Australia has just had the Federal Election, and the results are in with Liberal securing another 3 years term in Australian Government. So how will this impact the South Australian real estate market?
Parking aside the various different issues as to why people select who to vote for in Government, purely related to real estate, it is a really good outcome for the SA housing market.
There are a few reasons as to why it is a positive outcome. Firstly, it is positive for renters as there will be no impact on negative gearing. If the opposition had been successful with their policy to remove it, then it would increase rental prices as there would be fewer investors and therefore fewer investment properties. Property prices were also widely predicted to fall due to less buyer demand for real estate investment in general. We have been saved from this.
Secondly, capital gains tax will also not be affected. The removal would have meant more tax and less profit for people that own investment properties. The consistency of having a known government in place will bring a positive effect to the marketplace. Two interest rate cuts are predicted over the course of the remainder of 2019, so the combination of stability along with interest rates being reduced will be beneficial for the property market.
Thirdly, the Coalition was a reluctant participant in the Royal Banking Commission. It is widely speculated that the Banks will become more liquid in their lending practices. Bank share prices rose sharply today.
Fourthly, the Coalition has promised tax cuts instead of tax increases. This will lead to more money in the pockets of Australians. We spend around 35% of our income on our homes. More money in our pockets means greater affordability to borrow more for our residences and investments.
It is worth noting that any potential pause that can happen in an election campaign for some months afterwards is not going to happen. We’ve seen this at Ouwens Casserly in the first one or two days after the election already. The number of clients who have confidently made the decision to go to market has increased which means positive signs for the Adelaide market in particular.
“Eleven unprompted appraisals came through this morning, OC normally average 1-2 a day. So to get eleven through this morning, it seems like it’s not a coincidence that there’s confidence back in the marketplace immediately preceding the Coalition victory.“ Alex Ouwens, OC Managing Director.
Alex Ouwens and Nathan Casserly have a genuine passion for real estate and love to help people achieve their goals and dreams through property. Find out more about OC here.
Interesting in a career at Ouwens Casserly Real Estate? Check out our opportunities here.
