Optimism Returns After Election Result

Posted on 21/05/2019  
Optimism Returns After Election Result

The Federal Election result has created a wave of optimism in the housing market, with two of the major brakes on activity removed by the Liberal Party victory.

Real estate consumers declined to make any decisions or spending commitments in the lead-up to a major election and the prospect of the Labor Party policy on negative gearing created additional uncertainty, which is always toxic to investment.

Real estate experts now believe property markets can return to normal and consumers can make decisions in an atmosphere of political certainty, without fear of unhelpful changes to the underlying rules.

Tyron Hyde, director of depreciation experts Washington Brown, expects to see a flurry of activity from people getting into the market in coming months.

“The election result is the stimulus that investors needed to get back into the market,” Hyde says. “This will be a major catalyst for this to be the bottom of the downturn for markets like Sydney. The slump in the big cities would have been a lot worse if Labor had won and was able to get their proposed changes through the Senate.”

Hyde says the comprehensive defeat of Labor and its policies will mean that the current negative gearing provisions will remain in place for a long time. “I don’t think we’ll see those changes proposed again in my lifetime,” Hyde says.

Tryon Hyde

Mortgage broker Louise Lucas of The Property Education Company says it’s now “full steam ahead” for property investors who were worried about the prospect of a Labor victory and changes to negative gearing.

“Many vendors and buyers were staying out of the market because of the uncertainty and now we can expect them to come back in,” Lucas says.

She also sees “happy days” for mortgage brokers, who were concerned their livelihoods would be impacted by Labor policies.

Louise Lucas

Award-winning buyers’ agent and author Miriam Sandkuhler of Property Mavens says the election result clears the way for investors to get back into the market. “We’re very fortunate that the ALP didn’t win, with the raft of changes they were proposing,” she says.

She says the uncertainty in the lead-up to the election also provides an object lesson to investors to take a long-term view to investment and not be swayed by potential changes.

“The investing rules can change at any time,” Sandkuhler says. “There’s an illusion that the status quo will remain in place, but things don’t always stay the same. My philosophy is that you buy when the bank will lend you the money and take a medium to long-term view.”

Miriam Sandkuhler

Danny Buxton, driector of Triple Zero Property,says the election result means people who have been sitting on their hands will see that nothing fundamental has changed in the real estate market.

“It’s back to business as usual, as there’s some certainty about our tax laws,” Buxton says. “People still have to deal with the tight lending conditions, but there’s some certainty about the underlying conditions and we’re back to where things were six months ago, before we had this discussion about negative gearing. People wanted to wait and see what happened.”

 Danny Buxton

The real estate landscape has been transformed by a series of positive events as outlined by Panel of Partner experts.

 The Election is done
 Labor's negative gearing policy has been dismissed, 
 The lending environment has become easier
 An interest rate cut looms 
 Media coverage has turned positive.

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