Australia’s housing market is poised to see further price increases this year, but the possibility of a federal election being called as early as August could impact this outlook, according to the Real Estate Institute of Australia (REIA).
The latest figures from CoreLogic showed that house prices across Australia grew by 3%, driven by a 2% growth in capital cities and 6.9% gain in regional markets.
Adrian Kelly, president of REIA, said that the real estate industry “looks forward to a positive year for the Australian property market with the promise of an Australian COVID-19 vaccination program allowing life to resume to a new normal.”
He noted, however, that government stimulus measures and low interest rates “have been, in part, responsible for the resilient demand for residential property” and cautioned policy makers to make “measured commitments for property policy for all players in the real estate industry, from first home buyers to investors” as the possibility of an election looms.
“In May, just prior to the 2019 election, house sales were the lowest in two decades across Australia, which was largely attributed to election commitments from the federal opposition to abolish negative gearing and Capital Gains Tax (CGT) in their current form,” said Kelly.
“Given the major role investors played and continue to play in providing housing over the pandemic, it is critical in the run-in to the election that policies from all sides of politics work for all players in real estate.”