The Real Estate Institute of Western Australia (REIWA) has released a plan that outlines several ways the industry can work to ensure its vitality long-term.
We take a closer look.
The current state of play in Perth real estate
As we wrote recently, despite the worries we all had as the pandemic hit in March, Real Estate Institute of Western Australia (REIWA) president Damian Collins said the median house price in WA had largely held firm throughout the coronavirus period.
And the Perth rental market has held up well compared to the rest of the country, with CoreLogic data showing it to be the only capital city in Australia to record growth in rents over April, and the vacancy rate dropping to just 1.3% in August with a median rent of $360.
Planning for a prosperous market post COVID-19
Recognising that the property industry needs stimulus to attract buyers and investors back into the market, the Real Estate Institute of Western Australia (REIWA) has launched a ‘Plan for Prosperity Post COVID19’, comprising a number of recommendations to government to boost the economy and help buyers enter the market.
Help for first home buyers
In 2019, the number of first home buyers reached its lowest levels since 2011, at just 13,653, and of those, 8.285 were for established properties and 5,368 were new homes.
REIWA is calling for the government to reintroduce the $7,000 first home owner grant for the purchase of existing dwellings. This will give first homeowners more purchasing power and encourage more buyers, resulting in more stamp duty from the trade-up market too.
Help for seniors
REIWA is also asking for the introduction of a $10,000 stamp duty concession for seniors over the age of 65 to encourage appropriate ‘right-sizing’.
The aim is to improve affordability and also household’s ability to make housing decisions in line with their lifestyle choices, changing needs or economic realities.
Help for small businesses
WA is one of three states or territories that continues to collect stamp duty on a business purchase. A buyer who purchases a business to a value of $5 million will be liable for $251,415 in stamp duty.
REIWA is asking the government to remove this stamp duty altogether, which would help both those who want to buy small businesses and those who need to sell.
Given the many challenges to small businesses brought about by the pandemic, this could help some small businesses stay viable, allowing them to allocate that money elsewhere, such as staffing.
Help for all buyers and investors
REIWA is calling on the WA Government to boost WA’s economy by reforming stamp duty, committing to a full state tax review and feasibility study of a two-stream revenue collection approach.
A two-stream approach would allow buyers to decide whether to pay the stamp duty upfront, or whether to opt-in for an annual fee for the duration of ownership. A reduction in upfront costs would encourage more transactions with a significant flow-on effect to economic activity.
Support for diverse housing and job creation
The current 75 per cent stamp duty rebate for buyers of off-the-plan and under construction apartments has been vital in ensuring an ongoing pipeline of projects, which in turn guarantees a steady supply of diverse housing and jobs for West Australians.
REIWA wants this stamp duty rebate for off-the-plan purchases to be formalised, making it permanent, and keeping it in line with house-and-land packages that are taxed solely on the value of the land. This change would likely encourage more first homeowner and investor activity.
What do Rentwest think?
At Rentwest, we support REIWA’s plan to attract buyers and investors back into the market.
The property market in Perth has great fundamentals for investors. It’s affordable, with low vacancy rates and stable rents.
The Perth property market has been on the brink of growth for some time now, and the incentives suggested by REIWA could be an important ingredient in kick starting it in a post-pandemic world.
You can read REIWA’s full submission made to the WA Government here.
If you’re looking to invest in Perth’s property market contact our specialised team of property managers today.