RBA has raised the cash rate from 0.10 in April  to 2.85 in November. The board is due to meet again next week, with most experts still predicting a further increase in the cash rate of 25 basis points despite the fall in house values.

Mr Lawless said if interest rates continue to increase, there is potential for declines to ‘reaccelerate’.

“Next year will be a particular test of serviceability and housing market stability, as the record-low fixed rate terms secured in 2021 start to expire,” Mr Lawless said.

Statistics released by the Australian Bureau of Statistics this week also reveal a slowdown in the rate of inflation last month, as higher mortgage repayments and cost of living pressures bite into household budgets.

However, ABS data reveals ongoing labour shortages and high levels of construction continues to fuel higher prices for new housing, although the rate of price growth eased in September and October. 

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