What does the election mean for the property market?
Now that the election is over, what impact will Scott Morrison’s government have on the property market?
Continuation of a familiar government with the promise that the leadership won’t change, should help to instil confidence back into the property market. We are still experiencing good buyer activity in Brisbane’s inner-western suburbs, with multiple offers on properties and record numbers through some of our open homes from last Saturday.
Below, we round up some of the Coalition’s main commitments impacting the property market.
5% Deposit for First Home Buyers
In his election campaign, Scott Morrison announced that the Coalition would implement a First Home Loan Deposit Scheme to help young Australians get into their first property sooner. The initiative recognised that first home buyers were finding it harder and harder to save for their 20% deposit and were struggling to get their foot into the property market.
The scheme, which will come into effect as of 1st January 2020, allows eligible first home buyers to purchase a house with a deposit of only 5%, where previously they would have required 20%. On a $350,000 loan, that reduces the deposit from $70,000 down to just $17,500.
Under the scheme, first home buyers will also be safeguarded from Lenders Mortgage Insurance. Generally, mortgage insurance is applied to high risk loans where the deposit is less than 20% and can often cost between $10,000 to $20,000.
Every Day Aussies Benefit from Negative Gearing
Labour’s plan to scale back tax incentives on negative gearing and capital gains has been avoided with their defeat in the election. There appeared to be a misconception that negative gearing concessions only benefited the rich, who boast large property portfolios and strong wealth.
However, we know this not to be true. Most families who own an investment property, have just one. They are every day, hard working Australian’s who are investing in their future, with the negative gearing policies enabling them to offset some of their expenses.
Mortgage Brokers Create Competition Among Lenders
Mortgage Brokers play a vital role in the property market. They stimulate competition amongst lenders and deliver better consumer outcomes for Buyers and Sellers. According to Treasurer Josh Frydenberg, almost 60% of all residential mortgages are settled by Mortgage Brokers.
In the hand down from the Banking Royal Commission, Hayne called for the abolishment of trailing and upfront commissions for brokers – a move that would have had a devastating effect on home loans, eroding competition and strengthening the monopoly of the big banks.
Thankfully the Coalition has decided against this recommendation, with Frydenberg recently announcing the government would instead review Mortgage Brokers operations in three years’ time.
Free Local Market Report | 2019
Understanding the market you sell in is a major consideration when putting your property up for sale. Our complimentary Local Market Report provides residents with a detailed look at property values and trends we are currently experiencing throughout Brisbane’s inner-west.
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