What does the election result mean for property in Victoria?
The past few years has seen Victoria and Victorians face much uncertainty regarding the property market, and the uncertainty has touched all whether you be a home owner, an investor or a renter. We have endured a lengthy period of time with the state Andrews government reviewing and legislating a range of amendments to the Residential Tenancies Act, there has been the Banking Royal Commission, and most recently with Federal Labors policies regarding negative gearing and capital gains tax. Well, finally, all these issues are finalised with the return of the Morrison government we have certainty that negative gearing and capital gains tax will remain unchanged, the banking royal commission has caused the banks to clean up their act, and Daniel Andrews changes are known and in the process of implementation.
Over the past year we have seen property prices take a hit, much of this may be due not only to the banking royal commission and uncertainty regarding rental laws but also and possibly most relevant a concern about changes to the tax treatment of property investment with the ALP having been well ahead in the opinion polls.
So, what does the election result mean for property in Victoria? Generally, we will have to wait and see, and we will be subject to different opinions from different people across different sectors of the economy. My thoughts are that we now have stability having had the Royal Commission, the rental laws and now the federal election finalised. This stability may see buyers return to the market and as a result will see housing prices begin to rise again, it also means that landlord’s will not be seeking additional rent increases to offset the loss of income and wealth that would have occurred with the ALP’s proposed changes.
Whilst over the past few months there has been an expectation that interest rates would be reduced by the RBA, is that now less likely, I think it is. My thoughts are that they will continue to maintain rates at 1.50% in the short term whilst we wait and see how the economy and the property market responds to the election result.
Overall, I believe the result is a positive for the property market in Victoria. Investors, homeowners and renters can all relax with a level of certainty that has been missing from the property and rental markets since Daniel Andrews first announced he was planning to amend the Residential Tenancies Act. However, as I stated earlier in this piece, there will be differing opinions and we will just have to wait and see what the coming months bring to the market.
If you would like to discuss further please feel free to give me a call, or if you are wondering how you may be affected personally please speak to your financial advisor or accountant, or if you don’t have one that understands property let me know and I will put you in touch with someone that can give you some good advice regarding property for your personal situation.
*This article is based on personal opinions and is not meant be read as financial advice. If you are wanting advice for your personal situation please consult a suitably qualified financial advisor. As mentioned above if you would like to be put in touch with a financial advisor who understands property please let me know.