There are other reforms that could assist Adelaide apartments says Property Council chief

THE stamp duty concession for off the plan apartments was welcomed by the industry when announced and has been successful in encouraging new buyers to enter the market.

Torie Brown, acting executive director Property Council of Australia (SA), says there are many reforms that could assist the apartment sector in SA.

THE stamp duty concession for off-the-plan apartments was welcomed by the industry when announced and has been successful in encouraging new buyers to enter the market.

The concession effectively levelled the playing field between apartment developments and house and land packages — the saving for the buyer was roughly equal to what the duty payable would be for a house and land package where duty is only payable on the land transfer. This meant infill developers who chose to build residential apartments in the city and surrounding suburbs were not disadvantaged in comparison to greenfield housing developers.

The concession was also a useful tool for agents trying to appeal to buyers who had not previously considered an off-the-plan apartment, as it kept the initial cost outlay low and made the prospect of inner-city living more attainable.

The concession (which was capped for apartments over $500,000) appealed to the affordable end of the market, meaning that first homeowners made up the majority of sales.

Since the scheduled end of the concession, some of our members are reporting a dip in sales. There is also a lessening in the banks’ appetite to fund investors and developers, which is having an impact on the market.

However, the reality is Adelaide’s market is still relatively affordable, with reasonably priced traditional housing options competing with higher density living products. Relatively low population growth has also impacted demand in the medium/high density residential sector.

While we would encourage the government to look at reinstating the concession, there are other reforms that could also assist the apartment sector.

For instance, the foreign investor surcharge of 7 per cent could be abolished or halved to 4 per cent, which would make South Australia one of the lowest cost-jurisdictions for foreign residential buyers and provide market stimulus.