HELP for first home buyers and tax cuts are urgently needed to boost a sluggish autumn property market.
Real Estate Institute of Victoria chief executive officer Enzo Raimondo said reforming property taxes to improve equity, remove double taxation and promote investment was timely given waning stamp duty revenues in a slowing economy.
"The current structure of property taxes in Victoria is inefficient and discourages the necessary investment in housing and commercial property,'' Mr Raimondo said.
"Residential home buyers are subject to bracket creep when prices rise, leading to an increasingly high level of taxation. This not only results in a higher level of stamp duty for every dollar spent on a home but also discourages people relocating.''
A continuance in the first home buyers' grant scheme past the June 30 expiry date was also needed, he said.
"(However) it is clear that the policy aim of the bonus - boosting the construction of new homes - has been met, making it unnecessary to provide additional funding for the program at this time,'' he said.
Instead, equalising assistance for all first home buyers would provide more choice in where they live, thus spreading competition across the market more evenly, he added.
Agents agree a reluctance on the part of first home buyers entering the market and a decrease in "up-sizing'' was impacting the entire property market.
Rural lifestyle property specialist, Bruce Falk, said negativity surrounding the metropolitan property market was having a trickle-down effect on rural lifestyle properties.
Slight increases in interest rates were not to blame for a slow start to the year in property sales, he added.
"With interest rates at 7 per cent, there is no reason for vendors to lower prices, when they get up up to 10 or 12 per cent, then it would become a buyers market.''
"We've all been waiting for the breakthrough that I thought could have happened four weeks ago.
"That said, the auction results in Melbourne a fortnight ago were the best they have been in a long time, so we'll see what happens in the next week or so.''
"The regions are normally three months behind the leafy suburbs, so we'll see what happens (in the rural and lifestyle market) then.''