Now that the 2022 Federal Election votes are counted, what will a change in government mean for the property market?
The news that Anthony Albanese led the Labor party to victory in Saturday’s 2022 Federal Election, means different things to different people.
In his victory speech, Australia’s 31st Prime Minister, said that one of his goals was to “bring Australians together”.
When it comes to the economy, he said, his vision is for one “that works for people, not the other way around”.
What exactly that might mean for both investors and buyers in relation to one of the hottest issues of the campaign –housing affordability – will soon become clearer.
Although the final nature of the cross-bench will determine how effective Labor can be in bringing its plans to fruition, here are some of the property-related policies the Labor government promised to enact:
Help to Buy
Under the Help to Buy scheme, Anthony Albanese said that Labor would reduce the cost of a mortgage by as much as $380,000 for some eligible Australian home buyers.
The pledge behind the program aims to offer up to 40 per cent in equity contribution towards the purchase of a new home, with up to 30 per cent of the purchase price of an existing home offered to buyers.
With a deposit as little as just two per cent of the purchase price, the Help to Buy program sees participating lenders financing the remainder of the property purchase, with the government recovering its equity and its share of the capital gain when the house is eventually sold.
Individual Australians with a taxable income of up to $90,000, and couples with a combined taxable income of up to $120,000 can apply for the 10,000 spots offered under the scheme each year.
In the lead-up to the election, Australia’s biggest financial comparison site, Canstar, explained the scheme in more detail, complete with an outline of eligibility criteria and price caps in specific regions, in this article.
National Housing Supply and Affordability Council
Mr Albanese also pledged to establish a National Housing Supply and Affordability Council, composed of urban development, urban planning, residential development, finance, economics, and social housing sectors.
The vision would see the Council set targets for land supply, in consultation with States and Territories, in a bid to address housing affordability and homelessness.
Regional First Home Guarantee
This planned expansion of the existing First Home Guarantee (previously called the First Home Loan Deposit Scheme) would see Labor help up to 10,000 eligible regional Australian families buy their first home each year.
The Regional First Home Buyer Support Scheme plans to triple the number of places available to eligible Australians living in regional areas.
Eligibility criteria includes living in the region in which they apply for more than 12 months and will offer approved applicants the opportunity to purchase a home with as little as a five per cent deposit and no need to pay Lender’s Mortgage Insurance (LMI). Six-monthly reviews of the scheme’s price caps – in both regional and capital city areas – will outline the maximum purchase price available to eligible applicants.
Labor has also promised to “maintain existing regimes for negative gearing and capital gains tax”.
For home-buyers and existing property investors, waiting to see exactly what the election pledges will mean to their potential savings, will be a case of waiting and seeing – with a hope that the changes will add up to more opportunities and benefits within the property sector.
This article is provided for general information purposes only. Its content is current at the date of publication. It is not legal advice and is not tailored to meet your individual needs. You should obtain specialist advice based on your specific circumstances before taking any action concerning the matters discussed in this article.