New home building in Australia reaches record high but stamp duty also up
New home building in Australia bounced back in the second quarter of 2015 but overall all home owners are paying more in property tax, new figures show.
The number of detached houses beginning construction held steady at a relatively high level, while a rebound in multi-unit dwelling commencements provided the overall lift to reach the highest level for any quarter on record, according to the figures from the Australian Bureau of Statistics.
The figures show there was a 0.7% increase in detached home commencements while others, predominantly multi-unit dwellings, jumped by 19.2%, driven by a surge in the state of Victoria. The state recorded over 9,000 multi-unit commencements, which is a record high.
In the 12 months to March, almost 205,000 new dwellings were commenced, the first time the 200,000 mark has been breached. According to the Housing Industry Association (HIA) leading indicators suggests that the number of commencements in the June quarter will be even higher.
‘When we get the final result for the 2014/2015 fiscal year it is likely to show more than 210,000 new dwellings were commenced during the year,’ said HIA economist Geordan Murray.
A breakdown of the figures show that new home starts increased by 1.9% in New South Wales, by 18.8% in Victoria, 20.9% in Queensland and by 12% in the Northern Territory. But elsewhere, there were sizable declines, most notably in South Australia where the strong result in the December quarter was reversed by an 18% fall. They were down 4.8% in Western Australia, 14.7% in Tasmania and down 14.4% in ACT.
However, the HIA is warning that for the whole of the housing market the burden of stamp duty payable on house sales is becoming more of a burden, especially for new builds. Its latest Stamp Duty Watch analysis shows that the property tax has increased across the country.
In New South Wales, Victoria and the Northern Territory, the typical stamp duty bill now amounts to over $20,000. Stamp duty bills have increased particularly sharply in NSW and Victoria since late last year, according to Shane Garrett, HIA senior economist.
‘Clearly, stamp duty is a major impediment to housing affordability. It is a particularly onerous tax on new housing. In many instances stamp duty is paid multiple times as transactions occur during the new dwelling’s life cycle. This is one example of the inequitable tax treatment of new housing relative to existing property,’ he explained.
‘Independent research conducted for HIA last year provided compelling evidence of the benefits to Australian living standards and economic growth from the replacement of stamp duty with more efficient, broad based revenue raising measures,’ he added.
The highest tax on a typical home is in the Northern Territory at $23,128, followed by New South Wales at $22,490, Victoria at $21,790, Western Australia at $17,053, ACT at $16,350, South Australia at $15,080, Tasmania at $8,735 and Queensland at $5,950.