By Craig Heppell
Wow!
The election promises are coming thick and fast. With the Election right upon us, both major parties are dangling the carrot for our vote – tax us by the loaves and sprinkle a few crumbs back to us. The generosity is next level. As far as property is concerned… Labor is offering First Home Buyers the ability to buy with just a 5% deposit and no Lenders Mortgage insurance up to $950k
Libs are offering that FHB’s can claim mortgage payments as tax deductions if they purchase a newly constructed home, with a possibility of accessing their Super as well. These “initiatives” will likely push the market into the winner’s circle. That means more activity leading to increased price growth, leading to a market peak. The big question is when will that peak be?
Based on the 18.6 year Real Estate cycle, and I refer to the investors’ bible The Secret Life of Real Estate and Banking by Phillip J Anderson, the market will peak sometime between 2028 and 2030.
What happens then? All I can say is, do not be exposed to substantial debt. We are already seeing signs of the winner’s circle with median prices in Sydney heading toward $2m in some areas. Here, in the NW, the median price for a residential home Burnie to Devonport, has remained pretty stable over the last 6 months, sitting around $530,000.
Once the election is done and dusted, I expect more housing stock to come to the market initially and if interest rates come down, as expected, there should be enough buyers to soak up the well-priced, well-presented homes.
Craig Heppell, Principal, Ulverstone Real Estate