Looming job cuts may be set to undermine the ACT housing market, a new report has found, although a government plan to eliminate stamp duty may provide some respite for the local property market.
CBRE Global Research's Residential MarketView report suggests that Canberra's housing market is likely to be put under increased pressure as job cuts loom for the public service sector.
CBRE Global Research and Consulting associate director, Sam Reilly, said job security would be the major issue in the ACT market for the short to medium term.
“Any further cuts to public servant numbers are set to feed through to a residential market under increasing levels of pressure,” Mr Reilly said.
“Employment security has long been a mainstay of the ACT, with property prices experiencing stability and growth in recent times due to the comparative advantage that job security provides."
Canberra's median property price was at $540,000 for houses (up 0.93 per cent on quarter) and $408,500 for units (down 3.2 per cent on quarter) in May, according to RP Data. Median days on market were 55 days for houses, and 44 for units.
An increase in stamp duty for properties worth more than $1 million would exacerbate the situation, CBRE residential valuer, Renee Pollak, said.
“Stamp duty in [the] ACT, which was already the highest in Australia, increased from 6.75 per cent to 7.5 per cent for transactions in excess of $1 million in the recent ACT government Budget," Ms Pollak said.
"This has the potential to further discourage sales in the houses priced from $1 million price bracket.”
Only recently, however, the ACT government announced plans to remove stamp duty completely, labelling it as an ‘unfair tax’.
“In the 2012-13 ACT Budget the government announced the first five-year phase of a long-term plan to abolish stamp duty," the ACT government said in a statement.
"The rates of stamp duty will fall progressively in coming years. The first cut in stamp duty occurred on June 6, the day after the Budget was handed down.”
“Figures issued to the Legislative Assembly's Estimates Committee show that 97 per cent of properties sold in the ACT in the 2011-12 financial year to date were valued at under $1 million," the government added.