Spring welcomes lower listing volumes
The decline - and apparent shortage - of property listings is the biggest talking point of the 2016 spring selling season.
Last Saturday's 640 Sydney auction tally was 35 percent lower than the same weekend in October last year.
The 20,000 total Sydney private treaty listings are down six percent with the 7,500 new listing component some 17 percent less than last October.
Home owners aren't wanting to sell while there is little on the market to buy.
Despite home values rising, transaction volumes languish well below their previous highs right across the country, CoreLogic research recently noted.
CoreLogic estimates 339,000 houses and 132,000 units sold in Australia over the year to April, including 208,000 houses and 96,000 units across the capitals.
The combined 471,000 annual property sales was down almost 26% from the 633,000 transactions over the 12 months to May 2002, the last sales volume peak year.
CoreLogic research head Tim Lawless foresees the consequences of property owners less willing to list properties for sale.
"The short supply of housing stock is likely causing some urgency amongst buyers which is contributing to the upwards pressure on dwelling values."
It is increasingly evident that stamp duty has become a major deterrent to doing anything among owners and investors who are all holding their properties for longer.
The basic rate of NSW stamp duty has remained unadjusted for price bracket creep for the past three decades. It was in 1986 when the Unsworth Government budget raised the stamp duty to 4.5 per cent for sales above $300,000, and the rate for $1 million sales and above became 5.5 per cent.
Back then the median Sydney house price was not quite $100,000. It is now $890,000.
The Government estimated the new stamp duty rates in 1896 would add $30 million to revenue.
These days just the anticipated $100 million sale of John Symond’s Point Piper mansion, could recoup at least $6.94 million if the property is sold to an Australian or $10.94 million if sold to a foreign buyer.
NSW transfer duty revenue for 2015-16 was more than $1 billion over-budget at $8.887 billion.
Stamp duty this financial year is tipped to raise $10.6 billion, making it the biggest tax levied by the state government, followed by payroll tax at $8.25 billion, land tax at $3.1 billion and vehicle taxes at $2.5 billion.
Stamp duty overtook payroll tax as the State's largest source of tax revenue back in 1987.
Richardson & Wrench Mosman agent Robert Simeon says stamp duty has become "a massive market hindrance.
"Home owners choose to renovate over gifting the state government ridiculous amounts of monies for nothing."
With fewer sales, but increased property prices, the government currently doesn't have too many concerns about its revenues. But year-on-year growth in transfer duty revenue has varied between negative 32 per cent and positive 39 per cent during the last decade.
The last Budget's Intergenerational Report noted the state-wide economic cost for every million dollars of transfer duty revenue is estimated to be around $800,000.
The deepening paralysis is effecting the NSW economy - especially property related businesses. Estate agents and their agencies are facing an industry-wide shakeup. Ditto valuers, quantity surveyors, and mortgage brokers. Not just the white collar industries as say removalists will find fewer moving jobs in the current stayput environment. Even the village florist who pretty up the interiors at the open for inspections will find business shrinking.
REINSW President John Cunningham said a review of the NSW tax system is necessary immediately, following stamp duty reforms in Western Australia and the Northern Territory.
This article was first published in the Saturday Daily Telegraph.