Monthly Market Update - January 2019
By Advantage Property | 10th Jan 19
What the proposed changes to negative gearing will affect investors.
WATCH: Frank Valent'c Property Market Update
The year ended very differently as a buyers' market and it started very much a sellers' market, where there were more buyers and more competition. Later in the year, all this changed as many buyers were struck with a fear mentality that property prices will decrease and due to that, they have stayed on the sidelines, procrastinating and hesitant to buy.
Many experts are predicting a further correction this year, which should provide some more opportunities for buyers. Though, there were many suburb records broken in Melbourne over the year. Some of the record suburb results included Narre Warren North, Essendon, Cranbourne North and many other suburbs including the $100 million dollar sale in Point Piper in Sydney.
There is talk now that the banks will hopefully relax their credit crunching as the RBA has met with all four major banks and encouraged them to approve more funds for buyers to be able to purchase property. This is an interesting development as it was the banks that were being pushed through the Royal Commission into being tougher lending practices. So, it is a bit of a juggling act at the moment.
The Labour government is getting much publicity around its proposed changes to property taxes including removing negative gearing. A recent poll showed that 48% of people were against this while 43% were for it. A recent article showed that it could cost our nation 42,000 new homes, 32,000 construction jobs and a $12 billion housing hit. This could have a very negative impact on investors as well as the proposed changes to Capital Gains Tax being halved. This will only further alienate investors from investing in property and potentially cause a housing shortage for tenants.