Let's assume, despite the evidence to needing the contrary, the line is held that dense, #apartment living is the only way forward for housing supply. What could actually be done, quickly, to boost attractiveness for potential buyers?
🏢To recap, a new, moderate size, modest spec 3-bedroom apartment circa 110m2 needs to sell at: 💵~$1.5m in Melbourne 💵~$1.6m in Brisbane 💵~$2.2m in Sydney to be feasible.
(For context, for roughly half those $, homebuyers can access a greenfield home or middle ring townhouse with more internal space. And ignore that at current interests rates, a household income approaching ~$300k is needed to borrow $1.5m, assuming you have saved the 10% deposit)
✅(Re)Introducing Stamp Duty Concessions on new dwellings could be a big lever to stimulate both demand and supply in this space. Currently, stamp duty/transfer bills are approx.: 💰Melbourne – $86k 💰Brisbane – $71k 💰Sydney – $104k
Remember – double the purchase price = roughly double the duty!
Victoria has stamp duty concessions for FHBs, but only to a $750k purchase price cap, which doesn't work for this product (for simplicity I won't get into "dutiable value" here). In NSW, you pay your stamp duty upfront (at the time of signing the contract), making harder to save.
To SA's credit, they've recently removed stamp duty for FHB no matter what the purchase price👏🏻.
🤔Saving $35k-$50k+ upfront would be a meaningful boost for families who buy into substantially more costly dwellings, in addition to a lower overall loan balance which compounds over 25 years.
🤔And if truly serious about boosting supply of larger apartments, it should apply to all buyers, not just FHBs. 👨👩👧👦👴🏻