Thursday 26 May 2022

What Does the New Government Mean for Property?

Regardless of your political view, the results of the 2022 Federal Election are in, and Labor leader Anthony Albanese, Australia’s 31st prime minister is, “ ready to serve.”

The anticipation of a changing government always affects the real estate industry with an obvious halt on investment decision making months prior to every election.

Chris McLeod, Director of Your Commercial, commented that prior to this election we had a number of buyers put a hold on investing in large assets as they wanted to see what policies would come into play after the election.

On Sunday after the election we saw an increase in the number of buyer enquiries, particularly by owner occupiers. "Every time we have an election, enquiry numbers across sales and leasing drop. People put a pause on investing, on expanding and on making any large decisions in general, until they know the outcome of the election and what impact any new policies might have on their business. This time was no different."

The proposed policies of the new Government will influence the commercial market to a degree, mostly though, the emphasis has been on affordability in the residential space. This has given the industry much respite from talk of revising the commercial and investment regulations.

Below is a summary of some of the new Government's proposals as relevant to the property sector.

Help to Buy

Eligible buyers will be able to purchase a property that they intend to live in with a deposit of as little as 2 per cent. Participating lenders finance the remainder of the purchase. The Government would recover its equity and its share of the capital gain when the house is sold.

National Housing Supply and Affordability Council

Establishment a National Housing Supply and Affordability Council to address the two connected issues. The Council will reportedly consist of experts from the finance, economics, urban development, residential construction, urban planning and social housing sectors, working closely with states and territories to develop the National Housing and Homelessness Plan.

Regional First Home Guarantee

Proposed expansion of the First Home Guarantee to help 10,000 regional Australian families a year buy their first home. The scheme aims to triple the number of places that Australians living in regional areas received last year under the current scheme.

Price cap reviews

Conduct six-monthly reviews of the price caps in both the capitals and regional areas that determine the maximum price an eligible applicant can pay for their new home.

Negative gearing

This new Government has promised to “maintain existing regimes for negative gearing and capital gains tax” during the party’s tenure in power following the 2022 election.

Businesses in general

There is support for a 5.1 per cent increase to the minimum wage to combat inflation. There will be advocating for industrial relations reform including representing “job security” in the Fair Work Act, amending the definition of casual employment, and legislating the criminalisation of wage theft.

Better Deal for Small Business

Better Deal for Small Business plan pledges to work with small businesses on their specific needs in times of crisis, and ensures small business owners are paid on time.