More than 30,000 houses in Sydney’s inner-city have been sold for less that $2.5 million since the federal government introduced a new stamp duty holiday in November last year.
The stamp duty, which is a one-off fee paid to residents of NSW, Victoria and Queensland, is meant to encourage more people to buy houses and encourage the construction of new houses.
In recent months, the number of houses sold at auction in Sydney has dropped by more than 40 per cent, according to data from Real Estate Australia.
But there are signs the stamp duty is having an impact.
“We are seeing house prices in Sydney start to fall and people start to take advantage of the discount on stamp duty,” said Dr Rebecca Williams, managing director of Real Estate Services at the Sydney Real Estate Institute.
“The people who bought those properties before the stamp is in place have moved on and the stamp has made a difference.”
The rise in prices has been driven by a rise in house prices and interest rates, which are at record lows, Dr Williams said.
“I think the stamp was one of the factors behind the increase in prices,” she said.
Dr Williams said the stamp tax was an important tool for those buyers who were struggling to make ends meet and wanted to buy homes in Sydney.
“If you’re able to do that, then you’re going to be able to pay off your mortgage, you’re likely to be on a good salary and you’re probably going to have the money to live in a house that you can afford,” she added.
Dr Davis, a Melbourne-based property broker, said the holiday would have an impact on the Sydney property market.
“It’s not going to bring back home ownership but it’s certainly a way of making people think twice about buying a property,” he said.
Real Estate Australia’s chief economist, Scott O’Connor, said stamp duty sales in Sydney were also contributing to the decline in house values.
“While stamp duty will not be a cure-all, the tax is a great way of helping to reduce the pressure on the housing market,” Mr O’ Connor said.