Pressure on the banks, a Federal election and overseas markets could impact the Australian property market in 2019, experts say.
Influential property expert Kevin Turner told Bushy Martin on the Get Invested podcast that a change in government, with the Labor party threatening to overhaul Australia’s negative gearing laws if they win power, could have dire consequences.
“Keating gave us ‘the recession we had to have’ and maybe Shorten’s going to give us the one we didn’t need,” Kevin said. “I do think that (changes to) negative gearing is not going to be good for us. If they change it in any way, it’s going be more of a long-term effect, not a short-term effect.”
Property investor and buyer’s agent Josh Masters believes a looming election will see the market hit pause.
“Generally what we see coming up to an election is that the population when it comes to investing, they tend to sit on their hands,” Josh said on the Get Invested podcast. “Confidence, it doesn’t fall, but the people almost hold their breath because they don’t know what’s coming. The reality is not a lot changes once the election happens but because people want to know who’s in power, for those months leading up to it, not a lot happens.”
The Banking Royal Commission findings, released in February, have shaken up the market and the threat to the mortgage broking industry has caused even more uncertainty for property buyers, sellers and investors.
Banks are expected to continue to tighten the purse strings and in our modern, data driven era, they know more about their customers than ever before.
“I think that’s going to be one of the things that we need to be very careful of is the fact that there is a lot more knowledge now that the banks have about our spending,” Kevin said. “Particularly our discretionary spending. So we need to be very careful about that. Your credit rating is going be vital. Make sure that you’ve got it very much under control.”
Uncertainty away from home is also a growing concern for the Australian market.
We really have got to consider what’s happening in the UK (with Brexit) and I think, quite frankly, what’s happening in the UK right is even more serious than what’s happening in the USA,” Kevin said. “I do think we are going to be impacted by those things with enough challenges ahead of us domestically (too). I think the bottom line is that we’re in for a pretty tough year.”
That said, experts agree that there will be great opportunities among the challenges. Josh Masters is looking to the property market outside of Sydney and Melbourne with some excitement.
“I think it’s going to be areas like Brisbane, the Gold Coast, Southeast Queensland, places like Canberra, places like Adelaide,” Josh said. “I’ll be quite honest, we’re actually looking at Perth now. It’s been long enough, Perth has been smashed beyond belief in terms of prices from its previous highs Now there is actually some good buying there.”
Kevin Turner believes there will be the opportunity to cash in on the mistakes of others.
“This is a terrible thing to say, Bushy, but I wrote it down I’m going say it, the opportunity is for us to profit from other people’s stupidity simply because they don’t prepare,” he said. “There are going to be some excellent opportunities, some wonderful buying opportunities in the market if you’ve done your homework, if you’ve got your plan in place, you’ve got your financing structured properly, you’re going be in a great position to just cherry pick some of those great opportunities.
“I think the bottom line for me is you really need to take responsibility for what it is you’re doing. Own your own decisions. Work to your own risk profile. Look at things like your age, your debt, your family situation, and your history. How’s your history been? If you’ve had a bad credit history, maybe you’re better off keeping your head between your legs for a little while and waiting this thing out.”
Listen to the full interviews here.
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