A new report raised concerns on the skyrocketing transaction costs faced by property buyers in Australia's biggest cities.
Property buyers pay as much as $100,000 in fees and stamp duty alone, according to the McGrath Report 2020.
Also read: Stamp Duty Triples In Capital Cities
The higher transaction costs, along with economic uncertainty, could potentially further worsen the record-low listings in most city markets, said study author John McGrath.
"Upgraders in big cities are paying close to $100,000 in fees and absurdly high stamp duty. If we went back just 20 years for direct comparison, we are now paying an additional $40,000, or 400% more in real terms," he said.
Little effort from state governments
The Australian Capital Territory (ACT) plans to phase out stamp duty starting 2032. However, McGrath said there seems to be "little appetite" by other state governments to solve this pressing concern.
"They seem addicted to the revenue it brings them. As a result, it's possible that these lower levels of activity will remain for some time," he said.
Also read: Should Stamp Duty Be Abolished In QLD?
Tight market as supply thins out
McGrath said the housing market could see prices grow as supply remains tight and demand rises due to low interest rates and easier credit access.
"Less for sale generally means better prices. This may indeed keep us in the solid territory until we see the next sales cycle begin," he said.
While Sydney and Melbourne continue to witness recovery due to the low interest-rate environment, McGrath said Brisbane is poised to see the strongest growth of all capital cities. He said prices in Brisbane could jump as much as 20%.
