Moving to a new house costs $40k – a major affordability impediment
New research from the Property Council shows that South Australians are paying almost $40,000 when they move to a new house, creating a major impediment to the efficient use of the state’s housing supply.
“The biggest cost of moving is stamp duty which you have to pay if you are upsizing or downsizing,” said Property Council SA Executive Director Daniel Gannon.
“Then when you include removalists, conveyancing fees, bank fees and real estate commissions, the figure becomes substantial.
“The problem with high transaction costs is that it discourages the efficient use of housing stock – it’s another reason we have an issue in our major cities with housing affordability.”
“With the transaction costs of selling being almost $40,000 in Adelaide, we can assume there are tens of thousands of family homes not in the market simply because of the transaction costs,” he said.
“In South Australia, for example, stamp duty has increased by 480% since 1995 for the average property, and we’re seeing similar lifts elsewhere.
“If the State Government is serious about housing affordability, they can start with stamp duty.
“In our major cities, we have tens of thousands of older couples who see no financial reason to downsize. In so many of these properties, instead of a family occupying a three or four-bedroom residence, it is just one or two people.”
Research undertaken for the Property Council by Deloitte Access Economics has found that Australia would witness an additional 340,000 property transactions each year without stamp duty.
“We know the State Budget can’t afford such a step in isolation, but it does highlight how stamp duties and other fees inhibit the efficient use of housing,” said Mr Gannon.
“South Australians currently hold their property for an average of 13 years, but the removal of stamp duty would see that fall to eight years.”
Property is South Australia’s largest private sector employer and biggest industry, accounting for 10.8% of the state’s economic activity (or $10.5 billion).
It builds prosperity by paying $4.4 billion in wages and salaries – one in six people draw their wage directly or indirectly from property – and one million South Australians have a stake in property through their super funds.
Property is the largest single industry contributor paying 56.6% of state taxes, local government rates, fees and charges.