Market impact of a liberal win

Hahahaha I went in pretty hard on libs too. Got in at 4.75, then 5.75, then 7.50!!!

 

Nah, now watch Brisbane BOOM

 

I think the election result is proof of how much the media affects sentiment and sways the opinions of the 'experts'......but not the outcome.

A familiar parallel to today's housing market perhaps.

 

Both major parties internal polling was a lot closer to the outcome than mainstream polls especially in Queensland

 

From todays Fin Review:

Labor loss to deliver a positive property 'shock'

Expect a rebound in Australia's property markets - that's the view from economists and the industry following Labor's failure to win the election and implement changes to negative gearing and capital gains tax discounts.

Goldman Sachs economists are forecasting a "moderate positive shock to sentiment in the corporate sector and a more meaningful one in the housing sector".

The Property Council of Australia said the election result showed that Australians had "rejected risky taxation changes at such an uncertain time in the property cycle."

... read more​

 

How to identify good LICs?

 

I would probably start here:
Beginner's Guide to Investing in Listed Investment Companies [LIC & LIT]

 

Would like to believe this but the single biggest factor that killed the property market is, and always will be the APRA changes.

 

good to see some positive on housing. however the waiting on sideline investors would receive a shock when they go out to banks for a loan. i would see a short spike and then stable prices going ahead.

 

Does that mean Labor's negative gearing and franking credit policies are dead?

 

I can't see them coming back anytime soon.. 6 years minimum if not longer. They can't just keep returning the same (what turned out to be) unpopular policies and expect to get in.

Here is an article in the wash up for the 2016 election: The real reason Labor didn’t win

Dead, buried, gone.

 

There is one view that labor would have ended up with less than 50 seats if they hadn’t campaigned on targeting the higher end of the town. They really have nothing else left so I wouldn’t be surprised if they keep taking same policies to election over and over again. Like greens, labor are deeply tied to their particular social equality agenda. It’s no coincidence that labor has only been able to form just one majority government (2007) in around 30 years.

 

As dead as a rabbit in a grave from 1906. RIP for a veeeery long time.

 

Labour should have just pushed wage growth from the bottom up as the main agenda. Sell it as helping business as people will spend more, stabilising the housing market and making it easier for young people as they are the ones most likely to be on low wages. Would have gone back to labour’s fundamentals and won many voters. Instead they ran negative policy and campaign by talking about what they wanted to take away from people.

Also don’t believe the association with the greens helped their cause at all, in general low wage earners and blue collar types are the demographic that labour seeks, greens policy is likely to hurt those people more than any other party

 

I have said it all along and still maintain that the election uncertainty was the last hurdle for the declining property market to find the bottom. I am not expecting an instant recovery but like anything in a few months when the dust settles the job should be done.

I know some people still argue unless credit is returned the market will keep falling but i disagree with this. APRA eliminated an average 10-20% from majority of peoples capacity, the same as the main markets have fallen by. This means people should now have the capacity to purchase at the new ceiling. This means don't expect prices to increase but do expect them to stop falling.

I feel people don't quite put enough weight on the power of the media and how scared a lot of waiting buyers have been with the uncertainty of HUGE tax changes on property.

 

Exactly. About as much chance of this being raised again by the ALP, as there is the Liberals talking about the GST implications of a candle on a Birthday Cake

 

I know a couple clients were planning to hold off buying for 12 months with the expectation of change of government. Might shoot email through and see what's the game plan now

 

Imho Bill Shorten has inadvertently done the coalition a massive favour. His agenda that's been spectacularly defeated will have some very long term ramifications for other ALP leaders wanting to slug the average Australian.

Going after retirees and a large segment of society and their aspirations is a call for them to defend from an existential threat. Bill was cocky and thought his win was in the bag and tried to shove in alot of his socialist ideas and hoped Australians werent smart enough to catch on. He was dead wrong. And Australians from all walkes of life proved that with their vote loudly and clearly.

 

Side point - I think Bob Brown and his convoy are probably off the Shorten's Chrissy card list..

 

Gotta say, I find it very hard to see the market bottoming out just because of the Liberal win.

The single biggest lesson I saw during the crash in Ireland was the government can do nothing to stop the market doing what it’s going to do. In Dublin there was too much stock, lending tightened, nobody wanted to buy so developers gave all sorts of increasingly crazy discounts. Government meddling did nothing.

The possibility of negative gearing and CGT being changed a year or so down the track if Labor won was never what was driving the market down. It was grandfathered, it didn’t apply to new properties which is where most new investors buy (especially in terms of apartments). It didn’t cause a 15% drop in Sydney, or a 10% drop in Melbourne. That happened because of tight lending and very high supply which hasn’t gone anywhere and isn't going anywhere soon. The problem is not enough people can borrow enough money to invest.

If negative gearing played a role in price falls, we would have seen floods of people trying to scramble to buy before the changes, and that just didn’t happen. Investor numbers kept going down and the market barely rallied even during the peak season.

The Liberals winning now, in the long term, is probably going to be a disaster for investors. Australia is almost certain to go into recession soon, especially with unemployment rising, trade wars, China stumbling, we're very overdue too. This isn’t a problem on its own, recessions happen, but the party in power is going to cop the blame for years as it always does. If the downturn continues and the economy goes bad, Labor will almost certainly swan in for the win next time, and will get the credit for “fixing” the economy when it naturally recovers. This was not a great election to win.