The results are in, and to the surprise of most, the Coalition has claimed victory in this year’s Federal Election.
But what does this mean for our property markets?
This week we take a look at the Federal Election results and the impact of the Coalition’s victory. We examine some of the big wins for Aussie first home buyers and investors, and what we have to look forward to as we charge into the remaining of 2019.
Will Things Improve In 2019?
With the stability of government and no changes to negative gearing or the Capital Gains Tax, our housing markets are likely to pick up by the end of 2019.
Sure, some of our markets are still in the slump phase. But the good news is that we were seeing signs of improvement before the Federal Election:
- The rate of property price decline easing
- Auction clearance rates improving in Sydney and Melbourne, albeit on much lower volumes
- An increase in first home buyer activity, with many encouraged by attractive incentives and the promise of a first home buyers (FHBs) scheme
These, coupled with some pretty great election wins, are fantastic reasons to remain optimistic about our property markets.
The Big Win For First Home Buyers
The latest in a long line of pre-election promises, the Morrison Government has promised to assist FHBs by allowing them to buy their first home with a deposit of only 5% without having to take out Lenders’ Mortgage Insurance.
And while the Liberal Party believe the policy will “make a huge difference” in helping people get “their first leg on the first rung” of the property ladder, experts are warning that this policy creates potential risks around lending to households with a smaller deposit and no savings discipline.
While most of the scheme still remains unclear, it’s likely that FHBs will still be required to meet the bank’s current strict lending criteria.
The Big Win For Property Investors
With so many investors relying on the tax benefits of negative gearing, Saturday’s election results were a huge confidence boost.
In fact, Queensland saw buyer activity increase dramatically almost immediately after the election results were announced.
The problem with negative gearing is that many Australians only a vague idea of how it actually works. They blame negative gearing for virtually everything that is wrong with the property market.
At Adpen, we disagree. We would argue that property investors provide an essential service to millions of Aussies who chose to, or have to, rent their accommodation. They’re people who should be treated like all other business people.
The fact that negative gearing tax benefits remain and there is no increase in Capital Gains is a good thing. In the long run, this will encourage investors to return to the market.
And the fact that investors will still be able to buy properties in their Self-Managed Superannuation Funds will help many Australians get ahead and set themselves up for retirement.
And What About Home Owners?
While some homebuyers have struggled to get finance, others have held off, waiting for the uncertainty to clear.
As our markets begin to turn later in the year (and the media begin publishing more positive headlines), homebuyers will regain confidence and return to market.
As this occurs, home sellers who are looking to upgrade or downgrade their homes will return to the market.
It looks like we’re in for some good times in property ahead.
Still Unsure About Our Property Markets?
Book in a time to chat with the experts at Adpen! We’d love to support you on your journey and guide you through the maze of property.
