The changing face of Australian real estate
One thing is for certain when it comes to Australian real estate – you never know precisely what you are going to get. The market in Sydney will be booming one minute, while Melbourne will be steaming ahead in the next. With the nature of the property news cycle as it is, you could be forgiven for thinking "just leave me alone and let me buy my house in peace!"
There are genuine reasons to stay abreast of what is happening in the wider industry, however. Shifts in one part of the market can trickle down and affect others, and factors including government legislation at home or the state of the global economy can have an impact.
Let's take a look at some recent news involving the Australian property industry, and how it could affect you next time you speak to a buyer's agent.
There are genuine reasons to stay abreast of what is happening in the wider industry.
Potential restrictions around negative gearing
We've just entered an election year in Australia, so you can expect the policy announcements to start flying thick and fast. Already there are potential repercussions in the pipeline for the real estate market, after the Labor Party pledged to limit the popular investment practice of negative gearing to new homes only from July 2017 – should they win the federal election.
The policy, introduced by Labor leader Bill Shorten at the party's 2016 NSW conference, isn't the only one to have negative gearing in its sights, with Treasurer Scott Morrison admitting the Coalition government had also considered looking at the issue, although only for high-end investors.
The moves to alter negative gearing are being met with some resistance from within the industry, however, with Ken Morrison from the Property Council of Australia coming out against the idea.
"Tinkering with negative gearing would be risking a part of the economy that is growing and creating needed jobs. Changing this 100-year-old part of the tax system would impact investment decisions for new housing and infrastructure," he said.
The effects of a slowing global economy
Major segments of Australia's property markets have long been a target of international buyers, however the increasing instability in the economies of some countries may be leading to a decline in demand. The impact of falling commodity prices, particularly in China, is expected by some to have an impact on international tourism and the flow of people into the nation.
Meanwhile, according to realestate.com.au, the Chinese government is possibly set to begin restricting the amount of offshore investment its citizens are allowed to make. Given the heavy attention paid to our markets from the country, it's not unreasonable to assume some of the fierce competition in markets like Sydney and Melbourne may start to abate.
It could be a better time than ever to speak to your buyer's agent.
What does it mean for buyers now?
Should the government – whoever that may be in 2017 – actually alter some of the laws around negative gearing, it's arguable that property investment will not be as achievable or lucrative as it is under the current legislation. That could make now a better time than ever to speak to your buyer's agent about getting into property investment.
Meanwhile, the potential for reduced competition from foreign buyers may also make things easier for Australian real estate investors. That may mean taking a wait and see approach is advisable for now, however you also run the risk of missing out on some of the benefits of negative gearing.
When the time is right for your to buy your next property, or to simply stay on top of what's happening on the real estate market, speak to a buyer's agent from Cohen Handler. Their experience and connections in the industry can help you make the best purchase at the best time.