While many homeowners are keeping a watchful eye on the property market, how long will it take for interest rates to start affecting the world of real estate?

Despite reassurances from the incoming Labor Government, a new party in power almost always means one thing: change. As the nation’s 31st Prime Minister, Anthony Albanese and his new frontbench lineup are facing an uphill battle on multiple fronts, particularly when it comes to domestic concerns linked to the rising costs of living.

As Australia’s house prices, inflation levels and interest rates are all inextricably linked, the new PM may not be able to wield direct power over these key issues, but he can introduce measures that have the potential to soften the blow – so what can the property market expect from a Labor government?

How Labor Policies Could Influence Real Estate 

A study conducted in 2013 by Hotspotting concluded that while the actual elections themselves have little to no impact on the property market beyond impacting clearance rates on the election weekend, the winner themselves can have an enormous influence on how the property market moves forward. 

As a boy from Western Sydney who grew up in public housing, incoming Prime Minister Anthony Albanese is understandably passionate about looking after the nation’s lowest income earners. In his own words, “we need to build more social housing, upgrade existing housing, and make sure that the promise of home ownership is extended to all Australians”. 

However, it’s also worth noting that Albo has learned a lesson or two from his predecessors. After Labor’s shock loss in the 2019 election, many believe that the previous party leader Bill Shorten’s proposed changes to negative gearing went too far, alienated too many voters, and potentially cost Labor a residency at The Lodge. 

Four years later, Albo has avoided making the same mistake, and has so far been relatively conservative with proposed changes that may influence the property market. Rising interest rates, the war in Ukraine, wage stagnation, skyrocketing utility bills and even the return of international travel have all had a part to play in seeing national property prices finally plateau, and even decrease in certain inner city suburbs.

As there’s little that the government – or in fact, any government – can do to directly turn the tide of these factors, Labor has opted to go a safer route by providing federal initiatives that both build on existing real estate schemes, as well as the introduction of a few new ones. 

• A new Help To Buy Scheme, involving an equity contribution from the Federal Government of up to a maximum of 40% of the purchase price of a new home, and up to a maximum of 30% of the purchase price for an existing home, for 10, 000 Australians each financial year. 

• A Regional First Home Buyer Support Scheme, which is aimed to provide a government guarantee of up to 15% for eligible first home buyers, so that locals with a 5% deposit can avoid paying mortgage insurance. This is similar in nature to the previous Regional Home Guarantee. 

• A $10 billion dollar Housing Australia Future Fund, which will build 30, 000 new social and affordable housing properties in its first five years, and designed to provide support to some of the nation’s most vulnerable – given Albo’s background, it has been said that this is one of his most personal endeavors. 

Despite the new initiatives, it’s also worth noting that the big banks haven’t changed their quarterly and annual forecasts, even with a new government in power. As housing market demand is more likely to be driven by employment and wage growth, the challenge will be whether these can be sustained as interest rates continue to rise. 

Should you be looking to sell your home or purchase a new one, enlisting the services of a free property advisor like ESPA can often be a game changer. As an example, your advisor would likely research the property, local agents, check the zoning, evaluate market conditions, and communicate clearly with you regarding all of your options – but where do you find one?

Take The Stress Out Of Selling Property 

As a completely free service, Emergency Services Property Advisors provide property advisor services to Police, Fire, Ambulance and S.E.S personnel and their families right across Victoria.

Luke and the team at ESPA are passionate about providing support to some of Australia’s most valued public servants. Along with key industry insights, ESPA also works with a broad range of service providers linked to the real estate industry such as conveyancers, trades, legal practitioners and mortgage brokers.

If you are an emergency services worker looking to potentially buy or sell property in the future, please get in touch with Emergency Services Property Advisors today to discuss how we can turn your real estate dreams into reality, or call Luke directly on 0414 757 705.