With a bumper weekend of auctions we saw the clearance rate hold steady at 75%.

With a break down of;
Scheduled Auctions 1218
Reported Auctions 631
Total Sold 474

It must be remembered though that we are seeing the numbers skewed a little, with properties that are highly unlikely to sell at auction being withdrawn prior to auction.

On the flip side of this point is that good properties are still selling incredibly well and some are sell prior to auction with multiple parties competing.

Although on the raw numbers the market is showing some life it is not all clear sailing as there is a lot of external and Government influences.

One of the big topics is Stamp Duty, and the way this alters the market.

Sold of the reasons are below;

– Stamp duty is stopping people from moving in Victoria and Australia-wide.

– High stamp duty costs discourage people from moving homes, which reduces the number of homes available for sale and rent

– Stamp duty is an inefficient tax because it deters people from buying and moving homes

– Stamp duty discourages people from downsizing, which means larger family homes are not made available for younger families

– Stamp duty discourages institutional investors from investing in build-to-rent programs, which contributes to the shortage of affordable rental housing

– The cost of stamp duty has steadily increased, from around six weeks of total earnings in the 1990s to about five months of after-tax earnings across all Australian cities, and six months in Sydney and Melbourne

– If Victoria were to remove stamp duty and replace it with a broad-based land tax, it could lead to an increase in the supply of homes for sale, an increase in housing affordability and an increase in government revenue. Although we have never seen a Government replace a tax with one that brings in less money.

Once again we see Governments proving they have no idea of the cause and effect of their policies, while it is easy to make grand sweeping reforms that sound good in the media it is harder to make sure they are actually good for the market.