Azura Financial | Credit Advisory Services

Property Market Update -August 2021

August 17, 2021

AUGUST RBA UPDATE: CASH RATE | 0.1%

Refinance boom continues..

Continued ultra-low rates are driving the refinancing rise. In June, Australians refinanced a record $26.67 billion worth of home loans in original terms, according to the Australian Bureau of Statistics. Owner occupier loans have seen a +20% YoY change, investors are up +7% with a total of +15% rise.

If you haven’t reviewed your own facilities, time to get on board…

Proposed Stamp Duty Tax Reform

The new stamp duty tax reform proposal involves giving property buyers the choice to pay stamp duty as per the current process, or alternatively elect to pay a smaller annual property tax. This would give purchasers the choice between the existing 4% upfront payment or an ongoing annual payment.

What does this mean for you?

Proposed ongoing payments

For new owner-occupied purchases: one off fee of $400 + 0.3% of the land value. For new investment purchases: $1500 + 1.1% of the land value. Based off Sydney’s average land value of $450k this would be $1780/annum for owner occupied and $6560/annum for investment.

First home buyers

FHB are increasingly entering the property market later in life, with FHB aged under 35 declining from 69% to 55% in the last two decades.

Now, full stamp duty concessions are available for FHB purchasing homes up to $650,000 with partial stamp duty concessions offered up to homes of $800,000.

Removal in stamp will allow purchasers to better maximise their deposit to reach higher purchase prices

Lockdown effect on the property market

Rents rise and vacancies fall over ‘lockdowned July’. Declining vacancies and higher rents continued to characterise capital city rental markets over July, with increased COVID restrictions set to again disrupt activity.

The number of auctions held has been trending lower due to both seasonal factors and the ongoing lockdowns. Despite the slowdown in activity, we are still seeing the trend in the number of auctions held remain above average for this time of the year. In fact, compared with the same week over previous years, mid August was the largest number of auctions held since 2017.

One of the biggest trends of the current property boom is house prices outperforming their unit counterparts by some margin. For example, in Sydney, the median house price for the June quarter was $1.4 million – almost 80% higher than the median unit price, according to Domain’s House Price Report.

However, as affordability constraints start to bite, Sydney’s apartment market is tagging a comeback – at least in some neighbourhoods including: