SA property market stamp duty windfall boosts state budget by more than $200m

Next week’s state budget will get a huge injection of more than $200 million thanks to SA’s booming house market. There are already demands on how to spend it.

A booming housing market is set to drive a stamp duty windfall worth more than $200m in next week’s state budget.

The regional market, in particular, is flying high, with new figures revealing more people are buying up in country SA in numbers not seen since 2007.

In the first half of this financial year, the government received $115m more than expected in stamp duty revenue, amid a surge of land transactions and soaring house prices.

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It is believed the total windfall is well over $200m, but figures will not be released until Tuesday’s budget.

Treasurer Rob Lucas revealed revenue had been bolstered by significant stamp duty receipts that were for 2020-21, but there would be more modest increases in the forward estimates.

Treasurer Rob Lucas will hand down the state budget next week. Picture: NCA NewsWire / Emma Brasier

He said home and land sales demand had been brought forward by government stimulus, but did not specify a final number for stamp duty receipts, while indicating he was keen to get the budget back into surplus as soon as possible.

Combined with the $926m GST windfall announced in last month’s federal budget, Mr Lucas now has an influx of more than $1bn to deploy.

“We’ve had this two-year stimulus but that’s it in terms of the adrenaline rush to kickstart the economy,” he said.

Australian Bureau of Statistics data, released on Tuesday, revealed more people are buying up in regional SA amid the Covid-19 pandemic.

In the March 2021 quarter, there were 2540 transactions recorded for existing homes outside of Adelaide – up from 1532 in the March 2020 quarter.

The last time there were this many transactions outside the capital city was in the December 2007 quarter.

SA Chamber of Mines and Energy boss Rebecca Knol urged increased spending to tackle a maintenance backlog for regional and remote roads.

“The SA road network is critical to the efficient, safe operation of the resources sector,” she said.

Adelaide house prices rose by four per cent last quarter, while the residential property price index jumped to 131.3 – the highest ever recorded for the city.

Adelaide house prices rose by four per cent last quarter.

PwC Adelaide managing partner Jamie Briggs, a former Liberal assistant infrastructure minister, forecast extra stamp duty revenue as a result of growing house prices.

“This is good news because it will allow more flexibility for the state government to invest further in the state’s infrastructure agenda,” he said.

Bank SA chief economist Besa Deda attributed the increased stamp duty revenue to a rise in housing sales volume and prices, falling unemployment and low interest rates – but warned the boom would not last forever.

“This pace of house price growth might not continue over the medium term,” Ms Deda said. “We could also see a resumption of net interstate migration outflows as local and international borders re-open.”

Opposition treasury spokesman Stephen Mullighan urged the government to use its “massive surges in revenue” to address the state’s ambulance ramping crisis.

“It should also provide additional support to first homebuyers, who are struggling to afford housing with the recent boom in house prices,” he said.

The government on Tuesday also released a tender for eight years of public housing maintenance work. The $900m project is expected to support about 800 jobs.

A challenging forecast has also been issued for the hi-tech sector, upon which Premier Steven Marshall has rested job growth hopes.

A Deloitte report says SA’s IT workforce is forecast to grow at 4.6 per cent annually over the next five years, below the national predicted increase of 5.4 per cent. This defies an uptick after the Covid-19 pandemic hit last year, from when SA’s IT sector grew by 5.8 per cent, beating the national 4.3 per cent.