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The South Australian building industry says the state government's budget stamp duty measures have come at the right time as demand for new house builds drops amid cost of living pressures.
Key points:
- Premier Peter Malinauskas said the stamp duty initiative would benefit people entering trade apprentices
- SA's building industry says the announcement has come at the right time and is "great for the economy"
- The opposition has raised questions about the narrow conditions of the scheme as property prices rise
But the state opposition has raised questions about the narrow scope of the scheme, with property prices on the rise in South Australia.
Yesterday, the SA government announced stamp duty would be abolished for first home buyers purchasing a newly constructed home valued at up to $650,000 or those buying land worth up to $400,000.
Premier Peter Malinauskas said the stamp duty initiative would benefit not only aspiring home owners, but also people entering trade apprentices by creating additional residential construction.
He said targeting the policy to only new builds would help increase housing stock.
"Calibrating the policy towards new builds means more supply, which doesn't just mean a better outcome for the new home buyer but also for the housing market as a whole," he said.
Master Builders South Australia had pushed for the stamp duty changes, and the association's chief executive Will Frogley said the move was "great for the economy".
"We've got a record number of people employed in construction in South Australia at the moment, it's really positive, and announcements like this make sure the future looks rosy," he said.
The Housing Industry Association's South Australian regional director Stephen Knight said the announcement came at the "right time".
"Mostly as a result of the home builder grant we've had a massive demand for home building over the last few years but that's starting to fall away," he said.
He said while there was still "quite a bit of work to do" at the moment, it was "rapidly coming to an end".
"We think demand for construction will be tailing off towards the end of the year," he said.
Mr Knight said inflation and cost of living pressures had led to sales of new builds falling.
"The number of sales has dropped off significantly in South Australia, probably about 30 per cent," he said.
Mr Knight said the measure would give aspiring home buyers a "decent leg up".
"Stamp duty relief is something we've been asking for a long time," he said.
Mr Knight said people who signed a contract today would on average have their house built "within 12 months" from the time work began, but he expected it to return to pre-COVID levels of between four to five months next year.
Opposition spokesperson Matt Cowdrey said the stamp duty scheme had "quite a few asterisks" attached to it and the number of properties eligible was shrinking.
"There are very few properties that will actually be eligible for purchase under this scheme," Mr Cowdrey said.
"The question that the opposition still has for the treasurer is will that $650,000 threshold be indexed over time, because if that is not, that list of suburbs is going to diminish year after year as long as house prices continue to increase."
Housing industry expected to 'cool off' in short term
Both Mr Knight and Mr Frogley said measures in the budget to attract more people to take up apprenticeships were also important.
Mr Frogley said the "tradie shortage is definitely real".
"It's hard to be fixed overnight because it takes time to train people," Mr Frogley said.
Mr Frogley said he expected building approvals to decline in the next 12 to 18 months before picking up again as migration increased.
"We do think the housing will cool off a little bit in the short term but we do think it's going to ramp right up," he said.
"We just need to get more people to understand that building and construction trade is an excellent career option."
The Property Council of Australia's South Australia executive director, Bruce Djite, said abolishing stamp duty for new homes was "worth applauding" as it would help increase housing supply.
"Supply is what's required … We increase supply, we [ease] that real pressure cooker that currently is the housing market and that should help address prices," he told ABC Radio Adelaide's Stacey Lee and Nikolai Beilharz.
Mr Djite said the cap on stamp duty abolition for properties up to $650,000 was reasonable given the "median price for a dwelling in South Australia is in and around $675,000".
Mr Djite said previous state government announcements of new land releases were also welcome news, but infill was important to "address the housing crisis" quickly.
"To address the housing and affordability crisis it is about diversity and choice of housing, and house and land is great for some, but so are apartments, so are town houses, so are smaller blocks of land in and around schools and work," he said.