The new stamp duty concessions for first-home buyers in New South Wales and Victoria took effect on July 1, adding some warmth to otherwise wintry auction market conditions over the weekend.
Across Australia’s seven capital cities, the combined preliminary clearance rate increased to 70.3% this week, up from last week, when the final results saw the clearance rate drop to 66.5%. This was the lowest clearance rate since June 2016, according to CoreLogic.
Melbourne, VIC
In Melbourne, 619 auctions were held over the weekend, with a preliminary clearance rate of 74% recorded, according to the Real Estate Institute of Victoria (REIV). Both figures were up from the same period last year, when 223 homes went to auction and a 70% clearance rate was recorded.
“High auction volumes [in Melbourne] coincided with changes to government policy with new stamp duty concessions now available for first homebuyers purchasing under $750,000,” Gil King, chief executive officer of REIV, told SCHWARTZWILLIAMS.
Effective from July 1, stamp duty for first-home buyers purchasing properties worth less than $600,000 was abolished. Stamp duty concessions were made available for first-home buyers purchasing property valued between $600,000 and $750,000. The exemptions and the concession apply to both new and established homes.
“This weekend saw a record number of homes go under the hammer for the first week of July with more than 615 auctions held - surpassing the previous 2010 record when 591 homes were auctioned,” King said.
Melbourne’s middle ring suburbs dominated, led by Reservoir, with 14 auctions and 12 sales. Hoppers Crossing and Sunbury both recorded 100% clearance rates from six auctions. Meanwhile, the City of Darebin and Moreland recorded the highest volumes over the weekend, with 38 and 34 auctions respectively.
“Strong auction activity was also recorded in Greater Geelong, with 27 auctions held over the week,” Gill said.
Sydney, NSW
The Berejiklian government has scrapped stamp duty for first-home buyers for new and existing homes valued up to $650,000, and delivered stamp duty concessions for first-home buyers for properties valued up to $800,000.
Sydney’s initial clearance rate last week was 72.6%.
“The most interesting statistic to come from the results was not the initial clearance rate but the drop in the median house and unit price from the previous week,” John Cunningham, president of the Real Estate Institute of New South Wales (REINSW), told SCHWARTZWILLIAMS.
Prices were down for the week, according to the Domain Group. Sydney’s median house price fell from $1.5m during the previous week to $1.4m last week. The median unit price fell from $960,000 to $855,000.
“With many first-home buyers holding off, we saw a lot more cheaper properties sell as vendors held off concluding sales until 1 July, which naturally brings down the median price,” Cunningham said.
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