With a Labor Government taking the reins for the first time in nine years, homeowners may be wondering what that means for the property market.
Despite the change of leadership, property data expert Arjun Paliwal predicted business as usual.
“It’s not a left turn or a right turn - it’s kind of like a straight line,” Paliwal said.
Like the Coalition, Labor promised several different policies aimed at helping people locked out of the housing market.
The bulk of these policies are designed to help people by increasing their buying power, which have the side effect of boosting house prices as buyers have more money available to spend.
However, Labor’s schemes for helping first home buyers are likely to have less of an inflationary effect than the Liberal Party’s Super Home Buyer Scheme, which many experts agreed would have sent house prices skyrocketing.
Labor’s flagship housing-affordability policy is the Help to Buy scheme.
Under the scheme, the new Government plans to chip in up to 30 per cent of the purchase price for existing properties and up to 40 per cent for new builds for eligible households.
The scheme would be available to people earning less than $90,000 a year - $120,000 for couples - and will be capped at 10,000 places a year.
Paliwal said people would be unlikely to jump on this home-equity scheme immediately, meaning its impact would take a while to be felt in the property market.
“I do feel that a lot of people will have a lot of questions on their mind,” Paliwal said.
“I don't think customers will have a clear understanding straight away.”
However, Paliwal expected rapid take-up of the Regional First Home Guarantee, which will help 10,000 regional Australian families annually buy their first home.
The regional home guarantee was announced as an extension of other home guarantee schemes initially launched by the Coalition government.
Backed by Labor, these schemes allow buyers to purchase a home with a 5 per cent or 2 per cent deposit, depending on their eligibility, with the other 15 per cent of the loan guaranteed by the Government.
Labor also promised to increase the price caps so the scheme would be more useful for people trying to get into the booming housing market.
Paliwal said the continuation of these schemes would add “a little bit more demand and support for that first-time-buyer base”.
“In terms of the property market in the next six to 12 months, other than just some improved first home buyer demand, I don't think there's anything that's going to take it in a direction one way or the other based on Labor coming into government,” he said.
More cash in the household
In the longer term, Paliwal said Labor policies aimed at reducing household costs, such as boosting childcare subsidies, would result in a little more cash back in household finances.
He said reduced taxes, increased subsidies, and a boost to minimum wages would all increase household budgets.
“The upside of that is there's obviously a greater cushion for rising cost of living but at the same time, more cash in households also equals more demand, which will continue pushing up that cost of living,” he said.
“So it's a catch 22.”