Outlook on the Property Market Post Election
Australia has voted and we now have more certainty on our future, at least for the next 3 years. So what does this mean for the property market, and what positive influences will the Government bring?
1. More Opportunity for First Home Buyers
First off, is the plan to introduce the ‘First Home Loan Deposit Scheme’, providing low deposit financing.
As part of this scheme First Home Buyers with a deposit between 5% – 20% will not have to pay Lender’s Mortgage Insurance.
The criteria for accessing this support is capped for those earning $125,000 or less or $200,000 for couples if they are both First Home Buyers.
This will not only save First Home Buyers money but it will enable them to get on the property ladder sooner.
It could save new buyers 50% of the time it would have taken them to save for a deposit previously.
The scheme is set to support up to 10,000 new home buyers.
2. Stability for Investors
Negative gearing is here to stay, under the current Government. This will, arguably, assist in keeping the housing market more stable.
Under Labor, there would have also been changes to Capital Gains Tax (CGT). They proposed a 25% reduction in the CGT discount, which would have made it less enticing for investors.
The Government stated in its election plan that it not only wants to support First Home Buyers but also to help Mum and Dad investors. ‘Mum and Dad property investors’ assets are protected’.
Changing negative gearing and CGT could discourage investors and lead to house prices dropping at an increased rate.
3. Growth in Infrastructure
Pledging $100 billion into infrastructure projects across the country, the Government has a strong plan to increase jobs and boost the economy.
This consists of a ten – year plan with projects from new rail connections, a new airport in Sydney and improvements to roads and bridges.
State Spending Initiatives
View the Liberal Budget 2019 site for full details on the infrastructure projects and spend.
This plan will see reduced congestion and improved connections between our towns and cities.
By building new schools, hospitals and transport connections the Government will encourage the development of new communities.
As such, developers will be encouraged to build more housing in these areas as there will be more demand for their product.
Releasing Commonwealth land for development will also provide new opportunities for developers buyers and investors.
In addition to this, they will invest in research to plan housing demand, supply and affordability, so that it can cater for Australia’s future housing needs. This is a positive sign for the future and stability of the Australian Housing Market.
With another interest rate cut looking likely, paying a mortgage is becoming even more affordable. This teamed with the 3 factors above will make it more appealing to buy and sell property.
