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The re-election: What does it mean for you?

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Well, the election is now over, the results are in, and we know that Scott Morrison will remain as Prime Minister. However, another win for the liberals does pose the question: What do the results of this weekend’s federal mean for you?

Read on to find out what you should expect under the Coalition Government.

The stability of the government and the fact that there are no changes to negative gearing or Capital Gains Tax will encourage both new home-owners and investors. The market hates uncertainty, and the Coalition win should return confidence to our property markets, which could well turn around by the end of the year. However, it should be noted that the timing of the bottom of this downturn will, depend upon the banks loosening lending restrictions and when any interest rate cuts occur– the first of which seems likely next month and deliver a boost to our languishing markets.
The market is set to bottom out reasonably soon. The 15% peak-to-trough price forecast will soon be achieved. Reforms to negative gearing and the capital gains tax off the table, a likely interest rate cut on the horizon and a scheme to encourage first-home buyer activity, means that it is a reasonable assumption that prices will not fall much further. As such, it is an excellent time for first home buyers to enter the market, especially in popular areas such as North-west Sydney, before prices start to increase once more.

Some of the suspected threats to the property market are starting to subside, with affordability improving and the uncertainty about negative gearing and the capital gains tax has been removed. Tightening of credit conditions won’t get much worse, and at the same time, we haven’t seen the panic-selling. More intensive support is on the way for first-home buyers along with RBA interest rate cuts, meaning the market could end up bottoming sooner than initially expected.
There is a range of signs that the market is becoming a safer and more comfortable environment for homeowners and investors alike. Auction clearance rates are improving, and buyers are back in the market. Particularly first home buyers encouraged by incentive packages, but also established home buyers and investors.

There has been some confusion surrounding the differences between Labor and the Coalition, especially surrounding how they plan to support first homeowners. Labor’s proposed changes to negative gearing and the capital gains tax discount would have removed concessions for investors, which may have created a more level playing field for first-home buyers. These changes aimed at improving housing affordability will not go ahead under the Morrison government. Instead, first-home buyers will have access to a loan scheme, enabling them to purchase property with a 5 per cent deposit.

It is expected that this policy will bring forward some first-home buyer activity, but that its impact will be limited as it is capped at 10,000 loans a year and requires a higher debt-to-income ratio. Furthermore, the government will transform the scheme into a grant, which could provide more of a stimulus to the lower end of the market. This could help in a cooling market when there was concern about the broader impact a downturn could have on the economy.

Investors can now be confident that the market will improve, because of the stronger market curiosity exhibited by the community, which has been reflected by increased auction attendances. Conversely, if Labor won and the negative gearing and capital gains tax reforms had passed, it is possible that the current downturn would have been heightened and at the least, it would have created confusion, concern and uncertainty.

For some, this might seem like an information overload. That is where My Vantage comes in. We make it our duty create only the most beautiful homes, of extremely high quality and at the most impressive prices within the North-west Sydney region. Furthermore, we provide only the best advice to investors looking for house and land packages, so that they can continue to benefit and make the returns they want. Contact My Vantage today if you want to learn more about any new changes. Furthermore, if you want to take on the incredible opportunities presented within the property market, get in touch. Before you know it, you could be living the life you have always imagined.

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