Bracing for a flood of investors departing the market on 1 July – or for a wave of first-home buyers entering it – requires belief in a number of assumptions that simply don’t bear fruit.
When the Victorian Government announced new changes to stamp duty a few months ago, it’s fair to say the property industry sat up and took notice. Marketing plans shifted, developers upped incentives for post-1-July sales while others brought their projects forward.
The media noticed, too. Headline after headline professed the government’s intention to make housing more affordable. It was pretty hard to ignore, right?
You would think so, except for one problem. The majority of purchasers out there just don’t get stamp duty.
We polled around 40 Victorians online, of purchasing age and means, and found that awareness of the new legislation was a key challenge.
One in three respondents were aware of the legislation change in Victoria, while of those who were aware, only 30 per cent felt “fairly confident” in their understanding. When we asked people to summarise the stamp duty change, three in 13 people (who all said they were “fairly aware” of the legislation) were kind of correct and even they didn’t fully get it.
A sample size of 40 people isn’t statistically significant. However, it does suggest that for major change to happen, a bit of education is needed.
Stamp duty has long been a puzzle that most regular buyers fail to piece together fully. As with any tax, it is also confusing. Salta Managing Director Sam Tarascio wrote a great LinkedIn piece breaking down the changes – and it isn’t a simple Sunday afternoon story.
Major change requires major education. Let’s start with educating buyers.
While the stamp duty changes were communicated extensively in traditional media, these outlets aren’t where first-home buyers are getting their information. And they didn’t go into the detail that Sam does in his piece.
As such, the industry cannot assume there is going to be a difference in the market on 30 June compared to 1 July, it is going to take longer than that. This might sound obvious but let’s see some more education and fewer incentives. An educated market is a fair market.
In this new legislative environment, developers have an opportunity to build a meaningful relationship with potential purchasers by helping them understand it.
Don’t give, don’t get.
About The Author
Roxanne Millar, General Manager at Bastion Effect, specialises in driving commercial results for major tier one developers via media relations, social media and direct engagement strategies.