What does the 2022 election result mean for the property market?
The results are in, and at 9am this morning (Monday 23rd May 2022), Anthony Albanese was sworn in as the 31st Prime Minister of Australia.
While it is currently unclear as to whether or not Mr. Albanese will be in a position to form a majority or minority government, what it does mean is the at the we now have a degree of certainty in terms of what the election outcome is likely to mean for buyers moving forward.
The fact of the matter is that it seems that this election has not impacted on the property market in the same way that the 2019 election did. This is due to the fact that party policy, with the exception of some of the minor parties, does not vary greatly, and as a result, buyers generally did not have any major concerns in relation to policy this time around.
In fact, data from Ray White shows that buyer sentiment largely did not change during the election campaign, with numbers remaining fairly consistent through open for inspections and with auction campaigns also displaying fairly consistent results.
The new Labor Government has promised a raft of stimulus and general policy positions in relation to housing affordability, including:
Help to Buy
Anthony Albanese pledged that a Labor government would cut the cost of a mortgage by up to $380,000 for some eligible Australians under its Help to Buy scheme.
The program involves the Labor government providing eligible home buyers with an equity contribution of up to 40 per cent of the purchase price of a new home and up to 30 per cent of the purchase price for an existing home.
Buyers will be able to purchase a property that they intend to live in with a deposit of as little as 2 per cent. Participating lenders finance the remainder of the purchase.
During the period of the loan, the home buyer is able to buy an additional stake in the property when they have the means to do so. Before that point, they will not have to pay rent for the portion of the home owned by the government. The government would recover its equity and its share of the capital gain when the house is sold.
National Housing Supply and Affordability Council
Following calls from housing advocates across the country, Mr Albanese pledged to establish a National Housing Supply and Affordability Council to address the two, interrelated issues.
The Council will reportedly be composed of experts from the finance, economics, urban development, residential construction, urban planning and social housing sectors.
The Council will work closely with states and territories on setting targets for land supply, in consultation with States and Territories, and play a key role in developing Labor’s National Housing and Homelessness Plan.
Regional First Home Guarantee
Under an expansion of the First Home Guarantee, the Labor party has promised to help 10,000 regional Australian families a year buy their first home.
The scheme aims to triple the number of places that Australians living in regional areas received last year under the current FHG scheme.
Places will be reserved for Australians who have lived in the region in which they apply from for more than 12 months. It will see approved applicants purchase a home with as little as a 5 per cent deposit, without needing to pay Lenders Mortgage Insurance (LMI).
Price cap reviews
Continuing on from the Labor party’s planned expansion of the first home guarantee, the party also promised to conduct six-monthly reviews of the scheme’s price caps in both the capitals and regional areas that determine the maximum price an eligible applicant can pay for their new home.
Labor backed down from its earlier proposed changes to negative gearing in July 2021, promising to “maintain existing regimes for negative gearing and capital gains tax” during the party’s tenure in power following the 2022 election.
In general terms, the period after a Federal Election results in a return to normality. We expect this to especially be the case this year due to the lack of impact this election has had on buyer/vendor sentiment in the market place.
Expectations are for a return to a fairly traditional winter selling season, where stock levels & buyer activity is usually lower compared to the Spring and Summer months. We see this is an opportunity for proactive buyers to ramp up their search and attempt to gain access to "off market" listings, as agents begin to target properties with a view to bring them to market in Spring and Summer.