What does the election result mean for Australian homeowners?
Positive news for sellers and investors
The result of the Coalition being re-elected has removed plenty of uncertainty amongst property owners in Australia. With negative gearing and capital gains tax policies to remain the same, investors can continue to play the property game for the next three years.
House prices were expected to slide if Labor were to succeed in the election. However, with Scott Morrison’s surprise victory, we can now look forward to a more stabilised market. And house we can expect prices to rise in the latter half of 2019. According to CoreLogic data, median house prices already increased last week.
Labor’s proposed changes to negative gearing and capital gains tax were always opposed by the Coalition and had property experts worried about the negative impact on property prices and the overall economy.
Since the Coalition defeated Labor last week, we’ve seen a boost in confidence across the market. Auction clearance rates in bouncing upwards on the first Saturday after the election, hitting an eight-month high. The volume of auctions more than doubled in Melbourne and Sydney compared to the week prior.
If Labor had won, we may have seen see a spike in the property market in the second half of 2019 due to a pickup in investor activity before the negative gearing and capital gains changes came into effect in 2020. Then, we may have seen confusion and uncertainty among investors and sellers. But also a slump in the market following the policy introduction.
However, with the Coalition’s defeat, we can expect a slower, steadier pickup in property prices. We know there are people who have been waiting until after the election to make a decision on whether to sell. The positive shift in auction results reflect an instant boost in the confidence of investors and sellers post-election.
More first home buyers entering the market
The Coalition matched Labor’s 5 per cent mortgage deposit policy towards the end of the federal election campaign. This helps more first home buyers enter the property market.
In the short term, we’ll see more first home buyers able to purchase property. This is also great for sellers.
However, though it may be easier for these first home buyers to get their foot in the door and purchase their first property, they’ll need to ensure they’ve budgeted for increased ongoing monthly repayments and interest paid to the bank.
Thinking about selling?
Now that the election is over and property experts have more confidence in the property market, now could be a good time to speak to a real estate agent. Want to know more about agents in your area? Compare agents including their commission information, marketing strategy, sales history and independent homeowner reviews.