With the Australian election just around the corner, many people are wondering what it will mean for them. This article discusses how Election outcomes could impact your property market, and offers some advice on what to do with your investments in light of this uncertainty.c
The market has been on a rollercoaster ride but it seems to be settling down. Although the downward trend is slowing, property values have still fallen since last month and are at their lowest level in three months. But this could just mean that we’re nearing the end of these fluctuations rather than being grounded into any patterns yet. Over 5 years ago, most home owners were sitting pretty with properties up by nearly 16% over 5 years!
The impact of the Federal election has seen a number of people put major spending decisions on hold. Certainly, figures from REIA show that fewer people took out home loans in February this year as buyers take an ‘wait and see’ approach to the upcoming elections.
The past is an interesting place. What have we learned from what has happened in the past? Well, for one thing it’s that property selling can be affected by Federal elections timing depending on when they’re held. For example, back in 2007 our recent election was late November which meant most people were not going to sell their properties because of how strong prices had been up until then and during the lead-up as well – this despite a rate hike just before Election Day!
What are the differences this time around? One difference is that property tax reform will have a direct impact on rental markets. For instance, if Labor wins and implements their policies to limit negative gearing for new properties while reducing capital gains taxes on investment properties held more than one year from 50% to 25%, then rents could rise as people with more expensive investments sell those off in order avoid high taxation rates or find renters who can cover mortgage payments without using depreciation benefits granted by landlords.
How might rent prices change because of these proposed changes? If you were thinking about buying an apartment but think it may be too pricey now due to higher interest rates, wait until after the election – there’s no telling what’ll happen! However much they cost before.
Some pundits are tipping that this could see a property market rally as investors rush in to take advantage of negative gearing while it’s still available on established properties. But, Labor has had some positive views towards the idea and if they win power after the election then we may be seeing more changes made soon. The Coalition government hasn’t introduced anything new related to property though with just funding for affordable housing being announced within its budget which is likely not enough given how expensive Sydney’s real estate prices have been recently.
Why now is a good time to buy opportunities. Unemployment at just 4.9%, and there are fewer foreign buyers to compete against on top of all this, significant numbers of lenders have recently announced rate cuts particularly for fixed-rate home loans if you’re on a tight budget Aussie’s latest report the affordable suburbs will show what -and where- you may be able find something that suits your needs