As the evidence clearly shows, Australia is a wonderful country in which to be a property investor.
Our country is safe and peaceful. Our political and banking systems are stable. The economy has historically grown over the long-term. And property prices have historically increased over the long-term.
The long-term trend is clear, whether Labor is in power or the Coalition.
So, in one respect, Anthony Albanese’s election win is unlikely to matter much for Australia’s property markets, whether he turns out to be a good, bad or mediocre prime minister, because history suggests prices should grow handsomely over the long-term.
In the short-term, though, Labor’s return to power might have some impact, because the ALP is planning to introduce two policies that could (indirectly) benefit some property investors.
1. Help to Buy
Help to Buy is a shared equity scheme under which the federal government will help you buy a property sooner, by reducing your deposit requirement to just 2% and by taking an ownership stake in your property (up to 30% if you buy an existing home or 40% if you buy a new home).
However, to qualify, you can’t own any other properties. Also, you’ll have to live in the property initially – although, in the future, you could buy out the government’s stake and convert the home into an investment property.
2. Regional First Home Buyer Support Scheme
The Regional First Home Buyer Support Scheme is a program under which the government will help regional first home buyers buy a property in a regional location with just a 5% deposit.
Again, you’ll have to live in the property initially, although it could be converted into an investment property in the future.
Few buyers will have access to Labor’s new schemes
Bear in mind, though, that these ALP programs will play out on the margins.
That’s because they will be open to just a combined 20,000 buyers per year. By contrast, there were more than 700,000 buyers in the year to April, according to the most recent home loans data from the Australian Bureau of Statistics. So Labor’s programs are likely to affect about 3% of buyers, and therefore have a minimal impact on the market.
What will have a much bigger impact are the fundamentals of Australia’s economy and society. And as we explained earlier, those fundamentals are strong.