• Budget boost calls for policy innovation to drive economy forward

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    REIWA is pleased the WA Mid-Year Budget review has revealed that Western Australia’s economy is expected to grow by three per cent in 2018-19, and has called on the McGowan Government to look at innovative ways to stimulate the state’s economy.

    REIWA President Damian Collins said the improvement in the state’s budget position (up from 1.9 per cent growth in 2017-18) was a welcome development that provided the McGowan Government with a great opportunity to reinvigorate the WA property sector to the benefit of all West Australians.

    “Although the worst of the market downturn appears to be over in WA, our local market remains subdued with the Perth median rent unchanged at $350 per week since April 2017 and the median house price sitting at $515,000, according to reiwa.com data,” Mr Collins said.

    “As the WA budget recovers more quickly than initially thought, due to changes in how Australia’s GST revenue is divided up, we need some innovative thinking by the WA Government to kick start the property market’s recovery. Revenue from transfer duty in WA is at a record low and incentives are clearly needed to give people the confidence to buy and sell property again.

    “Revenue from property taxes are expected to be down almost $1 billion across the forward estimates. Incentives to help people get in to the property market will actually help the WA Government’s budget position.

    “Transfer duty (or stamp duty) is the biggest hurdle to home ownership and a significant deterrent for those looking to trade-up or downsize into something more suitable. With West Australians holding onto their properties for longer and less inclined to move, this has resulted in a stagnant property market.”

    REIWA will continue to call for the WA Government to undertake a state tax review.

    “Tax reform is critical to the prosperity of our state. We would like to see the WA Government set aside funds for a thorough investigation into the economic impacts of phasing out transfer duty in favour of a broad based land tax,” Mr Collins said.

    “We would also like to see a transfer duty concession introduced for seniors over the age of 65 to enable them to right-size into more appropriate housing, freeing up more large family homes for West Australians wanting to trade-up.”

    While WA continues to have the largest proportion of first home buyers in its owner-occupier market, the volume of first home buyers in WA has declined in recent years.

    “REIWA is calling on the WA Government to reintroduce the $3,000 First Home Owner Grant (FHOG) for eligible buyers of established properties. As it currently stands, the FHOG unfairly penalises buyers wanting to enter the established market by only providing assistance to those first time buyers who choose to build,” Mr Collins said.

    “Although housing affordability has improved in WA over the last few years, buying a home remains a significant financial hurdle for many West Australians. The WA Government should be making it easier for all first home buyers to enter the market, not just those who choose to build a new home. A $3,000 FHOG for established properties will go a long way towards evening the playing field and will result in more transfer duty revenue for the State.

    “As the WA economy begins its recovery, it is important that the WA Government doesn’t sit on its hands and just wait for the market to turn. Now is the time to take action and think of new ways we can drive the economy forward.”

    For more information about the 2018-19 Mid-Year Budget, visit the reiwa.com Advocacy page.