Prices at the affordable end of the property market could rise by up to $18,000 from July in Victoria, when stamp duty concessions for first-home buyers begin, according to a prominent buyer’s agent.
The state government has announced a housing affordability package that will remove stamp duty for first-home buyers for properties up to $600,000, and offer stamp duty concessions for properties worth between $600,000 and $750,000.
But concerns have been raised that putting stamp duty savings in buyers’ pockets could mean they are able to bid more for properties, driving up prices and pushing home ownership further out of reach for those still trying to save a deposit.
WBP Property Group executive chairman Greville Pabst said that given first-home buyers in the state already receive a stamp duty concession of 50 per cent, they would be set to save the remainder from July 1 for properties under $600,000.
He estimates that prices will rise by about 2 to 3 per cent as a result. For a $600,000 property, a 3 per cent rise would add $18,000.
“You give it to them, they’re going to spend it,” he told The Australian.
“And particularly in regional areas … because not only do they get stamp duty savings, there’s also the addition of the grant,” he said, noting that the First Home Owner Grant for new homes will double to $20,000 from mid-year.
The state government also announced plans for an extra 100,000 lots in Melbourne’s growth corridor as part of the package earlier this year.