Post-election, the Perth property market and what it means for you
Elections traditionally bring a degree of uncertainty to the property market.
Buyers tend to sit back and wait with baited breath until a political outcome is decided.
The recent election was not only unnervingly close, it came on the back of Brexit and the global economic insecurity that it triggered. This type of uncertainty often clouds our ability to make a purchase decision but now that the election is done and dusted it’s very important not to let these outside factors impact our judgement. Being able to appreciate the current situation and decipher what is fact and what is fiction will ultimately make your decision easier and more positive. So we have put together the following snapshot of the political influences on the current Perth apartment market to help:
- The re-election of the current Government means there will be no change to the negative gearing regime. This is great news if you are an investor trying to build your property portfolio or a first-time property investor wanting to try your hand at investing. The investor buyer segment will continue to make up a large proportion of apartment buyers bringing with it a huge benefit to Perth by providing a great foundation for increased activity and thereby enhancing the vibrancy of our growing city. If you’re buying as an owner occupier it is important to take note that investor confidence will absorb a lot of the current apartment supply so make sure you don’t miss any opportunities, especially while property is so affordable.
- Interest rate uncertainty – With the cash rate currently sitting at a record low of 1.5% and interest rates being offered by banks at historically low levels, locking in some proportion of your mortgage to a fixed rate now is prudent as speculating for further drops may prove risky in the long-term.
- Affordability – by facilitating a more streamlined approval process, the government is encouraging a high level of supply and greater levels of affordability. This will logically entice more buyers into the market, gradually absorbing supply. There are so many advantages to the current levels of supply, which can be capitalised on – including ample choice and affordability – which won’t be around forever so it’s important to take advantage of this stage of the property cycle.
- Government Investment in major infrastructure projects – there are so many huge Perth projects that are well underway including Elizabeth Quay, the new Perth Stadium, and the Scarborough redevelopment. A good investment tip is to look for the property hotspots around this new key infrastructure and buy before these projects are complete, as prices will come under upward pressure as soon as the developments are finished.
- Employment - in this post-mining boom market, the government has created new initiatives to support employment in other sectors such as hospitality and tourism. As these industries grow, and more employees are trained and hired, the housing demand in Perth will increase to support it.
- Mindset change – Perth has embraced apartment living and an inner-city way of life. The traditional ideal of a large house on large block is shifting to the apartment way of life as Perth people come to realise it’s not only a more sustainable way of living, it’s also easier to maintain, lock up and leave for travel, and provides a more vibrant lifestyle. On top of this, there are many State government and local council initiatives that have been created to enhance areas and improve amenity around Perth to prepare for the future apartment demand.
- International economic influences – more than ever we are a global economy, so events on the world stage will of course impact us, but it’s important these events and issues doesn’t render us immobile and we continue to get on with making the most of our current situation in Australia.
So our advice is to try and not let political and global economic uncertainty paralyse your purchasing decision. There are so many government-led initiatives and opportunities currently available that make buying now certainly more appealing.
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