This report validates the thesis that beyond established barriers such as government taxes and lender policies, a third significant handbrake on Australian housing portability exists: “Industry Friction.” This friction is a composite of high direct transactional costs, protracted timelines, and systemic inefficiencies inherent in the property sales process. The analysis demonstrates that these industry-specific factors impose a substantial financial and psychological burden on consumers, actively discouraging market mobility.

The total direct cost of industry friction for a vendor selling a median-priced home in Australia typically ranges from 3% to 5% of the sale price. This represents a sum of tens of thousands of dollars, comprising agent commissions (averaging 2.0% to 2.5%), Vendor-Paid Advertising (VPA) (0.5% to 1.0%), and conveyancing fees.¹ For buyers, the “buyer-beware” model creates a significant, unrecoverable financial drain through the cumulative cost of commissioning duplicate due diligence reports on unsuccessful property bids.

Qualitatively, the standard sales process is characterised by significant time costs, with an end-to-end timeline from pre-listing preparation to settlement often spanning three to six months.⁴ The market operates with a high degree of information asymmetry, particularly in pricing and negotiation, which benefits industry incumbents at the expense of consumer transparency and confidence. Furthermore, procedural bottlenecks and administrative complexities within the conveyancing and settlement stages create uncertainty and risk, adding a substantial psychological burden that further deters mobility.

While Property Technology (PropTech) has introduced marginal efficiencies, particularly through the digitisation of the settlement process (e-conveyancing), it has largely failed to disrupt the core cost structures and power dynamics of the industry. Analysis reveals that many PropTech solutions have inadvertently reinforced the existing agent-centric model by providing tools that enhance incumbent efficiency, rather than fundamentally altering the transactional framework for the benefit of the consumer.

Strategically, this layer of industry friction acts as a powerful compounding barrier. When combined with the financial hurdles of stamp duty and restrictive lending criteria, it creates a cumulative disincentive that significantly reduces market liquidity. This inertia constrains labour mobility, prevents households from efficiently adapting their housing to changing life circumstances, and ultimately impacts broader economic productivity.

This section provides a granular, evidence-based breakdown of the direct financial costs imposed on vendors and buyers, quantifying the first and most tangible layer of industry friction. These costs, often incurred before any sale is guaranteed, represent a significant financial tollgate on the path to housing portability.

1.1 Agent Commissions: The Primary Tollgate

Agent commissions represent the single largest direct cost for a vendor in a residential property transaction. The fee is typically structured as a percentage of the final sale price, a model that, while standard, contains inherent structural conflicts that contribute to market friction.¹

Commission Structures and Geographic Variance

The commission rate is negotiable and varies significantly based on location, property value, and local market competition.¹ Across Australia, average rates generally fall between 2.0% and 2.5%.¹ However, this national average masks substantial state and regional disparities.

• Metropolitan Markets: Capital cities with higher property values and greater agent competition tend to exhibit lower average commission percentages. Sydney (average 1.87%), Melbourne (1.93%), and Adelaide (1.90%) are among the most competitive markets.⁹ In contrast, cities like Brisbane (2.52%), Perth (2.28%), and Hobart (2.67%) command higher average rates.⁹ Tasmania is consistently identified as having the highest commission structures in the country, with a state average approaching 3%.⁸
• Regional Markets: A consistent trend across all states is that commission rates in regional areas are higher than in their metropolitan counterparts, often ranging from 2.5% to 3.5%.⁶ This premium is generally attributed to lower median property prices and reduced transaction volumes, requiring agents to charge a higher percentage to maintain business viability.
• Alternative Fee Models: While the percentage model dominates, alternative structures exist. Tiered or incentive-based commissions feature a base percentage up to an agreed sale price, with a significantly higher percentage (e.g., 6% to 10%) applied to any amount achieved above that threshold.¹ This model is designed to align agent and vendor interests in maximising the sale price. Conversely, fixed-fee models, often championed by PropTech entrants, have struggled to gain mainstream traction. The high-profile failure of firms like Purplebricks in the Australian market suggests a strong consumer preference for, or cultural entrenchment of, the traditional commission-based model.¹⁴

The standard percentage-based commission structure, however, creates a subtle but powerful conflict of interest. An academic analysis of agent incentives reveals that the marginal financial gain for an agent to secure a higher price is often minimal compared to the value of securing a quick sale.⁷ For a property valued at $800,000 with a 2.5% commission, an agent stands to gain only an additional $250 for securing an extra $10,000 for the vendor. Conversely, the agent loses only $250 by convincing the vendor to accept $10,000 less. This calculus structurally incentivises transaction velocity over price maximisation. The agent’s primary financial driver is to realise their substantial base commission (e.g., ~$20,000) and move to the next listing, rather than investing significant additional time and effort for a negligible personal return. This dynamic represents a form of hidden transactional friction, where the vendor bears the full opportunity cost of a potentially lower sale price driven by the agent’s incentive for a rapid turnover.⁷

Table 1: Comparative Real Estate Agent Commission Rates & Costs by Capital City (2025)

Capital City	Average Commission Rate (%)	Median Dwelling Value (AUD)	Calculated Commission Cost (AUD)
Sydney	1.87	$1,210,222	$22,631
Melbourne	1.93	$796,952	$15,381
Brisbane	2.52	$894,425	$22,539
Adelaide	1.90	$822,201	$15,622
Perth	2.28	$807,933	$18,421
Hobart	2.67	$661,544	$17,663
Canberra	2.19	$846,955	$18,548
Darwin	2.49	$506,591	$12,614

Sources: Commission rates sourced from ⁹ and.^11. Median dwelling values for June 2025 sourced from ⁶³ and.⁶⁴

1.2 Vendor-Paid Advertising (VPA): The Upfront Gamble

Vendor-Paid Advertising (VPA) is the standard industry practice whereby the property seller, not the agent, bears the full, upfront cost of marketing their property.¹⁵ This cost is payable regardless of whether the property sells, representing a significant financial risk for the vendor. The total VPA budget typically ranges from 0.5% to 1.0% of the property’s expected value, translating to an outlay of $5,000 to $10,000 for a median-priced Australian home.²

Cost Components

A comprehensive marketing campaign is composed of multiple elements, each contributing to the total VPA cost:

• Online Portal Fees: This is often the largest single expense. Securing a premium or featured listing on major national portals like realestate.com.au and Domain is considered essential for market exposure. Costs can range from a base of around $600 to over $8,000 for high-value properties in major metropolitan areas.²
• Professional Services: Standard inclusions are professional photography ($300 – $1,500, with higher costs for video or drone footage), professionally drafted floor plans (approx. $370), and compelling copywriting for the listing (approx. $180).²
• Physical Marketing Materials: A ‘For Sale’ signboard is a ubiquitous feature of a sales campaign, costing between $70 and $400. Printed brochures for open homes add approximately $200.²
• Property Styling and Staging: While discretionary, professional styling is an increasingly common recommendation from agents to enhance a property’s appeal. Costs can range from several hundred dollars for a consultation and minor additions to upwards of $10,000 for styling a vacant property with hired furniture.¹²
• Auctioneer Fees: For properties sold via auction, a professional auctioneer must be engaged, with fees typically ranging from $400 to $1,000.¹²

The VPA model functions as a mechanism for risk transference. In most other industries, marketing is considered a cost of doing business, borne by the service provider. In Australian real estate, VPA shifts this entire commercial risk from the agent to the consumer.¹⁵ The vendor is financially committed to a non-refundable campaign cost before any offers are presented. This creates a “sunk cost” that provides the agent with significant psychological leverage during negotiations. If an offer is presented that is below the vendor’s expectations, the vendor faces a difficult choice: accept the lower price, or reject it and risk the property not selling, which would crystallise the VPA expenditure as a total loss. The emergence of VPA financing platforms like CampaignAgent and CampaignFlow, which allow vendors to defer marketing payments until settlement for a fee (e.g., a flat 6.9%), facilitates agreement to larger marketing budgets, thereby increasing this sunk cost and amplifying the agent’s leverage.²¹ This pressure to avoid a guaranteed financial loss on the marketing campaign is a powerful, unquantified form of industry friction.

Table 2: Indicative Vendor-Paid Advertising (VPA) Cost Breakdown for a Median-Priced Property

Marketing Item	Low-End Cost (AUD)	High-End Cost (AUD)
Online Portal Listing (Premium)	$1,000	$8,000
Professional Photography & Video	$300	$1,500
Floor Plan	$200	$400
Signboard	$150	$400
Property Styling / Staging	$1,500	$10,000
Auctioneer Fee (if applicable)	$400	$1,000
Total Estimated Range	$3,550	$21,300

Sources: Cost ranges compiled from.²

1.3 Conveyancing & Legal Fees: The Necessary Labyrinth

Both the buyer and the seller in a property transaction must engage a licensed conveyancer or solicitor to manage the legal transfer of ownership.²⁴ This is a mandatory cost layer that, while smaller than agent commissions, adds several thousand dollars to the total transactional burden.

The cost structure typically involves a professional fee for the service, plus a series of “disbursements,” which are out-of-pocket expenses paid to various government authorities for necessary searches and certificates.²⁵ While solicitors can handle more complex legal matters (e.g., transactions involving trusts or family law disputes) and generally charge higher fees, licensed conveyancers are specialists in property law and are sufficient for most standard transactions.²⁴

Average professional fees vary significantly across states. Jurisdictions like NSW (average ~$1,400-$1,650), the NT (~$1,260-$1,875), and the ACT (~$1,570) tend to be at the higher end of the scale.³ States such as Victoria (~$960-$1,280), WA (~$920-$1,410), and SA (~$810-$1,270) occupy a middle tier, while Queensland (~$1,050) is often more competitive.³

On top of these professional fees, disbursements can add several hundred dollars to the final invoice. These costs cover essential checks such as:

• Title Searches ($20 – $100) ³
• Local Council Certificates ($53 – $250) ³
• Water and Land Tax Clearance Certificates ($20 – $65) ²⁴

While conveyancing is a necessary service to ensure legal compliance and protect the interests of both parties, its cost and complexity contribute to the overall friction of the transaction.

1.4 Due Diligence Costs: The Burden of Redundancy

The Australian property market operates on a “buyer-beware” basis, placing the onus on the prospective purchaser to conduct all necessary due diligence before committing to a purchase. This creates a direct cost for buyers and, more significantly, a structurally inefficient system characterised by redundant expenditure.

The most common pre-purchase reports commissioned by buyers are:

• Building and Pest Inspections: Essential for freestanding homes, these reports identify structural defects, safety hazards, and the presence of timber pests. The combined cost typically ranges from $400 to $500 for an average-sized house, but can exceed $800 in major metropolitan areas like Sydney.²⁹
• Strata Reports: Mandatory for anyone purchasing a unit, townhouse, or apartment within a strata scheme. This report provides a comprehensive overview of the owners’ corporation’s financial health, building maintenance plans, any ongoing legal disputes, and the adequacy of its capital works fund. The typical cost for a strata report is between $250 and $495.³²

The primary inefficiency of this model lies in its duplication of effort and cost. In a competitive market, it is common for a single property to attract multiple serious buyers. Each of these parties must independently commission and pay for its own set of reports. For an auction with five interested bidders, this can result in a collective expenditure of over $2,500 on building and pest inspections alone for that one property. As only one party can be the successful purchaser, the other four bidders are left with an unrecoverable “dead cost” of $500 each.³⁰

This systemic flaw creates a significant financial disincentive for market participation. A buyer who is unsuccessful at several auctions could easily accumulate thousands of dollars in sunk costs for reports on properties they did not acquire. This financial drain acts as a direct barrier, particularly for first-home buyers with limited capital. The emergence of business models where a single, independent report is commissioned by the vendor and made available to all prospective buyers for a nominal fee is a direct market response to this glaring inefficiency, though this practice is not yet universal.³⁴

Table 3: Summary of Conveyancing and Due Diligence Costs Across Australian States

State	Average Conveyancing Fee (Vendor/Buyer) (AUD)	Typical Building & Pest Inspection Cost (AUD)	Typical Strata Report Cost (AUD)	Total Potential Buyer Outlay (per attempt) (AUD)
NSW	$1,400 – $1,650	$500 – $800	$250 – $400	$2,150 – $2,850
VIC	$960 – $1,280	$400 – $600	$250 – $350	$1,610 – $2,230
QLD	$880 – $1,050	$440 – $550	$250 – $350	$1,570 – $1,950
WA	$920 – $1,410	$400 – $600	$250 – $350	$1,570 – $2,360
SA	$810 – $1,270	$400 – $550	$250 – $350	$1,460 – $2,170
TAS	$1,000 – $1,280	$400 – $550	$250 – $350	$1,650 – $2,180
ACT	~$1,570	$500 – $700	$250 – $400	$2,320 – $2,670
NT	$1,260 – $1,875	$500 – $700	N/A	$1,760 – $2,575

Sources: Conveyancing fees compiled from.³ Inspection and strata costs compiled from.²⁹ Total Buyer Outlay assumes a buyer pays for their own conveyancing review of the contract plus a building/pest or strata report.

Beyond the quantifiable financial outlays, the Australian property transaction process is laden with structural and procedural inefficiencies. These factors—related to time, complexity, and a lack of transparency—create potent non-financial forms of friction that significantly deter market mobility.

2.1 The Sales Campaign Gauntlet: Time as a Transactional Barrier

The advertised “days on market” (DOM) figure, which measures the time from listing to sale, represents only a fraction of the total time commitment required to sell a property. The end-to-end process, from the initial decision to sell through to the final settlement, is a protracted gauntlet that typically spans three to six months.⁴

This extended timeline can be broken down into four distinct stages:

1. Pre-Listing Preparation (2 weeks to 3+ months): This is often the most variable and labour-intensive phase. It involves selecting an agent, engaging a solicitor or conveyancer to prepare the contract of sale, and preparing the property for market. This can range from simple decluttering and minor repairs to significant renovations, which can take several months to complete.⁵
2. Marketing Campaign (3 to 6 weeks): This is the active “on-market” period. It begins with professional photography and the creation of marketing materials, followed by the property being listed online. This phase involves a series of open homes and private inspections.³⁶ The national median DOM during the July 2023 quarter was 33 days, but this figure is highly sensitive to local market conditions, ranging from a rapid 10 days in a “hot” market like Perth to a lengthy 54.5 days in a cooler market like Hobart.⁴¹
3. Negotiation and Contract Exchange (1 to 3 weeks): Once interest is established, a period of negotiation ensues between the vendor’s agent and prospective buyers. This culminates in the acceptance of an offer and the formal exchange of signed contracts.³⁸
4. Settlement Period (30 to 90 days): Following the contract exchange, a legally mandated settlement period begins. While negotiable, a 6-week (42-day) period is standard in many jurisdictions. This allows the buyer to secure unconditional finance and both parties’ legal representatives to complete the necessary title transfer paperwork.³⁶

This protracted and uncertain timeline represents a major economic and psychological cost. For households needing to relocate for employment, the multi-month delay between securing a new job and being able to move can be a prohibitive barrier to labour mobility. Furthermore, the process imposes a significant psychological burden. Vendors must endure weeks of disruption, maintaining their home in “show home” condition for inspections while navigating the uncertainty of the sale process.³⁹ This extended period of stress, effort, and ambiguity acts as a powerful deterrent. Many households may choose to endure a suboptimal living situation—such as a long commute or an inappropriately sized home—rather than embark on the arduous and costly three-to-six-month journey of selling their property.

Table 4: The Australian Residential Property Sales Timeline: Key Stages and Durations

Stage	Typical Duration	Key Activities
Pre-Listing Preparation	2 weeks – 3+ months	Research market, select agent, engage conveyancer, complete repairs/renovations, declutter and clean. 5
Marketing Campaign	3 – 6 weeks	Professional photography, property listed online, open homes and private inspections conducted. 36
Negotiation & Contract	1 – 3 weeks	Agent receives and negotiates offers with potential buyers, offer is accepted, contracts are signed and exchanged. 38
Settlement Period	30 – 90 days	Buyer secures unconditional finance, legal representatives conduct searches and prepare transfer documents, final inspection, funds are exchanged, and ownership is transferred. 36

2.2 The Opaque Marketplace: Friction from Information Asymmetry

A fundamental inefficiency within the Australian real estate market is the pervasive lack of transparency, particularly concerning pricing and negotiation. This opacity creates significant information asymmetry, where industry professionals hold a distinct advantage over consumers, leading to stress, uncertainty, and suboptimal outcomes.

A primary manifestation of this is the deliberate ambiguity in property pricing. In many markets, a majority of property listings provide no price guide, instead using vague terms like “For Sale,” “Submit Offers,” or “Contact Agent”.⁴³ This practice forces prospective buyers to make direct contact with the agent simply to ascertain a potential price range. This is not an oversight but a deliberate strategy; it allows agents to control the flow of information, capture the contact details of every interested party for their database, and frame the price narrative from the outset.⁴⁴

Even when price guides are provided, they are often a source of friction. While legislation exists in some states to combat “underquoting,” the practice of setting an artificially low guide to maximise interest, only for the property to sell for a price substantially higher than the quoted range, remains a common complaint among buyers.⁴³ This erodes trust and can cause buyers to waste time and money on due diligence for properties that were never realistically within their budget.

The negotiation process for private treaty sales is particularly opaque. It operates as a “black box” where buyers submit offers with no visibility of competing bids. The agent is the sole conduit of information, and their claims of a “higher offer” from another party are often unverifiable.⁴⁵ This environment creates the potential for agents to engineer “fabricated competition” to drive up offers.⁴⁴ This information imbalance places buyers in a vulnerable position, forcing them to make significant financial decisions based on incomplete and potentially biased information, which adds a significant layer of psychological friction to the transaction.

2.3 The Settlement Slog: Systemic Delays and Bottlenecks

The final stage of the transaction, the settlement period, is frequently beset by delays and complications that introduce risk and uncertainty for both parties. While a settlement date is legally agreed upon in the contract of sale, a smooth and timely completion is not guaranteed.

Analysis of transactional data reveals several common causes for settlement delays:

• Financing Complications: This is the most prevalent issue. Delays in the buyer obtaining unconditional loan approval from their lender, or issues with the seller’s bank processing the discharge of their existing mortgage, can easily derail the timeline.⁴⁶
• Documentation and Legal Errors: The conveyancing process involves a complex exchange of legal documents. Simple errors such as incorrect name spellings, missing signatures, or unresolved issues on the property title (like an undisclosed caveat or easement) can halt the process until they are rectified.⁴⁶
• Final Inspection Disputes: The buyer is entitled to a final inspection of the property shortly before settlement. If this inspection reveals new damage, that agreed-upon repairs have not been completed, or that the vendor has not fully vacated the property, a dispute can arise that delays settlement until the issue is resolved.⁴⁶
• Third-Party Bottlenecks: The process relies on the timely performance of multiple external parties, including banks, local councils, and government land registries. Inefficiencies or delays within any of these organisations can create a bottleneck that is beyond the direct control of the buyer, seller, or their legal representatives.⁴⁶

These delays are not merely inconvenient; they can have serious financial consequences, including the imposition of penalty interest for late settlement and, in worst-case scenarios, the termination of the contract. This inherent risk of delay and potential collapse adds a final layer of stress and friction to the transaction process.

The rise of Property Technology (PropTech) has been heralded as a potential solution to the deep-seated frictions within the real estate industry. This section critically evaluates the extent to which technology has successfully mitigated the identified cost and process inefficiencies in the Australian market.

3.1 Innovations Targeting Cost and Transparency

A primary focus of PropTech has been to challenge the high costs and opacity of the traditional model.

• Low-Commission and Fixed-Fee Models: Numerous startups have entered the market with business models designed to reduce or eliminate percentage-based agent commissions, offering services for a flat fee.¹⁴ However, these platforms have largely failed to capture significant market share in Australia. Consumer behaviour suggests a persistent belief that the expertise and negotiation skills of a traditional, full-service agent will secure a higher sale price, an outcome perceived to be worth the higher commission fee.¹⁴ This cultural preference has proven to be a formidable barrier to disruption.
• Direct-to-Owner Platforms: More radical models, such as platforms that enable buyers to make unsolicited offers directly to homeowners, aim to bypass the agent-centric system entirely.⁵¹ These concepts face immense challenges in building a viable two-sided marketplace and establishing the necessary trust for consumers to conduct high-value transactions without a traditional intermediary.⁵¹
• Due Diligence Solutions: A more successful area of innovation has been in addressing the inefficiency of duplicate pre-purchase reports. Platforms like Before You Buy and Streamline Strata have developed a model where a single, comprehensive inspection report is commissioned and then made available for purchase by multiple prospective buyers at a significantly reduced cost.³⁴ This model directly reduces the wasted expenditure inherent in the “buyer-beware” system and represents a clear, albeit targeted, reduction in transactional friction.

3.2 The E-Conveyancing Evolution

The most significant and widespread technological change in the Australian property sector has been the mandated transition to electronic conveyancing. Platforms, with Property Exchange Australia (PEXA) being the dominant operator, have digitised the final stages of the property transfer process, including document lodgement with land registries and the financial settlement itself.⁵³

This shift has yielded tangible efficiency gains. It has reduced the risk of certain manual errors, streamlined the flow of funds on settlement day, and largely eliminated the need for physical, in-person settlements.⁵³ However, the impact has been concentrated at the very end of the transaction. The broader conveyancing process remains a fragmented ecosystem of different software systems for practice management, searches, and client communication. Many firms still rely on manual processes and email for critical tasks, which perpetuates inefficiencies and creates security vulnerabilities.⁵⁰ While e-conveyancing has modernised the final step, it has not yet created a seamless, end-to-end digital workflow.

3.3 Barriers to Disruption and the Persistence of the Status Quo

Despite billions of dollars in global investment, PropTech has failed to fundamentally disrupt the core structure of the Australian real estate industry.⁵⁵ The reasons for this are multifaceted and deeply rooted in the nature of the transaction itself.

The primary barrier is the unique psychological role of the real estate agent. For most Australians, buying or selling a home is the largest and most infrequent financial transaction of their lives. It is an emotionally charged and complex process fraught with risk. In this context, the agent serves not just as a facilitator, but as an expert guide, a negotiator, and an emotional buffer—a high-touch, human role that technology has proven ill-equipped to replicate.⁵⁶

Furthermore, the industry’s fragmentation and the lack of standardised, high-quality data create significant technical hurdles for developing truly transformative, data-driven solutions.⁵⁸

Consequently, the dominant trend in Australian PropTech has not been the disruption of the agent-centric model, but rather the creation of tools that enable and entrench the position of incumbent agents. The most widely adopted and commercially successful PropTech solutions are those that solve problems for agents, not those that replace them. These include Customer Relationship Management (CRM) systems for managing client databases ⁵⁹, VPA financing platforms that help agents secure larger marketing budgets from vendors ²², and AI-powered tools that automate administrative tasks and marketing efforts.⁶¹ In effect, technology has been co-opted by the industry to make the traditional model more efficient for its practitioners, without fundamentally altering the high-cost, opaque structure for consumers. PropTech has thus far been an enabler of the status quo, not its disrupter.

The preceding analysis has deconstructed the various layers of cost and inefficiency inherent in the Australian property transaction process. This final section synthesises these findings to demonstrate how this “Industry Friction” interacts with and exacerbates other known barriers, creating a powerful cumulative handbrake on housing portability.

Aggregating the Frictions

The total impact of industry friction on a household’s decision to move is a combination of three distinct burdens:

• Financial Friction: The direct, out-of-pocket costs are formidable. A vendor faces a near-certain transactional cost of 3% to 5% of their property’s value. For a home at the median Sydney dwelling value of $1.21 million, this translates to a transactional toll of between $36,300 and $60,500, money that is consumed by the process itself and not reinvested into the next property.⁹ For buyers, the risk of accumulating thousands of dollars in dead costs from unsuccessful bids acts as a significant financial deterrent.
• Temporal Friction: The three-to-six-month end-to-end timeline represents a massive commitment of time and personal energy. This creates significant disruption to personal and professional lives and imposes a high opportunity cost, particularly for those needing to relocate for work.
• Psychological Friction: The opacity of the market, the uncertainty of the outcome, the complexity of the process, and the risk of delays or collapse impose a heavy and sustained stress burden on participants. This psychological toll is a powerful, albeit unquantifiable, reason why households may choose to avoid the market altogether.

The Compounding Effect

Industry friction does not exist in a vacuum. Its impact is magnified when considered alongside the other major barriers to housing mobility, namely government taxes and lender policies.

• Interaction with Stamp Duty: Stamp duty is the largest government-imposed transactional cost. When a household decides to move, they must budget for both the industry friction costs on their sale and the stamp duty on their purchase. For a household selling and buying at the median Sydney price, they face approximately $22,600 in agent commission on their sale and a stamp duty liability of approximately $51,000 on their purchase. Combined with other costs like VPA and conveyancing, the total “dead money” required to facilitate the move can approach $80,000 to $100,000. This combined financial burden is prohibitively expensive for a vast number of households, effectively locking them into their current properties.
• Interaction with Lender Policies: The upfront costs associated with transacting directly impact a buyer’s financial position in the eyes of a lender. Funds spent on VPA for a sale, or on multiple sets of due diligence reports for attempted purchases, are drawn from savings. This directly reduces the capital available for a deposit, which can negatively affect a buyer’s loan-to-value ratio (LVR) and, consequently, their borrowing capacity or the interest rate they are offered.

Conclusion: A Powerful Brake on Mobility

The cumulative weight of government taxes, lender requirements, and the deep-seated industry frictions detailed in this report creates a powerful, multi-layered handbrake on housing portability in Australia. This transactional inertia has profound consequences. It constrains the efficient allocation of the nation’s housing stock, leading to under-utilisation of larger homes and overcrowding in others. It limits labour market mobility, preventing individuals from moving to where jobs and economic opportunities are located. Most fundamentally, it stops Australian households from adapting their living situations to meet their evolving needs—whether that be accommodating a growing family, downsizing in retirement, or relocating for personal reasons.

This analysis confirms that industry-specific costs and inefficiencies constitute a major structural barrier to a fluid and responsive housing market. Policy discussions focused solely on tax reform or lending standards will remain incomplete. To meaningfully improve housing portability and affordability, any comprehensive reform agenda must also address the significant and costly frictions embedded within the real estate industry itself.

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