Record February Stamp Duty Gains For NSW
The 2020/2021 financial year is set to be the biggest on record for stamp duty revenue in NSW.
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The well-documented boom in property prices has driven stamp duty revenue for the NSW government to unprecedented levels ahead of a property tax reform.
February stamp duty revenue for NSW reached a record $816 million, according to state government figures, smashing the previous high of $626 million 2017.
Auction data over the past few weeks has seen the median house price sold at auction reach record highs, with sales volumes increasing steadily.
February 2021 saw 16,941 property transactions in NSW, with average stamp duty paid just over $48,000.
The 2020/2021 financial year is set to deliver the highest annual stamp duty return for the NSW government since the 2016/2017 financial year, which accrued $9.6 billion.
In the eight months to the end of February, NSW had paid $5.6 billion in stamp duty across commercial and residential property.
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Mortgage holders should brace themselves for more pain as the Reserve Bank of Australia board prepares to meet tomorrow for the first time this year.
Most economists and the major banks are predicting a rise of 25 basis points will be announced, although the Commonwealth Bank suggests that the RBA may take the unusual step of a 40 basis point rise to bring the interest rate up to a more conventional 3.5 percent. This would allow the RBA to step back from further rate rises for the next few months as it assesses the impact of tightening monetary policy on the economy.
The decision by the RBA board to make consecutive rate rises since April last year is an attempt to wrestle inflation down to a more manageable 3 or 4 percent. The Australian Bureau of Statistics reports that the inflation rate rose to 7.8 percent over the December quarter, the highest it has been since 1990, reflected in higher prices for food, fuel and construction.
Higher interest rates have coincided with falling home values, which Ray White chief economist Nerida Conisbee says are down 6.1 percent in capital cities since peaking in March 2022. The pain has been greatest in Sydney, where prices have dropped 10.8 percent since February last year. Melbourne and Canberra recorded similar, albeit smaller falls, while capitals like Adelaide, which saw property prices fall 1.8 percent, are less affected.
Although prices may continue to decline, Ms Conisbee (below) said there are signs the pace is slowing and that inflation has peaked.
“December inflation came in at 7.8 per cent with construction, travel and electricity costs being the biggest drivers. It is likely that we are now at peak,” Ms Conisbee said.
“Many of the drivers of high prices are starting to be resolved. Shipping costs are now down almost 90 per cent from their October 2021 peak (as measured by the Baltic Dry Index), while crude oil prices have almost halved from March 2022. China is back open and international migration has started up again.
“Even construction costs look like they are close to plateau. Importantly, US inflation has pulled back from its peak of 9.1 per cent in June to 6.5 per cent in December, with many of the drivers of inflation in this country similar to Australia.”
The Victorian capital’s top-grossing transactions.
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