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Home ownership must not be an unattainable dream

Mar 13, 2018 Home ownership must not be an unattainable dream

Home ownership will be an unattainable dream for most young South Australians unless stamp duty exemptions are introduced, Master Builders SA says.

According to ABS data out today, the number of loans to South Australian first home buyers fell to the lowest amount in nine months. Just 403 first home buyer dwellings were financed in January, the lowest since 350 in April last year.

Low demand has had no impact on prices – the average loan size for first home buyers ($274,800) in January was the second highest on record.

Master Builders SA Chief Executive Ian Markos said the fall in loans to first home buyers came from an already low base compared with other states and urgent action was required.

“During the election campaign we’ve heard a lot of rhetoric about stemming the flow of young South Australians interstate. Quite frankly, talk is cheap - it’s time the major parties backed policies that will actually deliver results.

“We want more young South Australians in their own homes, but $18,000 in stamp duty becomes a $60,000 noose with interest over the course of a mortgage.

“That’s why Master Builders SA continues to push for the elimination of stamp duty for first home buyers on new builds up to the median house price, which was $465,000 for the December 2017 Quarter.

“I’m flabbergasted there has been no commitment to a policy that has been heralded by the ABS as a massive success since being introduced in July by the Liberal Government in New South Wales and the Labor Government in Victoria.

“The rate of first home buyer dwellings financed during the second half of last year compared to the first half of last year was about four times higher in Victoria and nearly seven times higher in New South Wales than South Australia.

“It’s good policy that transcends party lines. On its own abolishing stamp duty is not a magic bullet, but it is an important piece of the puzzle.”

In other concerning news, the number of loans to non-first home buyers plummeted to the lowest amount in four years.

The number of dwellings financed in January was 2665, the lowest number since 2637 in February 2014. The average loan size for non-first home buyers was $309,800 – also the second highest on record.

Overall, the number of home loans issued to South Australia hit its lowest level in two years. There were 3502 properties financed in January this year, 40 fewer than the previous low in January 2016.

Loans issued for the construction of new homes also hit a two-year low of 349 compared to 309 in 2016.

2017: First home buyers – Dwellings financed

 

Victoria

New South Wales

South Australia

Dec 2016

 

 

 

Jan-2017

1851

1028

344

Feb-2017

1889

1105

376

Mar-2017

2296

1463

486

Apr-2017

1850

1169

350

May-2017

2431

1600

491

Jun-2017

2366

1526

517

Jul-2017

2619

1950

439

Aug-2017

3162

2427

491

Sept-2017

3002

2395

456

Oct-2017

3250

2397

459

Nov-2017

3526

2700

574

Dec-2017

3116

2412

470

Jan-2018

2702

1873

403

Total: Jan-Jun

12 683

7891

2564

Total: Jul-Dec

18 675

14 279

2889

Total: 2017

31 358

22 170

5453

Percentage increase in second half of 2017

47.24%

80.95%

12.67%

Source: 5609.0 – Housing Finance, Australia, January 2018. Table 9b: Housing Finance Commitments (Owner Occupation), By Type of Buyer and Loan: State, Original

 

  1. In Victoria, stamp duty for first-home buyers with a dutiable value of not more than $600,000 was abolished for contracts entered into from 1 July 2017. See: https://www.sro.vic.gov.au/news/changes-first-home-owner-grant-and-stamp-duty
  2. In New South Wales, stamp duty was abolished on new and existing homes worth up to $650,000 from 1 July 2017. See: https://www.nsw.gov.au/improving-nsw/projects-and-initiatives/first-home-buyers/

Download a PDF of the Media Release here