The return of the Federal Liberal Government is highly likely to benefit our property market. Not only do we avoid the significant disruption that Labor’s proposed changes to negative gearing and Capital Gains Tax (CGT) would have caused, we get the stability and continuity of national economic policy.
The Liberals have a track record of good economic management and their return to government will breathe some confidence into the property market. It’s not going to immediately reverse the current downward trajectory of prices, which is being driven by credit restrictions, but it will inject confidence.
The property market always takes a pause in the lead-up to federal elections. This is because buyers and sellers don’t like uncertainty when they’re making major financial decisions. Hopefully, the instability within the Liberal party is over and this win will see Scott Morrison running the country for the next three years with the same conservative economic agenda.
This will please most participants in the property market. Whether you support Liberal or Labor or some other party, I think we can all agree that stable management and economic growth is good for home prices. It’s also good for business, which provides the jobs we need to pay off our loans.
Due to the ambitious economic redistribution Labor was proposing, including tax changes for investors, it was likely that a Labor win would have extended the current downturn in home values.
The Liberal win will bring some confidence and certainty back to the property market. That’s the key gain here. Just as important though, is the relief and opportunity it gives to property investors.
No changes to negative gearing and CGT.