Nearly one month-ago Australia’s political landscape changed with the election of a new federal Labor Government. With it, comes new strategies to make housing more affordable for Australians, and in doing so, keep the conveyancing industry’s wheels turning.
The conveyancing industry, as per usual, will see its short and long-term future heavily guided by the property market. Which in its current state, is seeing a temporary lull with interest rates rising and the recent federal election.
Many experts, however, are predicting the current downward trend of house prices will only continue throughout the year. This is, despite the new strategies from the new Federal Government.
According to the Sydney Morning Herald, economists are predicting the property market will continue on its current course despite strategies to help first home buyers, single parents, low-income earners and a promise of 30,000 extra social and affordable homes.
CBA senior economist Gareth Aird told the Sydney Morning Herald, the policies laid out by the new Labor Government won’t be enough to lesson the impact of the recent interest rates rise and the rising cost of living in Australia.
“Regardless of who won the election, rising interest rates will be the one thing that shapes economic outcomes and the future of the housing market,” Aird said.
Labor Government effect
Other experts join the opinion of a minimal impact from the Federal Government’s proposed housing policies. As Chief Economist at AMP Capital, Shane Oliver, told 9news the government’s proposed policies will only have a “marginal” effect.
“The construction of 30,000 social homes combined with the National Housing Supply and Affordability Council if appropriately focused on boosting supply have the potential to help improve housing affordability,” he said.
“It’s marginal though.
“The main impact on home prices will likely from come rising interest rates (which would have occurred whoever won the election) which we see driving prices down by 10-15 per cent over the next 18 months and may prove to be a headwind for prices thereafter.”
Tim Lawless, Research Director at property data firm CoreLogic, also told 9news, while the ALP’s “help to buy” scheme will give first homebuyers access to the market, it only addresses housing affordability problems.
“Being able to share up to 40 per cent of the purchase price with the government, along with only a small deposit and opportunity to save on lenders mortgage insurance, helps to overcome several of the hurdles of home ownership,” Lawless said.
“Keeping in mind buyers will still have to fund their transactional costs, including stamp duties, legal costs and bank fees.”
Conveyancing market update
With the property market playing an active influence on the influx of property matters fielded by conveyancers, overall, the industry should expect to stay level for the remainder of the year.
Australian homebuyers are still actively looking to enter and re-enter the property market, especially since the election.
While figures are not expected to return to the industry highs, we saw in 2020 and 2021, Conveyancers can expect a short influx of first homebuyer prospects when the proposed Labor Government policies start to influence affordability in 2023.
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