Queensland’s new stamp duty exemption offers first-home buyers potential savings in the thousands—but could it also drive up home prices? Past government incentives have triggered price surges in NSW and Victoria, raising concerns that first-home buyers in Queensland might face even tougher competition.
At Unconditional Finance, we understand how policy changes impact the housing market. If past trends are any guide, Queensland’s entry-level property market could see increased demand, potentially driving up prices and offsetting the benefits of the exemption.
So, is this truly a win for first-home buyers, or will rising competition make it harder to get a foot in the door?
Understanding Queensland’s Stamp Duty Exemption
The Queensland Government’s stamp duty exemption aims to help first-home buyers by reducing upfront costs. While specific eligibility criteria apply, the general requirements are:
- The buyer must be purchasing their first home in Queensland.
- The property must be within the price cap set for the exemption.
- The home must be intended as a primary residence, not an investment property.
Potential Savings for First-Home Buyers
Stamp duty costs can add up quickly to a property purchase, making the exemption a significant financial advantage. Depending on the property value, first-home buyers could save:
- $8,000 – $15,000 on properties within the exemption threshold.
- Partial discounts on stamp duty for homes priced slightly above the threshold.
For buyers struggling with deposit savings, avoiding stamp duty costs could free up funds for other expenses, such as legal fees, mortgage application fees, and property inspections.
How Stamp Duty Exemptions Can Influence Housing Demand
Queensland stamp duty exemptions can make homeownership more accessible, but they also bring shifts in market demand, competition, and pricing. Here’s how these changes could unfold:
1. Increased Buyer Competition
Lower upfront costs may encourage more first-home buyers to enter the market, potentially increasing demand and competition.
📌 Higher Demand for Entry-Level Homes
Many first-home buyers who previously found homeownership challenging may now consider entering the market, potentially increasing competition for properties within the exemption range.
📌 Limited Supply Under the Exemption Threshold
With a finite number of homes that qualify, availability may become constrained, making it harder for buyers to find suitable properties.
📌 Rising Sale Prices Due to Competitive Offers
As more buyers target the same properties, sellers may receive multiple offers, which could drive prices higher.
📌 Increased Pressure in Popular Suburbs
Desirable locations like Brisbane, Gold Coast, and Sunshine Coast may experience heightened demand, making it more difficult for first-home buyers to secure a home, whereas regional areas may see a more gradual effect.
📌 Investor Activity in the Same Price Bracket
Even though the exemption is exclusive to first-home buyers, investors purchasing in similar price segments could further limit available stock.
2. Price Growth in the Entry-Level Market
If demand surpasses supply, property prices could increase due to:
📌 Sellers Raising Asking Prices
Homeowners may adjust listing prices in response to increased buyer interest, which could affect the affordability advantage of the exemption.
📌 Exempt Properties Exceeding the Price Cap
As competitive bidding pushes sale prices higher, some properties initially within the exemption range may surpass the threshold, making buyers ineligible for savings.
📌 Financing and Valuation Gaps
If homes sell above their appraised value, lenders may limit loan amounts, potentially requiring buyers to contribute a larger deposit.
3. Seller and Developer Adjustments
In response to changing market conditions, sellers and developers may modify their pricing strategies:
📌 Developers Pricing at the Exemption Cap
To appeal to first-home buyers, some builders may price properties near the exemption limit while considering market demand.
📌 Subdividing Larger Properties
Developers may divide larger lots into smaller, more affordable parcels to cater to first-home buyers and keep properties within the exemption range.
📌 Expansion of House-and-Land Packages
More house-and-land package deals may emerge, strategically positioned within the exemption threshold to appeal to first-home buyers.
4. The Psychological Impact on Buyers
Stamp duty exemptions can also shape buyer behaviour in ways beyond affordability:
📌 Fear of Missing Out (FOMO)
Hearing about potential savings may pressure buyers into rushing their decision, sometimes without conducting thorough research.
📌 Budget Stretching Due to Market Perceptions
Some buyers, fearing rising prices, may push their financial limits to secure a property sooner rather than later.
📌 Emotion-Driven Bidding
Competitive markets can lead buyers to overbid based on emotion rather than financial logic.
📌 Unrealistic Expectations About Affordability
Buyers may assume all properties within the exemption threshold are easily attainable, only to realise that high-demand areas remain costly.
Will Queensland’s Housing Market Experience a Price Surge?
The impact of the exemption on property prices depends on several key factors:
1. Interest Rates
- Higher interest rates reduce borrowing power, which may counteract price growth.
- If rates decrease, more buyers may enter the market, further increasing demand.
2. Housing Supply
- If Queensland sees an increase in new developments, price surges may be moderated.
- If supply does not meet demand, prices in entry-level housing markets could rise.
3. Regional vs. City Markets
- Brisbane’s housing market may experience higher price growth than regional Queensland.
- In outer suburbs and regional towns, prices may stay more stable.
While a price surge is possible, it is not guaranteed. However, first-home buyers should be prepared for increased competition in the market.
What First-Home Buyers Should Consider
With more buyers entering the market, being prepared is key. Here are some smart steps first-home buyers may take to improve their chances of securing a home.
✔ Get Pre-Approved Early
- Pre-approval not only gives you a clear idea of your borrowing power but also makes you a more competitive buyer when making an offer.
- In a fast-moving market, sellers often prefer buyers who already have financing in place.
✔ Expand Your Location Search
- If prices are rising quickly in major cities like Brisbane, consider looking at emerging growth areas where homes are still within the exemption threshold.
- Regional areas with ongoing infrastructure development may offer alternative options with potentially lower competition.
✔ Explore Off-Market and New Developments
- Many properties are sold before they’re even publicly listed. Engaging with local agents and working with a mortgage broker can help you find off-market opportunities.
- House-and-land packages or off-the-plan properties may offer incentives that further reduce upfront costs.
✔ Work with a Mortgage Broker to Maximise Loan Options
- Brokers can compare multiple lenders to help buyers find loan offers that align with their financial situation.
- Some lenders offer special incentives for first-home buyers, such as low-deposit loans or waived LMI (Lenders Mortgage Insurance).
Maximising the Stamp Duty Exemption Without Overpaying
Queensland’s stamp duty exemption offers potential savings for first-home buyers, but it may also contribute to higher home prices in some areas. Increased demand may push up entry-level property prices, making it crucial for buyers to assess market conditions before purchasing.
For buyers looking to maximise the exemption while avoiding overpaying, working with a mortgage broker can provide strategic guidance on financing and market timing.
Need expert guidance? Let’s chat! We’ll help you make the most of the exemption and secure the right financing for your situation. Reach out today!
Frequently Asked Questions (FAQs)
It could. When more first-home buyers enter the market, demand for entry-level properties may increase, leading to higher prices. This has happened in other states, like NSW, where property values in the exemption price range surged after similar policies were introduced.
However, other factors, like interest rates and housing supply, also influence the market. If more homes are built to meet demand, price increases may be moderated.
Not necessarily. While demand might increase, rushing into a purchase could lead to overpaying or settling for a property that doesn't meet your needs. The key is getting pre-approved, setting a clear budget, and considering alternative locations where you can still find value.
It’s also worth watching how the market reacts over the next few months before making a final decision.
A mortgage broker does more than just find you a loan— we help you navigate the entire home-buying process. In a competitive market, having the right financing strategy is crucial.
We compare different lenders, negotiate better loan terms, and identify first-home buyer incentives you may be eligible for (beyond the stamp duty exemption). Most importantly, we ensure you get pre-approved so you can make an offer with confidence.
Yes, developers may adjust pricing to match increased demand. We’ve seen cases where builders price new homes just below the exemption threshold to attract first-home buyers.
Some may also subdivide land to create smaller, more affordable properties that qualify for the incentive. This is why it’s important to carefully assess property value rather than just focusing on the upfront stamp duty savings.
Beyond stamp duty, there are several hidden costs to consider when buying a home. Some of the most common include:
- Mortgage application fees ($500 - $1,500)
- Lenders Mortgage Insurance (LMI) (if your deposit is below 20%)
- Building & pest inspections ($500 - $1,000)
- Legal and conveyancing fees ($1,000 - $3,000)
- Moving expenses and utility connections (up to $5,000)
