New research by LJ Hooker shows that government charges, such as stamp duty, are dissuading owners from selling their homes. With owners reluctant to sell, the number of properties coming to market is limited, causing pent up demand and worsening affordability.

 LJ Hooker surveyed 2,700 home owners, and found that 60 per cent of survey respondents who requested a market update, also known as an appraisal, in 2016 did not progress to selling their property.

“A market update is the first critical step in the selling process,” said Mathew Tiller, head of research for LJ Hooker, adding that the high rate of people not progressing to sell "suggests there is a deterrent in the selling process."

“When pressed for the reason why they chose not to sell, almost half (44 per cent) indicated the costs involved with selling then buying a new home, including stamp duty, were too high."

In Sydney, the sale of a median priced property costs a buyer around $40,000 in stamp duty, said Tiller. In Melbourne, the cost is $37,520 for buyers.

If stamp duty was lowered, 51 per cent of respondents said they would be more likely to sell. That number jumps to 61 per cent if stamp duty was to be scrapped entirely.

Pent-up demand is a significant contributor to the rapid price rises in some capital cities over the last few years.

Across the country, listings were down 8.9 per cent in 2016 from the previous 12 months, according to CoreLogic. 

LJ Hooker network chief Graeme Hyde said while efforts to increase new housing supply helped improve affordability, established homes overwhelmingly account for the bulk of real estate transactions.

“Home owners are staying in their properties for longer periods of time, which is reducing the necessary turnover of stock," he said.

Read more about stamp duty charges, and calls to lower or abolish them:

Time to support first homebuyers, says REINSW

New premier means time to review stamp duty, says REINSW

Changing stamp duty the way to improve affordability: Pilkington