The results are in:
Changes to the negative gearing laws will not be going ahead.
According to The Real Estate Conversation, the property market breathed a collective sigh of relief on the news of the Coalition win in the Federal election. After months of campaigning by the Real Estate Institute of Australia, the uncertainty of the effect of these potential changes is over. The REIA however has been heavily criticised for using scare tactics to influence voters. Dodgy tactics or not, the REIA is claiming the campaign reached over 10 million people. Was it a primary reason for the unexpected Coalition win?
Domain reports a similar kind of sigh of relief from the property market, quoting AMP capital chief economist Shane Oliver and Domain economist Trent Wiltshire, anticipating an earlier return to a bullish market. Pragmatically, Mr Wiltshire is reported as predicting that market activity “was always likely to pick up post-election as buyers and sellers would have more certainty on housing policy.”
Less based in feelings and more in data, the Core Logic monthly report with Tim Lawless demonstrates that overall the market appears to be continuing its slow recovery regardless. In the week before the election, he says:
“Another indicator of a subtle improvement in the housing market can be seen in auction clearance rates that are holding around the mid to low 50% range, albeit on low volumes relative to a year ago.”
Lawless goes on to suggest that this shows that buyers and vendors expectations are finding a stronger common ground. Since the beginning of the downturn almost 15% has been wiped from Sydney’s property values, and signs point towards the possibility of a further equilibrium being reached. April final results showed the downturn in values has slowed for the 4th consecutive month.
Interestingly, in the same monthly report, Lawless also shows that the value of new housing commitment for February has kicked up slightly, indicating that the tighter credit limits and scrutiny around debt levels which have been reported widely as having a negative effect on housing affordability (on the back of the Banking Royal Commission) may also be reaching a new equilibrium. He says the ABS are likely to report this in their next quarterly report.