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Stamp duty breaks for empty nesters needed to get Perth upgrader market moving
September 9, 2016
A scarcity of properties for sale is creating a major speedbump for upgraders seeking a new home in south western Perth, according to leading real estate firm Raine & Horne.
“There’s a shortage of properties priced between $500,000 and $700,000 available for sale in the Rockingham and Safety Bay areas,” said David Dennett, Property Sales and Marketing Specialist, Raine & Horne Rockingham Beach.
“Yet on the demand side, we’re seeing a spike in the number of upgraders aged between 45 and 55 looking for four and five bedroom homes in this region.
“The trouble is that there are a significant number of empty-nesters who no longer need four and five bedroom homes, yet there are economic and legislative factors at play that are forcing them to stay put.”
These factors include low interest rates coupled with the prospect of paying stamp duty if an ‘empty nester’ couple takes a decision to downsize into a smaller home, according to Paul Curran, Principal of Raine & Horne Rockingham Beach.
“With interest rates so low, many empty-nesters are reticent to do anything that might impact their retirement incomes, while the costs of downsizing either to a smaller property or a different location are too prohibitive thanks to excessive stamp duty charges imposed by state governments, along with legal fees and the other costs associated with moving,” said Mr Curran.
“To rectify this financial imbalance for older, self-funded retirees, the WA government could consider stamp duty tax breaks for older homeowners, who would like to downsize into smaller a principal place of residence.
“In turn, stamp duty breaks for older WA residents will help address some of the current supply constraints that are cramping the real estate plans of upgraders,” said Mr Curran.
“In the meantime, if you own a 4-5 bedroom home in the Rockingham LGA priced between $500,000 and $700,000, this Spring will be an excellent time to sell, as there is a shortage of properties on the market in this price range.”
Moreover, those properties that do list can expect relatively fast sales this Spring, according to Mr Curran.
“To illustrate, Raine & Horne Rockingham Beach recently sold a stunning two storey designer home at 27 Vitesse Approach Shoalwater,[i] for $715,000 in 28 days. This compares very favourably to Perth’s average days on market, which are closer to 2 months[ii],” he said.