Stamp duty receipts on the rebound

Stamps rise again

Stamp duty and land transfer receipts over the year to February were on the up again, and heading towards $8 billion.

That's still some way below the heady 2017 peaks of above $10 billion, but still a taxation bonanza nonetheless, with plenty more to come over the next few years. 

With Sydney property prices up 20 per cent since slumping into the May 2019 election and up +27 per cent over March to date there will be a decent uplift from here, probably to record highs before the year is out. 

There was plenty of social media annoyance about a Chinese-Australian buyer paying $20 million for a Bondi Beach penthouse with ocean views on Saturday, but Revenue NSW certainly won't mind collecting the $1.4 million in duties (not to mention the capital gains taxes that will be raised from the seller, as the property was previously rented out).  

There have been many calls to scrap stamp duty over the years, but that'd leave a big hole in the state budget to fill. 

Hello seller!

More listings

Not so long ago commentators were frothing about the coming 32 per cent property price crash.

Now prices are rising, all the talk is of a market intervention!

The middle ground can be a lonely place to be. 

Of course, normally what happens when prices rise quickly is more sellers come into the market, and in time the market finds its level and a more sustainable pace of growth.

Voila...

As I discussed with Stephen Kouloulas in this video here, more building and more supply will calm things down in time. 

Podcast: Price is what you pay...

Buffett series

For the second part in our Buffett mini-series...you can tune in here (or click on the image below):

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More on lending standards

Lending standards are tough

Some additional detail on what's happening with lending.

See here for more (or click on the image below):

You can access the suite of WeIntelligence market research tools for free here. 

Weekend reads

Weekend reads

This weekend at Property Update, a look at the surging Sydney housing market, and what might happen when borders reopen.

Click here to read (or on the image below):

You can subscribe for the free Michael Yardney podcast here. 

Podcast preview

Podcast preview

A sneak preview of the next podcast episode in our Buffett mini-series...

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You can download our new e-book here.

You can listen to the whole podcast series here.

You can tune in to the full podcast series at Soundcloud, Stitcher, or Spotify.

Don't forget to leave us a friendly review, as it helps us to get the word out.  

V is for Victoire!

Employment booms

Although it wasn't in any market forecasts, I did flag the possibility of record high employment rebounding to 13 million this month...

And it was to be so, with the figures sticking up a beautiful V-sign (for victory) to the pessimists, although many still believe employment will decline when JobKeeper ends.

Total employment is now above 13 million. 

The unemployment rate plunged all the way down to 2016 levels from 6.4 per cent to 5.8 per cent, with even lower results for New South Wales and Victoria. 

Employment has already largely recovered in the two most populous states in just 9 months, but Queensland has been the big outperformer over the year. 

Hours worked actually sneaked a little higher over the past year, though presumably many of these hours were done from home rather than in a city office. 

What more to say? 

A huge beat with full time employment increasing by a monster 89,100 in February. Wow!

Now let's hope we have the collective ambition to carry this thing through and push for an unemployment rate of 3 to 4 per cent. 

Lending standards remain robust

Lending standards chat

There's been a bit of idle social media talk about lending standards, which overall remain relatively tight.

There has been a modest increase in the market share of higher LVR loans, driven by the success of the First Home Loan Deposit Scheme (FHLDS), but overall lending is far tighter than it used to be (with just with a little more oxygen now than during the dark days of the banking Royal Commission). 

There's almost no SMSF or low doc lending now, loans to overseas residents are way down, and the stock of interest-only loans has plunged a massive 55 per cent lower since 2017.

In fact the stock of IO loans represents the lowest ever share of the housing loan stock, now at under 15 per cent, as more and more borrowers have switched across to paying down debt. 

There has been a bit more lending at high debt to income ratios of 6x or above, which is barely an issue given serviceability ratios are at the easiest level in nearly 45 years.

Regulators mightn't want to see a combination of high DTI ratios and skinny serviceability calculations, mind you, and as such it's possible that 25 basis points might be added to higher LVR mortgage assessment rates before the year is out, just to nudge things back into line.

Overall, though, most of the economist chat simply overlooks that competition in the mortgage lending space and record low rates are driving asset prices higher, much as you'd expect. 

Investment loans also remain at very low levels, although this will likely change before the end of 2021.

Overall, lending standards remain robust, as anyone who's been through the wretched process would know! 

Borrowing capacity has also been slashed over recent years.