Rates On Hold With Stamp Duty Changes Soon To Kick In
Tue June 06, 2017
June 6, 2017: The financial year will end with interest rates steady at 1.5% as the housing industry awaits the impact of changes to stamp duty for first home buyers in NSW.
Leanne Pilkington, Laing+Simmons Managing Director, says the move to leave rates on hold – again – was the right one, given the broader economic picture.
“The latest data suggests subdued house price easing is occurring in major markets, there are conflicting opinions on the near-term growth prospects of the economy, the crackdown on interest-only loans seems to have caused investors to back off, and the threat of the major banks adjusting rates to counter the bank levy cannot be entirely discounted,” she says.
“A steady cash rate is the constant among this broader uncertainty.
“This past financial year has been a turning point of sorts. The unsustainable growth in house prices has come to a natural end, without the sharp downturn many predicted.
“We see a more subdued price growth environment in the short term though the recent changes to stamp duty for first home buyers may have an impact on the prices some people are willing to pay.”
Ms Pilkington said the reforms to stamp duty announced last week are a step in the right direction – but leave some important areas unaddressed.
"Stamp duty has for many years been an obvious lever available to the NSW Government to address affordability. The concessions available for first home buyers are a start, but by no means an end, to properly tackle this issue,” Ms Pilkington says.
"There's no single solution to affordability and disappointingly, these reforms don't address the other end of the market. Concessions for existing home owners in established housing, particularly retirees, would have a dramatic impact on the availability of supply. As it stands, stamp duty remains a hurdle to discourage people from downsizing.
"From an industry perspective, a complete overhaul of stamp duty remains a high priority,” she says.
For further information please contact:
Leanne Pilkington Stephen Naylor
Managing Director Account Director
Laing+Simmons Wise McBaron Communication
(02) 9291 7000 (02) 9279 4770