Real Estate Institute of Western Australia President Rob Druitt has called on the State Government to extend the stamp duty cuts expected in this week's budget to homebuyers immediately, rather than after June 30.
Real Estate Institute of Western Australia President Rob Druitt has called on the State Government to extend the stamp duty cuts expected in this week's budget to homebuyers immediately, rather than after June 30.
Mr Druitt said Treasurer Eric Ripper's announcement earlier this year that he was considering stamp duty cuts had resulted in a downturn of home sales while buyers waited to see what would happen.
"As a consequence, sales turnover for first home buyers has been reduced to a trickle and this is impacting right across the housing sector and creating pent up demand," Mr Druitt said.
"The government has created this artificial delay with ill-timed announcements, and it really should take some urgent steps to ease this pressure."
The full text of a REIWA announcement is pasted below
The Real Estate Institute of Western Australia has urged the State Government to allow homebuyers making an offer to purchase between 11 May and 30 June, to be eligible for the stamp duty cuts expected in this week's budget.
REIWA President Rob Druitt said while stamp duty cuts on housing were widely tipped to be a key part of the budget delivered this Thursday, tax reforms did not usually take effect until the beginning of the next financial year.
"The housing market is stalling in places because hesitant buyers are waiting for anticipated tax relief in the May budget. This will only get worse if stamp duty cuts are officially announced on the day of budget, but not implemented for another seven weeks," Mr Druitt said.
"The public has known for a couple of months that stamp duty relief on houses will likely be a key feature of this budget and as a consequence many homebuyers are holding off to see what happens.
"As a consequence, sales turnover for first home buyers has been reduced to a trickle and this is impacting right across the housing sector and creating pent up demand," Mr Druitt said.
REIWA data shows that sales by first home buyers are down by around 45 per cent on this time last year.
"However, it's no longer just first home buyers who are holding back, it's most buyers. Even people wanting to sell their existing home and to upgrade to something better are waiting for the results of the May budget.
"The government has created this artificial delay with ill-timed announcements, and it really should take some urgent steps to ease this pressure.
"The danger for government is that if first homebuyers come stampeding back into the market on 1 July after months of holding back, the result will create significant competition and likely push up prices at the bottom end of the market.
"If the government is hoping to win public support with stamp duty cuts, it will quickly lose that support if homebuyers find the savings they make through stamp duty relief are lost to price increases engineered by the governments' pent up demand," Mr Druitt said.
Mr Druitt said any stamp duty reforms contained within the May budget should apply from midnight on May 10th and not be held off for another 51 days.
