‘Stamp duty affects a whole industry’

Last week, REINSW CEO Tim McKibbin called on the state government to slash 75 per cent off stamp duty.

“COVID-19 threatens to tear the economy apart, a substantial reduction of stamp duty represents a lifeline,” Mr McKibbin said.

Mr Panos and Mr Tarrant concurred with Mr McKibbin’s statement, with the former noting that stamp duty “is a thing that not only affects buyers and sellers, it affects a whole industry”.

“You’ve got a barrier of entry that apart from having to buy the product, you’ve got to pay the privilege to be able to buy the product,” Mr Panos said.

“Often, people are going off and they’re borrowing money for the stamp duty, and I can tell you that one of the reasons why transactions across Australia have declined per year... [is because of] the transaction costs to come in and out of real estate, which doesn’t occur in the equities market.

“It’s interesting because if you turn around and you think: If I was in government, I’d be modelling and saying, ‘Hang out, what if we reduced this but we ended up increasing the amount of turnover of real estate?’ I’s the classic example of where you drop the price, will you get more transactions? So, the government can actually win out as well in the process by more people actually selling.

“I think it needs to be looked at 100 per cent.”

In referencing Mr McKibbin’s comments, Mr Tarrant added:

“Another point was around how you’ve got to keep agents more active and all the people involved in that transaction process: auctioneers, marketing companies, advertising – this whole ecosystem.”

“Property is the economic backbone of this nation. We need properties to transact. So, you have this industry itself of real estate – agents, offices, people that make signs, marketing, communications, all that sort of stuff – then you have the mortgage sector as well,” Mr Tarrant said.

“When you look at how we are navigating COVID-19 as a nation and you look back to one of the most immediate crises, the GFC – one of the reasons why Australia performed so well during that was the prudential oversight and governance of our major lenders – the big four banks. They pushed us through.

“You look at any of the balance sheets of the banks, where do they make the most money? It’s from their mortgage and real estate-orientated work. We need to get the market moving.”

During the latest episode of the What’s Making Headlines podcast, Mr Tarrant and Mr Panos also shared the four strategies the best real estate agents are embarking on amid the COVID-19 crisis.