Since the election was called on April 10, speculation has been rife around how such a politically charged election could impact the property market.
Since COVID-19 we have seen dramatic shifts in property prices and the general migration trends across Australia. Now with record enrolment numbers announced by the Australian Electoral Commission, it is apparent that people are ready to make their vote count. A topic that many have been passionate about and has garnered significant media attention is the issue of the Australian property market. With the election campaign well underway, how does the outcome impact the property market?
Counting down to the election
People will often feel hesitant to list their home for sale or rent prior to a federal election. So, the time between when the election has been called to the day of voting will be a period of limbo for many. However, this reluctance could play out very differently, compared to the previous elections. This isn’t going to be the same election period we experienced in 2016 and 2019. As a nation we have lived through a long period of uncertainty, but we now appear to have a greater level of assurance as we emerge from COVID-19. Experts predict this will translate through to the property market, with confidence remaining steady for buyers and sellers.
Current Trends
In the lead up to the 2022 Easter long weekend there were reports of escalating auction figures. This culminated in auction markets across the country recording their busiest Easter week of activity on record. Property Insights company CoreLogic reported 926 homes taken to auction across the combined capital cities. A year-on-year increase, compared to 845 properties in Easter 2021. These figures are reflective of a busy start to the year with the Australian residential auction market achieving its busiest first quarter on record. Only time will tell whether these figures can maintain their trajectory or will eventually plateau.
The Great Australian Dream
Prime Minister Scott Morrison made headlines in March after commenting that the best way the government can support renters is to help them buy a home. This has been a stance that the Liberals have taken on their plan for housing and home ownership which they have dubbed, “the great Australian dream”. The Coalition Government have taken the approach to implement policies that support first home buyers, infrastructure, and development. Their re-election promise is to:
- Help more first home buyers get over the deposit hurdle by raising the number of low-deposit guarantees for first home buyers to 35,000 each financial year.
- Deliver increased property price caps for the Home Guarantee Scheme, to ensure Australians can continue to have choice when purchasing their home.
- Increase the supply of new homes in regional areas by incentivising the purchase of new-build homes – providing 10,000 low deposit guarantees each financial year for those moving to, or within, regional areas. This includes non-first home buyers and permanent residents.
- Expand home ownership opportunities for single parent families by increasing the number of low deposit guarantees for single parent families to buy a home (with a deposit of as little as 2 per cent) to 5,000 each financial year.
- Support greater investment into affordable housing with an additional $2 billion in low-cost financing for social and affordable dwellings. This brings total low-cost financing to $5.5 billion, supporting around 27,500 dwellings.
Safer and More Affordable Housing
Labour has founded their election promises to build more social housing, upgrade existing housing, and make home ownership possible to all Australians. Their campaign promises focus on:
- First Home Buyers support scheme will help 10,000 first home buyers a year in regional Australia to buy a home.
- Creating the $10 billion Housing Australia Future Fund which will build 30,000 new social and affordable housing properties in its first five years.
- Each year investment returns from the Housing Australia Future Fund will be transferred to the National Housing Finance and Investment Corporation (NHFIC) to pay for social and affordable housing projects.
- In addition to the above, a portion of the investment returns will be available to fund acute housing needs on an ongoing basis.
Where to from here?
Both major parties have taken a position on ensuring that more renters can consider buying their own home and benefit from the security of home ownership. However, where the Liberals are squarely focussed on maintaining this agenda, Labour are positioning themselves as the champions of social and affordable housing. Despite the policies of both major parties, one thing is undeniable – the cost of living is steadily on the rise in Australia and worldwide. Disruptors occurring in the wider world and natural disasters closer to home have played into this increase, with economists predicting expenses continuing to rise. The latest February data released from the Australian Bureau of Statistics shows that monthly household spending has increased 7.7%, compared to the same time last year. This means that for consumers, the hunger to invest in property might be there but it might simply come down to housing affordability and their access to financial support- both of which are on offer from the major parties. From the 21st of May, we will see where the results of the election will lead.
