On the home straight: should you buy before or after the federal election?

Australians are headed for the poll on Saturday 18 May to vote in the 2019 Federal Election. And while both major parties are trying to woo you with income tax cuts, Medicare rebates and budget surpluses, all most new homebuyers and investors really want to know is this…

Is it better to buy before or after the election?
 
So what exactly are Labor and the Coalition’s housing policies? And how will it all affect your decision to buy? The political parties are trying to make it all seem black and white, with the housing market set to boom or bust, depending on who you vote for.
 
Truth is, there might be more to it than meets the eye if you put aside any allegiances to either party and take a balanced view.
 
Here are our top 3 reasons the federal election will shape your decision to buy.
 
1. Turning a negative into a positive
 
All the talk in the lead up to the election has been around ‘negative gearing’ – the policy that encourages investors to buy property knowing they can claim losses as tax deductions.
 
If you’re a first home buyer, you probably think this has nothing to do with you (but it does, indirectly). Let’s make this simple. Labor wants to limit the negative gearing policy to newly built homes only. The Coalition wants to keep it as it is.
 
If Labor is elected, experts warn the playing field will change for investors by making the market less attractive due to reduced choice of properties they can negatively gear. Less investors means less competition, resulting in lower demand, making homes cheaper to buy (in theory, anyway).
 
 
2. No pain, no gain
 
While ‘negative gearing’ policies have hogged the limelight, Labor’s capital gains tax policy has snuck through unnoticed by many. But it could have an even bigger impact.
 
As it stands, if you own an investment property for more than a year you can claim a 50% tax discount when you sell it. Labor argues this policy encourages investors to swamp the market, which turns away first-home buyers. To turn the tide and make housing more affordable, the party in red wants to halve the discount to 25%.
 
While this may benefit home buyers as a whole, experts argue this will chase away more investors long term than negative gearing, driving down property prices.
 
 
3. You can bank on it
 
Unless you’ve been living under a rock, you’ll have heard a recent Royal Commission has called out the systemic dishonesty of Australian banks, with revelations of irresponsible mortgage lending and misleading advice prompting calls for sweeping industry change.
 
If you were to walk into a bank before the election, they’d likely estimate your spending habits based on a simple formula (your state, number of kids, lifestyle etc.). However, the Commission’s final report may urge Labor or the Coalition to force banks to tighten their checks.

So if you’re looking to buy a new home before the election, you might find it easier to access the finance you need to buy a house. If you wait till after the election, that might become a whole lot trickier.
 
 
The verdict
 
The 2019 federal election looks like it will benefit both investors and first home buyers alike, regardless of which party wins.
 
If you’re looking to buy before the election, you boost your chances of getting the finance you need to buy your home, which are already at record lows. You also safeguard yourself against potential negative gearing and capital tax changes, making now a good time to strike on an investment.
 
If you wait until after the election, there appears to be a good chance of property prices dropping, particularly if Labour gets in. That said, investing in property could become a lot less attractive.
 
At the end of the day, it's about what works for you – it could be the risk of a ‘wait and see’ approach isn’t worth it, and you’re better off making your move now while there is clarity, certainty, and a range of excellent housing options for new home buyers and investors alike.
 
 
Pindan – making first home buying easy
 
Want to get in before the federal election lottery? Pindan makes investing and first home buying easy now with a range of exciting and affordable new developments in popular suburbs right across Australia.

Check out these top apartments and house and land packages – now selling.


 
Indigo China Green
Subiaco, WA

Apartments from $349,000.
 
Visit www.subiacoapartments.com.au

 
Botanica
Canning Vale, WA
 
House & Land Packages from $399,000
 
Visit www.botanicacanningvale.com.au

 
Plaza Central
Maroochydore, QLD
 
Apartments from $309,000
 
Visit www.plazacentral.com.au

 
Parkview
Ferndale, WA

House & Land Packages from $459,000
 
Visit www.parkviewferndale.com.au
 
 
Source: Pindan

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