You’re probably sick of hearing about it.
You see the ads on TV. You hear about it on the radio as you drive to work. Your colleagues brought it up in a recent team meeting.
It’s all anyone can talk about!
Tomorrow’s election is going to have a major impact on our property market over the next few years.
And no matter where you are on your property journey, it’s going to impact you.
Today we’re diving into the impact of tomorrow’s Federal Election on our property markets. By the end of this post, we hope you’ll have a better understanding of the political landscape, what we could expect under each major party, and what has some experts concerned.
If We Re-Elect The Morrison Government…
… it’s likely our housing markets could pick up again by the end of the year.
Sure, some of our markets are still in the slump phase, but we are starting to see signs of improvement.
Despite stricter lending criteria and doom and gloom reports of property values falling by at least 40%, we’re seeing:
- 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 scheme
The property market hates uncertainty, and a Coalition victory could return some confidence to our markets.
If We Elect A Labor Government…
And with so many investors relying on negative gearing tax benefits, we’re anticipating a mad rush to buy property before the end of the year.
Since investors tend to buy established properties in the $400,000 – $900,000 price range, implementing these policies could also result in a boost in property values, especially apartments, in many inner city suburbs in the second half of 2019.
This jump in buyer demand could also mean that property prices could fall in these same suburbs in the first half of 2020.
And What About The New First Home Buyers Scheme?
While both parties 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 may not be all it seems.
RateCity research director Sally Tindall disagrees with the new scheme. She argues that the new policy will cause first home buyers to pay “thousands more in interest to the bank over the life of the loan”. Her latest estimates show that buying a $500,000 property with a 5% deposit will cost an extra $58,774 over the life of a 30-year loan.
Whether this policy will be implemented post-election remains unclear. If delivered as promised, the first-home loan deposit scheme will be popular with first home buyers looking to make their first property debut.
The Bottom Line
Property is a long term game.
And above all else, our growing population and our nation’s wealth have always driven long term property values.
Australia’s property markets have proven its resilience time and time again. They have survived periods of high inflation and high interest rates. They have weathered the storm of the 2008 Global Financial Crisis, and witnessed too many Prime Ministers to keep count.
And in the long term, property investors will always return and invest in property. Besides, it is the most stable and sound investment vehicle available.
Considering investing in property?
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