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With the current strength of the Melbourne and Sydney real estate markets continuing, again focus moves to affordability, especially for first home buyers.

The stamp duty debate is back in the news again since the Property Council of Australia released figures on Monday that showed the cost of stamp duty to home buyers with an average sized mortgage has increased by 74.9% in Sydney and 76.5% in Melbourne during the past 20 years.

However it is worth noting that the rate of stamp duty has not risen in that time but rather it is as a direct result of higher property prices.

Some will argue that stamp duty worries become inconsequential for buyers who purchase the right assets that achieve capital growth as this will offset the stamp duty costs in the long term.

Others have called for a reduction in stamp duty, however many believe that a reduction in stamp duty would fuel the affordability crisis that is currently being faced in Sydney and Melbourne by giving stimulus to an already heated market.  Whilst some believe it would see more properties enter the market, increasing volumes and therefore slow the market and improve affordability.

No doubt debate will rage on for some time yet.

James.jpg

James Worssam

0418 585 815

james@greatoceanroadrealestate.com.au

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