The confirmation of this week’s federal election result now offers a period of stability for property markets nationwide. A decade of political instability, together with some adverse economic conditions, combined to underpin a slow-down in the Australian property market.
It is now clear that policies such as negative gearing and capital gains tax will remain and are unlikely to be modified in the foreseeable future, giving certainty for property investors.
Following the election result the ASX200 rose to the highest levels since late 2007. This clearly shows the markets confidence in the Australian economy moving forward. The market was driven higher by strong gains for the financial sector, with banks and property companies leading the rise.
Added to this, the Reserve Bank is poised to cut interest rates at it’s meeting on June 4 and according to most economists, is likely to do so again later in 2019. The Reserve Bank Governor Philip Lowe said, “This is largely on the basis of an expected pick-up in growth in household income and a stabilisation of the housing market over the period ahead.” Bank regulator APRA’s plan to ease home loans restrictions by dropping the interest rate benchmark for mortgage application assessments which will assist borrowers lending capacity.
While the Brisbane property market is ever-changing, Brisbane Inner City and Southeast Queensland are experiencing significant population growth. Exciting and substantial infrastructure development is both planned and already under construction. It all points to job growth and the need for new dwellings to accommodate increased numbers moving to SEQ. Brisbane’s property market is gaining pace due to affordable entry prices and cash positive investment yields compared with Sydney and Melbourne.
Further post-election positives are a proposed scheme to help first home buyers and federal government commitment to SEQ regional development and Brisbane was awarded the nation’s largest City Deal and funding is offered for a 2032 Olympic Games bid.
According to property observers such as the Commonwealth Bank’s senior economist and AMP Capital chief, the bottoming out of the market is near and recovery is imminent. The SEQ property sector is considered by numerous experts to lead the nation’s next property cycle recovery. Its fundamentals are strong: low rental vacancy, high rental yields, record levels of infrastructure, high interstate migration and a rising housing market. Greater certainty is highly likely to drive a market pick-up and make this a compelling time to invest in property. Confidence and clarity have returned to the Brisbane inner city property market and investing in a post-election atmosphere is engendering certainty and stability.