1. Skip to navigation
  2. Skip to content
  3. Skip to sidebar

Property News

High transaction costs could see residential property focus on rentals

December 21, 2011

The Housing Industry Association (HIA) has released its seasonal report into the state of local residential property markets, saying that lower rates of construction have once again proved to be a prominent feature.

According to the peak industry body, housing investments fell by a total of 4.9 per cent in the 2010-11 financial year - perhaps indicating an air of uncertainty in the construction industry.

Speaking on further projected declines in new housing developments over 2012, HIA's chief economist Harley Dale suggested that certain "inefficient and inequitable" elements of the market were driving homeowners and investors to focus on improving their existing investments rather than purchasing new ones.

"The high transaction costs involved in moving home, the largest of which is a highly inefficient tax in the form of stamp duty, creates an inherent bias towards households considering renovation work over new home building," said Dale.

While the HIA has estimated approximately 141,000 new homes will be constructed in the new year, this could be a signal to investors to further investigate the prospects afforded by older, established dwellings.

Related Articles

Residential growth refusing to slow

New details in residential housing growth mean the economy's strength will continue in the ...
read more

Former industrial precincts to become residential hubs

The New South Wales government has announced plans to turn two former industrial areas in north ...
read more

Perth city budget raises fees but aims to revitalise city

The City of Perth budget for 2014/15 was passed on June 25, setting the stage for the ...
read more

Latest Articles

How strong is the NSW property market?

When it comes to making a purchase in the property market, it seems hard to beat the strength of ...
read more

Building booms across many sectors

There are numerous indicators of strength in the housing industry, and one strong signal of future ...
read more

Cash rate at a standstill

One crucial driver of housing demand is the official cash rate from the Reserve Bank of ...
read more