With just a few days to go in the federal election campaign, we take stock of the policies and promises that affect Australia’s property industry.
More than 2.2 million Australians have already cast their votes in the lead up to the federal poll this Saturday 18 May.
Property shifted back into the spotlight, with both major parties announcing policies that will influence the future direction of Australia’s largest industry.
On Sunday, Prime Minister Scott Morrison announced the Coalition’s plan to help first home buyers take their first step towards property ownership by addressing the ‘deposit gap’.
The Coalition pledged up to $500 million in equity through the National Housing Finance and Investment Corporation, which would guarantee the difference between five per cent of the purchase price and the typical 20 per cent deposit.
This would “make a big difference” by “cutting the time taken to save for a deposit by at least half and more,” the Prime Minister said.
Soon after, shadow treasurer Chris Bowen said Labor would match this commitment.
Property Council chief executive Ken Morrison welcomes the “smart proposal” which will also provide much-needed confidence for the housing construction sector.
“This isn’t a hand-out but a hand-up for first home buyers. House prices have risen much faster than average incomes, making it an increasingly tough challenge to save for a deposit,” Morrison says.
Home loans will still be subject to bank approval, but the scheme “should help first home buyers overcome that big deposit hurdle,” Morrison says.
Morrison also says the scheme will “drive new housing projects once the current construction pipeline dries up, supporting jobs and housing supply.”
Policies to support first home buyers counter potential big changes to negative gearing and capital gains tax proposed by Labor.
Releasing its policy costings last week, Labor expects to raise an additional $32 billion in revenue over the next decade by limiting negative gearing to new property purchases from 1 January 2020 and halving the capital gains tax discount.
“This is the wrong policy change and the wrong time,” Ken Morrison explains.
“Property market conditions now are vastly different to those when Labor first announced these measures. We remain concerned that these changes will have a harmful economic impact and question assumption that they will be a stimulus to new housing construction.”
Morrison points to analysis undertaken by Newgate Research on behalf of the Property Council in January, which found investors will be less likely to invest in newly-constructed housing under the ALP’s tax changes.
“Housing construction is already falling and is a major source of jobs for Australians. The last thing we want to do is make this worse.”
Morrison is more enthusiastic about other Labor housing policies, including support of build-to-rent housing and the delivery of 250,000 affordable housing units over the next decade.
“We’ve scrutinised the policies of both major parties during this campaign, and irrespective of which party forms government, we will continue to champion policies that lift growth, boost housing supply and create more liveable cities for all Australians.”
Visit the Property Council’s federal election campaign site to gain an overview of all major policy announcements affecting property.