We’re in an election year, and that often means that buyers and sellers in the property market go to ground, waiting on the election outcome to decide upon their next real estate move.
Here at the start of 2022 we’re riding a wave of record-breaking capital gains growth in property markets around Australia. In fact, driven by low interest rates and an influx of returnees from overseas, property prices increased on average 22% in 2021. This was the biggest jump since the 1980’s.
So, we ask, with this sort of momentum behind the market, is the upcoming election in May likely to change the current status quo in the Australian property market? Will it pour water on what has been a red hot period for sellers?
Housing Affordability
Here at The Henry Wong Team®, we don’t feel that the election should deter sellers from putting their homes on the market. Whilst property is always a key policy point of both parties heading into an election, 2019 showed us that the electorate doesn’t respond kindly to massive changes. Bill Shorten, with his proposed sweeping changes to negative gearing and capital gains tax, lost an election he seemed destined to win.
Both parties will be unlikely to rock the boat then, and Labor shortly abandoned the policies they felt sure would bring housing affordability to the masses.
Housing affordability will still be a key issue, as many Australians are feeling priced out of the housing market. According to BuyersBuyers co-founder, “If the Coalition is returned in government, then we can most likely expect no major changes, but Labor have made some interesting proposals with regards to affordable housing, and at a later point of time could choose to target investors which would in turn dampen housing demand,” he said.
Labor’s changes could have some effect on the fringes of housing affordability, but it’s unlikely they will drastically change things this year.
There Will Always be Buyers
The property market may go quiet for a while over elections, but the truth is there will always be buyers. If you need to sell and move onto the next stage of your life, then that’s what you should do. Don’t let Canberra and the politicians there dictate the moves you make in your real estate choices and your life choices.
Many people reach a stage in life where they simply have to sell. Perhaps you’ve moved states and need the capital from your property to put towards buying a new home. Maybe you’re on the waiting list at a retirement village and a space has opened up for you there. Don’t put these life changing moments off for the sake of politics.
What Other Factors Will Affect the Property Market This Year
20% property growth across Australia is a tough act to follow. Even if that rate of growth slows down, more modest growth can still be seen as a success. Most experts are predicting something of a slowdown in the market, and there are a couple of variables that could results in more considerable changes:
Interest rate rises: Interest rates are at record low and are unlikely to increase in dramatic increments. Even so, changes will have an interesting effect on the market.
Covid Variants: Covid looks like it’s here to stay and it looks like we can and will learn to successfully live with it. It’s an unknown quantity though, and if a severe variant comes along it could have unforeseen effects.
Supply Issues: Australia isn’t an infinitely large real estate markets. Local supply will influence price from area to area.
If you want to chat more about the election and selling your home this year, please get in touch with The Henry Wong Team®. Henry would love to chat about the local and national market, and where things could be headed from here. Give him a ring on 0412 471 588.
