Another election. Another round of noise, headlines, and panic. But here’s the truth: while the media love drama, savvy investors see elections for what they are—a blip on the radar.
Labor’s landslide win has some people asking, “Should I wait and see?” That thinking will cost you. History shows the market bounces back quickly after elections. So don’t get caught on the sidelines.
Big Promises, Long Timeline
Labor’s big headline is the $10 billion Housing Australia Future Fund, promising 30,000 new affordable homes over five years. They’ve also committed to delivering 1.2 million homes by 2029.
Sounds great on paper. But here’s the problem: we’re only building around 160,000 homes a year. To hit their target, we’d need to build 240,000 every single year. We’ve never done that—and building approvals are heading in the wrong direction.
Industry heavyweights like Property Council CEO Mike Zorbas are begging for action: unlock land, fast-track approvals, fix the mess.
What also gets missed in this discussion is that to build 50% more homes each year we immediately need either 50% more construction workers in the housing industry, or each worker needs to become 50% more efficient. That’s a bit tough, given that the housing industry already employs over 1.4M Australians directly, and many more indirectly. So, getting funding and building approvals to lift is one thing, building the extra homes is another altogether.
Bottom line? Supply won’t catch up anytime soon. That’s good news for property owners, because tight supply supports price growth.
The Negative Gearing Debate, Resurfacing? Not Likely.
Labor’s 2019 proposal to abolish negative gearing for established properties lost them the election. That lesson has stuck. Even with the Greens party pushing anti-investor rhetoric including ending negative gearing and rent control proposals, Labor is unlikely to jeopardise electoral support by aligning with these fringe policies.
So don’t lose sleep. Negative gearing isn’t going anywhere.
What About Migration?
Labor’s new migration policy is trying to cool the heat a bit—capping student numbers and tightening visa requirements. But even with that, population growth is still strong, and that means more demand for housing.
Less supply. More people. You don’t need a crystal ball to see what that does to prices and rents.
Sentiment
Australia’s housing shortage has been no secret for the last few years. But market sentiment has been soft, owing to household concerns about inflation and nervousness about global and domestic issues. In the lead up to an election, the media really amplifies this. But, following a categorical win by the labour party, the negative media is likely to quieten down. That means sentiment will be let loose, and as it improves we will start to see a speeding up of house price growth which will reinforce the positive sentiment, building momentum and leading to an increase in urgency.
Key Takeaways for Investors
The biggest driver of market momentum remains, a persistent housing undersupply. With net overseas migration still substantial and construction lagging, demand continues to outpace supply, particularly in major urban centers.
- Supply is constrained and worsening.
- Demand is rising due to population growth, migration, and economic recovery.
- Rental vacancies are tight, putting upward pressure on rents. Rental yields are likely to remain strong amid tight vacancy rates.
- Capital growth potential persists in areas with limited new supply.
- Strategic acquisitions in growth corridors can capitalise on infrastructure investments and population trends.
- Interest rate policy and inflation are more likely to affect short-term price fluctuations than election outcomes.
It’s a good time to own property. But for those that don’t already own property, the next few months may present one of the last chances to get into the market to capture the full extend of the coming boom.
Ready to explore property investment opportunities in this evolving market? Book a free strategy session with OpenCorp’s property experts today.
