ScoMo and the Liberals are Back In. How Will this Affect the Real Estate Market?
The Federal Election antics are done and dusted, the bookies were wrong and against the run of play Scott Morrison and his band of Libs have secured another stint in office. Real estate policy was a massive campaign tool, with Bill Shorten’s Labor promising massive changes to negative gearing and Capital Gains Tax discounts. Could this have been the sinking of their election ship?
Possibly.
We’re in an uncertain stage of the property cycle as it is, so these changes would have turned off a lot of Australian voters. The idea of property prices being further forced down, rents going up and the construction industry slowing down began to scare a lot of people.
It helped tipped the scales towards the Liberals, who promise a more careful approach towards policy changes than Labor were proposing. What will this mean for the Australian real estate market now that the election is finalised?
Negative Gearing Staying Put.
Many felt negative gearing changes were going to lead us towards a recession. Now with the changes off the table, that sentiment should dissolve too. We can expect there to be a bit more confidence in the market, with some proclaiming the bottom of the cycle has been reached or will be shortly.
Shares in listed real estate and mortgage companies rose on the election result, and we’re already hearing of buyer upticks in some parts of the country. It’s great to see confidence returning, which will hopefully have a follow-on effect on the economy as a whole.
5% Mortgage Policy
Another key policy that the Liberals introduced late in the game was 5% mortgage deposit policy. 20% deposits are becoming common across the country, so this is a move making it more affordable to get a foothold in the real estate ladder. Coming into effect on January 1st, we’re likely to see more activity in the first home owner bracket as a result.
What Does it Mean for You?
Choosing to buy or sell a home is a hugely personal decision that is dependent on your finances at the time. Do your research on the market and speak to a number of people in the industry about what is the right path to take. As always, Ristic Real Estate is here to answer any questions about buying, selling or renting; or about how the Federal Election will affect the real estate market. Just give us a call.
