Is the 2016 election affecting your property purchase?

With the upcoming election swiftly approaching, we have noticed that there is much uncertainty in the marketplace which is affecting many Australian’s decision to purchase a property. One of the main concerns worrying those looking to get into the property market and those already in it is the housing policy and the proposed removal of negative gearing on established properties by the Labor government.

Whether you are an investor or an owner occupier, buying a property can be a difficult and stressful experience, especially when policies could potentially change. If the upcoming election is affecting your decision to buy a property, then this article has been written to help you understand why buying a new off the plan property today is actually a positive step.

We have also put together a quick Election poll, (Is the upcoming federal election influencing your decision on whether to purchase a property?), which we would love you to take part in. This poll can be found to the right hand side of this page.

Housing Policy

If Labor came into power, they would restrict negative gearing to new dwellings only (which would include off the plan properties) from 1 July 2017 as well as halve the CGT discount for assets held longer than 12 months from 50 per cent to 25 per cent. They say that this tax reform package will improve the budget bottom line by $32.1 billion over ten years.

In response to this, the Coalition would not change negative gearing, as it believes that Labor’s plan would undermine consumer confidence and smash home values.

What does this mean for you?

For those that buy an established property from 1 July 2017 as an investment, then you would not be able to claim the benefits of negative gearing. However, buyers of new property need not worry as the Coalition have announced they would not change negative gearing, whilst if Labor does win, then new properties would not be affected.

At iBuyNew, we concentrate on selling new off the plan properties, and these proposed changes will not affect our properties. However, by waiting to see which party comes into power, this could mean you miss out on some excellent property opportunities available right now, whilst prices could also rise after the election, making it even more expensive.
Are you willing to sacrifice buying a property today, just to find out who wins the election?

Benefits of buying property today

With fewer people purchasing property right now, due to everyone playing the waiting game, there is less competition to go up against, meaning you have a greater choice of better apartments to choose from. There are also some great incentives to make the most of right now due to the end of financial year approaching and these developer incentives are unlikely to still be around after the election which takes place on Saturday 2nd July 2016.

So should you be buying a property today or should you wait until after the election? We would recommend that if you have the capacity and funds to buy a property today, then now is always the right time to buy. There’s no use in putting off the property purchase for a few months just to find out which party comes into power. Whichever party does come into power; this will not affect you if you are purchasing a new property. The only thing that it might mean for you by not purchasing before the election is that you are faced with higher prices and more competition, making it more expensive and harder to enter the market. What’s the point of that?

Even without the election, is now a good time to buy?

With Sydney and Melbourne experiencing a boom late last year and into early 2016, both markets have started to slow down, but are still expected to grow at a steadier pace, compared to their skyrocketing prices of the last couple of years which saw growth into the double digits.

Even though the Sydney and Melbourne property markets are slowing down, it is still a great time to buy here, as long as you are buying for the long term. There are still a handful of pockets of good growth areas in both capital cities, but you need to know where to look to benefit from the greatest amount of capital growth.

You should try to avoid buying in areas that have already transformed and seen high levels of growth already as it is unlikely that they will experience the same high growth levels anytime soon. You won’t be doing yourself any favours buying here. It is simply too late. However, our Property Consultants at iBuyNew can point you in the right direction and showcase areas which are experiencing growth right now.

Both cities also have strong economies and driven by high levels of population growth, falling interest rates combined with rising consumer confidence. Melbourne itself has been voted as the world’s most liveable city in the world for five years running by the Economist Intelligence Unit’s Survey, making this city even more attractive to both local and overseas buyers.

Brisbane should not go amiss though, especially if price and affordability is important to you. Brisbane is an exciting place to buy property right now as it is the most affordable out of all three cities and has not reached its peak. It is still growing and there are still plenty of opportunities to buy here within the inner-city and middle rings and many investors and owner occupiers are already seeing the benefits.

What you should remember when buying property?

Buying a new off the plan property has a number of advantages compared to an established property and many people love to buy off the plan for a number of reasons including:

• It’s brand new and more choice available
• Massive stamp duty savings and capital gains likely
• More time to save
• Depreciation benefits, especially in year one.

However, whichever property type you choose to buy, it is important to keep in mind the following for the best results. Here are 10 factors you should focus on:

1. Focus on buying high quality properties in good growth areas.
2. Hold on to properties for the long term (at least 10 years or longer).
3. Ensure you don’t put yourself under financial pressure and only take on what you can afford.
4. Speak to a Mortgage Broker to work out your borrowing capacity.
5. Make a plan and stick to it.
6. Do your research and due diligence.
7. Buy NEW and have the ability to negatively gear to reduce your tax, whilst benefit from massive stamp savings and concessions.
8. If you have the funds to buy today – buy today. Just remember it’s better to be in the market, than watching it pass by.
9. If you are a property investor, have a diverse property portfolio to mitigate your risk.
10. Speak to an iBuyNew Property Consultant – we have years of experience and can help you make an informed decision whilst provide impartial advice.

No matter whether you are a serious investor or just starting out, our expert Property Consultants are able to assist you and tailor each experience to every individual’s needs and requirements. We provide independent and impartial advice and are solely focused on finding you a property that is relevant for you and your budget.

If the upcoming election is affecting your decision to buy a property, then why not book a meeting with one of our helpful Property Consultants who will be able to speak to you in person and put your mind at ease.

What are you waiting for? Book a meeting today by calling the iBuyNew team on 1300 123 463.

Don’t forget to take part in our Election Poll, (Is the upcoming federal election influencing your decision on whether to purchase a property?) which can be found at the top right hand side of this page.