The property and lending markets are having a tough time at the moment which is really good news for us and our clients. We are getting some unbelievable deals for our clients off the back of weakening consumer sentiment and white noise in the media.
As a result we are jumping on these deals for our clients and those who are taking action are getting such an advantage over others it’s not even funny. Free furniture packages, genuine discounts off valuation supported pricing and a raft of other incentives are meaning our clients are cleaning up in this market where uncertainty and indecision within others is rife.
Many are waiting to see what happens in the upcoming election but I don’t think we are going to see much change regardless of who gets elected.
It looked like Labour were a shoe in a few months ago, now it’s evened up to 50/50 and could go either way. Irrespective of whether Labour gets in or not, they are not going to make material changes to negative gearing and the investment market because they simply can’t afford to. The Gov’t (irrespective of who it is) can’t lose any more Stamp Duty revenue than they are already losing through a weakening housing market. Any major change to negative gearing would not just slow the market further but would bring it to a grinding halt.
The Gov’t are very nervous about the housing market and the loss in resultant revenue. The budget predicted a 15% drop by volume this financial year but so far it has dropped 26%, and sales in Jan were 40% lower than the same time last year. This means a current loss of up to $600m in Stamp Duty revenue this financial year alone. This amount would almost halve the surplus! The budget currently forecasts a fall of $726m fall this financial year in Stamp Duty which covers around 10% of all Gov’t spending.
This year, and in fact the next 24-36 months are glory times to be investing in the Australian residential property market (in the right locations, care must still be taken). We may not see it this good again for years to come. Those with a long term stable investment horizon will set themselves up for generational wealth if they invest in the next 3 years.