Election Results and Potential Influence on Property Markets

Curious what people perceive will be the potential impact of what now looks likely as an ALP election win? Any direct flow on for property markets either generally or specifically by location or property type? Go

 

Superannuation funds will breathe a sigh of relief

 

It’ll be interesting to see how long Albo is in top job before Plibersek or Chalmers roll him (!)

More seriously, they’ve been pretty clear that tax reform of the sort taken to the last election is off the table (for now), and with declining metro prices - particularly in the more affordable brackets - I’d see less pressure to address affordability by whacking the soft target that is investors.

I’d think that rising rents and potentially diminishing investment stock of the type people want to rent (because it’s been sold to OOs and investors haven’t been as active in aggregate for years since APRA) might also take the target off our backs..for now.

 

In fact, I think the prices aren't declining in the affordable brackets if you have been observing Sydney market, for example. Affordability in Sydney, Melbourne and Brisbane is still a pressing topic that they will need to address. No wage rise has made income to house price ratio worse. Either income has to go up significantly across the board (which is less likely) and inflated cost of living needs to come down, or the property prices need to go down for the show to go on. Doesn't matter what tools the new government wants to fix the situation.

Also, talking specifically about lending space, Royal Commission and APRA's tightening have kinda proven to be ineffective in the long run since banks were made to follow those guidelines for a short duration and now they are back to the rogue business. There needs to be a more effective and long-lasting strategy to make lending and property prices sensible.

 

Think of the suburbs where people on family income 120k want to buy property … probably those suburbs will have a bit of demand for sales when the new policy is implemented…

 

Much of the same.

You look at how many Labor governments have been in power over the decades.

Then look at RE trajectory.

It would be delusional to conclude that the current ALP mob will magically destroy property investment.

 

The Greens hold the balance of power and have plans to put in rent control along with remove NGB for 2nd and 3rd investment properties.

Labor are directly addressing the issue of unaffordable housing too.

Overall a great result for the Australian people

 

We don’t know much about Labor way of governance as they only governed 6 out of last 26 years.

However my general expectation would be:

1) some taxes to increases
2) govt expenditure to increase
3) unemployment rate to go up (due to higher cost of business under labor).

Specific to property:

- I expect national prices to flatline for next 3 years with some declines in Sydney and Melbourne
- Some momentum around NG abolishing
- Stricter rental legislations which would lead to higher rents (costs of being a landlord would significantly increase, no questions about it)

 

Will be interesting to see how the bottom end of markets within the price caps of the labor policy go.

You will see developers targeting sites for creation of new unit and townhouse stock with target prices for dwellings at the level of the cap. Similar for outer suburban H&L packages. Floor under prices for existing homes and units within the caps?

Helping More Australians Into Home Ownership



6-12 months for the scheme to be implemented?

 

Can’t forget during Covid when the Green Party in Queensland drafted a bill for rent control and removal of landlord rights to evict tenants.

Labor will now be taking note. I’m worried as a landlord so will probably be selling

 

I think this is something we will begin to see a bit more of. The current generations are sick of housing being seen as speculative investment for one person to get rich off of another and have voted with their feet yesterday!

Every human has the right to stable housing, if that doesn’t fit your investment mandate there is plenty of money to be made in commercial or equities!

 

I am getting sick of this housing affordability propaganda and it’s completely wrong on so many levels.

All the youth complaining that they can’t afford to buy is them complaining they can’t buy in the same suburbs their parents raised them. Guess what when their parents bought 40 years ago, they bought where they could afford not where they wanted to live. All these prestige $2m suburbs were highly undesirable 40 years ago.

Stop letting politicians fool you - buy asap where you can afford and work you way towards where you want to live.

A four times labor MP from Sydney was very vocal about housing affordability until someone pointed that she and her husband owned 7 investment properties in Sydney alone in their own names so if you are expecting politicians to solve your housing affordability myths, you will be waiting forever.

 

Is the average full time wage (if you can get full time work) not $90k whilst the median house price is well in excess of $1m in both the major cities (and therefore employment hubs?)

My parents paid $12000 for their first house and my dad was earning around $3000 a year at the time. The same house has just sold for $3.5m a month ago

Those are not myths my friend…. They are facts. There is a problem and it looks like it is finally being addressed!!

 

Nothing drastic will change re property. Too many delusions flying around.

 

We have had similar in WA for a few years now

 

These are 100% myths and very good luck if you truly believe a so called affordability myth is going to be addressed. I am not sure what does it even mean.

When your dad bought at 4x of his annual income, following didn’t exist:

1) your mom didn’t work (majority of Aussie families now are dual income)
2) capital availability was severely restricted (only state owned banks lent you money if they pleased)
3) building costs were lot lower (a lot of people built their own houses). A typical house was no frills 2-3 beds with 100sqm areas. I bet you can find those at 4x multiple of your income even today.
4) and interest rates were way way higher

Do your own math - don’t wait for politicians to bail you out of your imaginary problems. At $90k per annum, you surely can find a safe roof over your family in any Australian capital if you aren’t picky and don’t want fancy new luxurious builds.

 

There is a huge problem, but it wont be addressed by govt. Events beyond govt control need to occur.

 

I think the sentiment alone will be enough for capitals to soften.

My predictions:
- Negative gearing policy goes unchanged
- 40% co-ownership doesn't come to fruition
- Some minor policies about extra taxes or responsibilities for landlords

Personally I hope this means more land released/rezoning and infrastructure in regional centres.

 

Absolutely, market sentiment will change for property investors.

Some will rethink the viability of holding property as an investment with Labor in power. The unknowns. Some will sell stock out of fear, more supply will come to market, in turn further softening

Investors who have been in the game for 20+ plus years, where properties are cash flowing will probably have minimal impact

 

Hi. So you’re saying that kindergarten aged school children looking to buy a house in 15 years when the average house price in Brisbane is at $$2-4m, will be unnecessarily whining about an “affordability myth”?