In the past the property market has proved it could make or break the outcome of a Federal election. On this occasion both campaigns dangled plenty of housing affordability carrots before us, so whichever way the pendulum fell would result in some extra movement in the market.
Along with our first interest rate rise in more than a decade just weeks out from polling day, the lead-up was always going to make things a little uncertain for investors and prospective new home owners. But amid the prospect of further interest rate rises, neither party flagged any significant policy changes that would scare off sellers or buyers.
There was no mention of capital gains tax reforms or negative gearing bans, with both the Liberal Coalition and Labor more focussed on housing affordability and getting more Australians into their own homes.
Labor promises included a share equity initiative which would give eligible applicants a Commonwealth contribution of up to 40 per cent of the purchase price of a new home, and up to 30 per cent for an established home.
Eligible Australians are those with a taxable income of up to $90,000 for individuals and up to $120,000 for couples who don’t own other properties. And to qualify eligible homebuyers (capped at 10,000 per year) will have to have saved a deposit of 2% and qualify for a standard home loan to fund the remainder of the purchase price.
This would mean that for a homebuyer in Perth, buying at the maximum price cap of $550,000, the saving on a new home would be $220,000.
If the new Labor government follows through with its other scheme to help 10,000 first-homebuyers a year in regional Australia, there could be some movement in WA’s regional centres and towns. Qualified prospective buyers will only need a 5 per cent deposit and won’t have to pay mortgage insurance.
Eligible participants in this regional scheme must have lived in the region for at least 12 months and have to have a taxable income of up to $125,000 per year for singles and $200,000 a year for couples. Existing houses, townhouses, and units will be part of the proposed scheme, along with house-and-land packages, off-the-plan apartments, and land with a contract to build.
Incentives are all well and good, but priority for our new PM will be to maintain control of rising interest rates and the cost of living. Keeping house prices strong is key to this.