Listings and sales of homes across the state have taken a huge hit in the past month as real estate businesses shed staff and market confidence evaporates.
The Real Estate Institute of South Australia sent a submission to Premier Steven Marshall on Wednesday calling for assistance. A copy was also sent to Leader of the Opposition Peter Malinauskas.
Treasurer Rob Lucas this morning announced a $50 million land tax relief package for residential and commercial landlords, offering a 25 per cent reduction on their 2019-20 land tax liability on affected properties.
But REISA president Brett Roenfeldt said the peak body’s submission also included a request for stamp duty relief for six months and incentives for first home buyers looking to purchase established properties.
“In essence, the real estate industry produces billions of dollars of income in South Australia, whether that be stamp duty, GST or the flow-on effects from many other industries so the government would certainly be feeling that lack of income coming through at the moment, it would be significant,” he said.
“There’s got to be some incentives to kickstart the real estate industry in South Australia to get it moving because the quicker the industry starts moving the more money comes through the system.
“If it’s a $500,000 sale, there is $20,000 – $24,000 worth of stamp duty going into government coffers plus the GST plus all the other add-ons that go with it from house stylists to conveyancers, brokers and all sorts of different industries that generate income from real estate. The quicker we can start to get this moving then it builds greater confidence and people start spending more money.”
Winter is traditionally the quietest season for the real estate industry with spring the busiest.
Roenfeldt said Federal Government incentives such as the JobKeeper subsidy had been beneficial to the industry but the downturn had led to some real estate businesses reducing administration and sales staff numbers.
He said he was a hopeful of a resurgence if restrictions were lifted by spring but the industry urgently needed assistance well before then.
“There are other factors that play into that – how the banks are going to be treating loan approvals, job security – so I don’t think it will be anywhere near what we would normally expect but if we start to climb out and we’ve got more property coming onto the market it will slowly start to build.”
Treasurer Rob Lucas said the land tax announcement today would help relieve pressure on the industry.
He said the government support packages had so far focused on helping businesses and industries directly impacted during the worst of the crisis.
“What the government has to do over the coming months is get people back into jobs and save as many businesses as we can, survive the worst of the COVID-19 pandemic and then see what we can do in terms of recovery,” Lucas said.
“Some of the businesses that REISA represents will be some of the applicants for our $10,000 grants because they have been significantly impacted.
“We have to recognise that in the midst of the pandemic with the tens of thousands who have lost their jobs, it doesn’t matter whether you provide stamp duty relief or first home buyer grants, if you don’t have a job, you’re not going to be making big commitments.
“I think we need to get through this pandemic and then we can make some judgements as we prepare for the road to recovery.”
Shadow treasurer Stephen Mullighan said the real estate industry had been severely impacted by the Coronavirus pandemic.
“Labor has called for a number of the proposals proposed by REISA including the waiving of government fees, council rates,” he said
“It is clear that the real estate sector needs urgent support and we would urge the Marshall Liberal Government to give serious consideration to this submission.”
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