In addition to the federal election, are a number of significant factors that will likely impact property investment decisions in the coming 12 months. The first being the interest rate rise announced at the beginning of May. After a number of years that saw high performing housing markets across the country, it’s anticipated that the rise in interest rates will continue over the next few months and lead to lowering borrowing potential for those looking to purchase their first home, driving stronger demand at the affordable end of the market.
For investors, rising interest rates will be partially mitigated by the current rental boom or ‘landlord’s market’. Now that both domestic and international borders have reopened and migrants and students have returned to Australian shores, rental supply is dwindling and rents are expected to increase significantly. Even with rising interest rates, given that interest on a loan is tax deductible for investors, coupled with potential rental growth, cashflow will be a key trend or ‘buzzword’ for investors in 2022.
“While we typically see investors take a wait and see approach during an election campaign, there are no major housing-related policy changes in 2022 indicating the election result is unlikely to shake up the property market substantially,” said Ironfish Head of Property William Mitchell.
“Both major political parties, however, are committed to helping first home buyers which will increase demand at the affordable end of the market. Investors in the market are more likely to be watching the impact of rising interest rates and cost of living coupled with a nation-wide rental boom and strong rental growth; which is why it’s critical to be well informed and investing strategically in the post-election market. This is how we will be supporting our investors in the upcoming months.”
To find out more about how the election will impact the property market in 2022, join our upcoming webinar.
