The Australian property market is expected to bounce back after the election win by the ruling Liberal conservative party coalition government.
Fears of a Labor party win, along with their promises of changes to negative gearing and capital gains tax had already been priced into the market, according to Credit Suisse analysts, contributing to property prices falling by as much as 14 per cent in Sydney.
Chairman of Australia’s biggest real estate agency group Ray White’s Brian White said property was the decisive factor at the election and that Labor’s proposed changes were part of why the market had been dropping.
‘Cycles are cycles but I do think what Labor was going to bring in has had a major impact on prices. Now that’s not going to happen,’ Mr White said.
He continued: ‘I think people will look back on this as the time when confidence started to come back into the market again. I think property was the most decisive election issue in the whole campaign.’
The chief executive of Australia’s largest listed developer Stockland’s Mark Steinert agreed and said the election result would be a boon for his business and also small businesses across Australia.
‘I think this is a very good outcome for our business and for the nation,’ Mr Steinert said. ‘I think it’s also a good outcome for small business because it gives them certainty.’
‘The negative gearing and capital gains tax changes were going to be detrimental to investors and the market. Rents would rise and I think prices would have fallen further.’
The Australian property market had already been hit by punitive tax measures against overseas property investors, and a Labor election win was expected to further squeeze the market.
Goldman Sachs economist Andrew Boak said the expectation of a Labor election win had been priced in and now some of that will reduce that risk.
He said: ‘We believe investors have for some time been pricing in potential longer-run headwinds linked to the ALP’s proposed reforms to excess franking credits, negative gearing/CGT, family trusts, and industrial relations.’