Chief executive of SACOSS Ross Womersley says government's changes to stamp duty will increase house prices

Critics have taken aim at the governments key housing affordability announcement saying it will increase house prices and only help people who can already afford them.

Critics have slammed the state government’s budget stamp duty announcement, saying the new policy will give financial assistance to those who don’t need it, while also increasing house prices.

South Australian Council of Social Services chief executive Ross Womersley said

abolishing stamp duty, specifically on houses above the previous $650,000 price cap, would help first home buyers that “can afford to buy into the market at very high levels”.

“This clearly opens the door to a group of people who are going to get tax relief, who in fact, don’t require it in order to purchase into the market,” he said.

“And given the cost to the government in the tax space, we think that’s a waste of tax income that could be used in other places.”

South Australian Council of Social Services CEO Ross Womersley said the government’s stamp duty policy would give financial assistance to those who don’t need it, while also increasing house prices. Picture: Tait Schmaal.

Real Estate Institute SA chief executive Andrea Heading said the changes would help those in a sounder financial position, and increasing the first homeowners grant would have been a better mechanism to target people already excluded from the market.

Mr Womersley was also unconvinced the government’s stamp duty policy would have its intended effect – reducing the total purchase price for first home buyers – believing house prices would go up.

“We suspect this measure will simply result in inflated entry prices across the market,” he said.

Real Estate Institute SA CEO Andrea Heading said increasing the first homeowners grant would have been a better mechanism to target people already excluded from the housing market. Picture: Supplied

Housing Industry of Australia SA executive director Stephen Knight said the changes are positive for both consumers and the building industry. Picture: Supplied

“What has generally happened, is that, those homeowner grants that federal and state level governments have made through time, have resulted in the market just increasing the cost of the properties that are on the market.

“In this instance, what the government is doing is gifting money, apparently to the homebuyer, but in fact we expect that it will be absorbed by an increase in prices.”

Ms Heading said price increases to new homes and home and land packages were “something they would have to watch quite closely”, but she believed market prices should remain quite fixed.

Housing Industry Association executive director Stephen Knight agreed, saying the stamp duty changes were positive for not only consumers but also the building industry – which has seen a decline in demand over the past 12 months.

“We need to build more houses and you don’t do that by making it more expensive,” he said.

“When we have periods of high demand there is pressure on costs, whether that be labour or materials.

“But we have gone over that massive hump that was driven by Homebuilder and the Covid era and we are in a much more stabilised environment now, so I would be optimistic.”

Originally published as Chief executive of SACOSS Ross Womersley says government's changes to stamp duty will increase house prices