Anthony Albanese will become Australia’s 31st prime minister after an extraordinary election in which the Liberal Party was defeated. But what are the implications for property purchasers and the property market generally?
Owner Occupiers - Labor's Help to Buy Scheme
Summary:
Cuts the cost of buying a home by up to 40 per cent.
This means first home buyers will need a smaller deposit, a smaller mortgage and face lower mortgage repayments.
Purchasers will avoid having to pay costly lenders mortgage insurance.
Help to Buy will be open to 10,000 Australians each year
Under the scheme, the government will contribute up to 40% of the purchase price of a new home and up to 30% of the purchase price for an existing home.
Buyers are able to purchase a property that they intend to live in with a deposit of as little as 2% and designated banks will finance the remainder of the purchase.
During the period of the loan, the home buyer is able to buy an additional stake in the property from the government when the home buyer chooses to do so. Before that point, they do not have to pay rent for the portion of the home owned by the government. The government would recover its equity and its share of the capital gain when the house is sold.
All Australian citizens are eligible, provided that they earn less than $90,000 for individuals and up to $120,000 for couples. The scheme isn't isolated to first home buyers – you can have owned property previously. However, you must be renting to be and hold no interest in property to be eligible.
The following table shows how much people will save on their mortgage under Labor’s Help to Buy in different cities and regions.
Investors - Negative Gearing remains unchanged
Labor walked back from its earlier proposed change to negative gearing in 2021. The party has promised to leave the existing regimes for negative gearing and capital gains tax unchanged following the 2022 election.
Property Market Forecast
Our research team expect Labor’s housing policies to help increase growth at the affordable end of the market. In the event of a downturn in the housing market, prices in these areas will outperform, and may even see price increases in some areas with a low supply of new houses in the near term. Houses in the outer suburbs and in lower-priced regional areas, including apartments in some cases, could see an increase in demand due to first home buyers accessing the new schemes.
How can you benefit?
Spots on the Help to Buy list will go fast! Contact us to see how you can be best positioned to get on the list and benefit from this great scheme for home buyers.
We can also help investors identify suburbs that will be disproportionately impacted by demand from these schemes. A full list of suburbs can be obtained by contacting us either at shayne@propertyinvestmentcoaching.com.au or 1300 944 039.
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