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Market Update


Proposed stamp duty changes in NSW

The NSW Treasurer has proposed a massive overhaul of the way houses are taxed, with oppressive stamp duties to be potentially removed.

  • Based on Sydney’s median house price of  $1,154,406, buyers currently pay approximately $46,176 to the Government
  • Under the new proposed scheme, homebuyers could opt to pay an annual tax based on their land value instead
  • Removing stamp duty will reduce the financial burden on purchasers and ultimately result in a more fluid housing market

We believe stamp duty is an inefficient tax as it discourages property purchases and sales, and therefore locks people into assets that may not perfectly suit their needs. e.g. people downsizing, moving to new areas for employment opportunities, or wanting to access their equity for investment opportunities. etc.

We think this is a really positive step towards constructive tax reform, however before we have all the details, it’s hard to determine who the winners and losers will be. We will keep you up to date with information as it develops.

Road to recovery

With confidence beginning to build in our economy and the property market from the beginning of the year, there are signs that we have now turned the corner following a relatively mild downturn.

The country has registered its first national capital gain across all metro and non-metro areas. As of this week:

  • The average clearance rate of auctions around the state was at a high of 75% in mid-November, with buyers chasing property in Sydney and Melbourne dominating the spring market
  • Based on CoreLogic’s numbers, Melbourne’s dwelling values have now climbed 0.22%, outperforming Sydney, Brisbane, and Adelaide. Although numbers are still low, buyers are active again in the market following lockdown
  • As of September, the amount of first home buyer loans approved was 45.5% higher than the same month last year

Change in view on property prices

Interestingly, most banks have done a full u-turn on their dire housing market predictions… including, NAB, ANZ, HSBC, and more…

In May 2020, NAB told its customers that “dwelling prices will likely see significant falls over the next 12-18 months”. “We expect house prices across the capital cities to fall by 10-15%… “

However, last week NAB changed its view completely, stating that “we have changed our view on property prices for the next year and now expect rises of around 5% over 2021 and 6% over 2022 – with house price growth likely to be stronger than the apartment segment.”

Food for thought…

More banks slash rates to lowest in history

Most lenders have now announced changes to their interest rates for home loans and small business loans following the RBA’s decision to cut rates to an all-time low of 0.10%.
The official drop in cash rate, which isn’t expected to increase for at least three years, is a measure to address the high rate of unemployment and the overall COVID-19 recovery for Australians.

What do the changes mean for homeowners?

Although no major lender has announced changes to their variable rates, the following changes to fixed rates have been announced this week, making it more affordable than ever to borrow. See below for current owner-occupied, principal and interest rate cuts:

lending grid azura financial

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