May 21, 2019 by Marvin Coleman
Well who saw the Coalition coming? I certainly didn’t!
We all expected Labor to win. However, their pitch was a bit like going to a restaurant and opening a menu that’s ten pages long. You don’t know where to start, you don’t know what to choose, you don’t know what’s good and what’s bad. It’s just all too complicated! I think Labor just had too many policies.
Ultimately voters made decisions based on short-term impact on their family’s wealth, not longer-term climate change and cancer funding issues. While it seemed like a “shock” result, with hindsight it all makes sense now.
Impact on Property Market & Rates
There’s no doubt the property market had already priced in a Labor victory, as had the stock market. We saw the stock market, especially the banks, bounce right back again. So surely we will now see an accelerated improvement in the property market, with a return to the market by both sellers and buyers. Anecdotally, I know from my client base, there had already been increased recent buyer activity. It’s now just a matter of vendors catching up, having the confidence to put their property on the market and returning to a fluid market with sufficient stock.
I expect the property market to bump along the bottom for another 2-3 months, then perhaps see an increase in prices with the return of the Spring market selling season.
Everyone’s predicting an RBA rate cut in the next few months. I think they might do one small cut, or they may wait for the effect of the Coalition tax cuts to come through just after the start of the new financial year. Certainly, fixed rates are now as low as I have ever seen them. Given the level of scrutiny on the banks and the recent cut in global funding costs , if there is a cut, I expect all banks to pass that through to their clients immediately.
So, will property prices increase again and rates enjoy a slight cut? Let’s see over the next few months.
Cheers, Marvin
