Well that was a surprise! The Coalition wins easily after all the polls and bookies had Labor as clear favourites. Sportsbest will especially lament their decision to pay out early on an Labor win costing them $1.3 million!
So what does a Coalition win mean for property?
Investors will come back into the market
Negative Gearing and the CGT discount are now safe which is a massive plus for the market overall and especially for investors. Australia’s property market is underpinned by the tax system and part of the reason why we don’t see the massive losses through our cycles.
With negative gearing and CGT safe, property prices back at more normal levels and likely very close to or already bottomed, there is no reason for investors to sit out any longer.
APRA loosens credit policy
At Nyko Property we deal with buyers across the country every day and our opinion is that the lows we have seen in the property market have been artificially created by the macro prudential controls set by APRA (the bank regulator) rather than negative consumer sentiment. This loosening of credit policy, a significant one at that, will make it easier for buyers to obtain finance.
RBA looking to cut rates
The Reserve Bank of Australia looks like it will miss their headline inflation target of between 2% – 3% yet again this year and are now odds on to cut interest rates in June. APRA’s policy change will give the economy a boost and has given the RBA some breathing room but analysts believe it is not enough to hold off on a rate cut next month.
First home buyers further incentivised
The Coalitions policy assisting first home buyers enter the market with just a 5% deposit is the biggest boost for that group since the introduction of the first home buyers grant in the year 2000. If they can communicate the policy well and make it easy to understand and deliver, this will be a big boost for the market.
With tight housing supply brought upon by a slowing market and tighter credit policy for developers, rising rents and low vacancy rates across many parts of Australia the property market is in typical bottom of the cycle condition.
With prices now at much more realistic levels and with the above changes coming through it is clear that a Coalition victory will offer a big boost to the economy and the property market. If you are an investor or first home buyer looking to enter the market now is the time to start doing your research and take action. Remember, the only time you can successfully pick the bottom of the market is when it goes back up.
1300 720 315