While current issues in the housing market – such as affordability, supply and the constant threat of a rate hike – have all become highly politicised, they are unlikely to be solved by a change in government, regardless of what the major parties promise.
Real Estate Institute of Australia director and president, Malcolm Gunning, says, “Regulation has really changed lending criteria. Then you’ve got the halt in off shore investment, particularly in residential property, which has all but stopped.”
According to his observations, overall buyer demand has dropped 25% over 18 months and Australia is set to see a repeat of the market conditions witnessed in the 1990s and early 2000s.
“It’s a ten year cycle,” he says. “The construction industry will complete what they have got going and there will be very few new residential developments commencing in Sydney, Brisbane and Melbourne.
“Couple that with the current debate on population – it would seem both parties are considering reducing immigration – and again it plays into that housing demand,” he adds.
While there are other unknowns that could always throw a spanner in the works – such as trade wars, natural disasters, a macro economic problem, or even conflict – Gunning says, “Really, it’s a pretty clear picture.”
“The property market is a bit like a battleship. It has come into the crossfire from the regulators and the banks, and cash is harder to source offshore at the moment because of the bond rate.
“What we are going to see is a lot of off plan property sales won’t settle and we will see a bit of blood in the water so to speak in 2019 and early 2020,” he adds.
When it comes to finance and banking, FBAA executive director Peter White has a different wish list from Australia’s political parties.
“I would like to see that a long-term financial services environment is maintained through red tape, without eroding competition. I would also like to see that complete transparency and accountability becomes the new culture,” he says.
Meanwhile, John Mohnacheff, group sales manager at Liberty adds, “History shows us that despite who wins the election, customers will always need free-thinking lenders to help them achieve their financial goals.”