Innovative policies required to kick-start WA property market

 

by Damian Collins – REIWA President         https://reiwa.com.au/

The Western Australian Government released its 2018-19 mid-year budget in the lead up to Christmas, bringing with it some good cheer, as the mid-year review showed the state’s budget position had exceeded expectations.

State Treasurer Ben Wyatt announced WA’s economy was expected to grow by 3% in 2018-19, up from 1.9% in 2017-18.

This improvement is good news for the state and presents the McGowan Government with an opportunity to reinvigorate the real estate sector with some innovative policy initiatives.

While the worst of the market downturn appears to be over, our local market remains subdued. Revenue from transfer duty is at a record low – expected to be down almost $1 billion across the forward estimates – and incentives are clearly needed to give people the confidence to buy and sell property again.

Transfer duty (or stamp duty) remains the biggest hurdle to homeownership and a significant deterrent for those looking to trade up or downsize into something more suitable. With Western Australians holding onto their properties for longer and being less inclined to move, this has resulted in a stagnant property market.

In order to address this issue, the McGowan Government needs to seriously consider undertaking a state tax review. Tax reform is critical to the prosperity of our state, and REIWA would like to see the WA Government set aside funds for a thorough investigation into the economic impacts of phasing out transfer duty in favour of a broad-based land tax.

We would also like to see a transfer duty concession introduced for seniors over the age of 65 to enable them to right-size into more appropriate housing, freeing up more large family homes for Western Australians wanting to trade up.

Although WA retains the largest proportion of first homebuyers in its owner-occupier market out of any state or territory in the country, the volume of first homebuyers in WA has declined in recent years. To help address this issue, we would like to see the WA Government reintroduce the $3,000 First Home Owner Grant (FHOG) for eligible buyers of established properties.

As it currently stands, the FHOG unfairly penalises buyers wanting to enter the established market by only providing assistance to those who chose to build. A 43,000 FHOG for established properties will go a long way to evening the playing field and will result in more transfer revenue for the state.

As the WA economy begins its recovery, it is important the WA Government doesn’t sit on its hands and just wait for the market to turn.

Now is the time to take action and think of new ways to drive the state’s economy forward.

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