In a surprise win, the Coalition has prevailed! After a time of political uncertainty, it’s a relief to know the outcome of the election and what it means for you and your customers. I make it my job to be across these things, and understand what any policy changes include, and how they will assist me in getting the best outcome for customers. Here are some of the burning questions my customers have been asking me after the Coalition win.
With no changes to negative gearing, is there any plans to help improve declining housing prices?
With negative gearing and capital gains tax remaining on the table for investors, predicted interest rate cuts and the first home buyers discount, the decline of housing prices is looking up! While it may not increase dramatically, it is likely that prices will flatline over the next year or two.
To improve property prices we need the level of demand to improve, as this is key to the revival of the housing market. A number of measures have already been announced that may begin to turn it around. ScoMo came forward days before the election with announcing an awesome First Home Buyer Discount to make buying a first home for young Australians easier. The discount includes:
For up to 10,000 eligible first home buyers, the Government will guarantee the additional amount needed to reach a deposit of 20 per centThose first home buyers will be exempt from having to pay Lenders Mortgage InsuranceAvailable for singles earning less than $125,000 a year or couples earning a combined income of less than $200,000
On another positive note, the recent announcement by Australian Prudential Authority (APRA) to revise mortgage serviceability rules, by cutting the 7% servicing test required by borrowers and replacing it with the loan interest rate plus 2.5% , could give first home buyers an extra $50,000 (on average) to spend on their dream home.
Will the Royal Commission recommendations still make it difficult to get a loan?
No bank wants to be the first to get in trouble from regulators, so they have and will continue to impose stricter lending standards on home loan applications, making it harder for Aussies to access home loans. I see my role as a mortgage broker as pivotal in ensuring that your customers are able to navigate through the strenuous process of securing a home loan and reap the benefits of APRA’s easing of mortgage serviceability rules.
The Coalition will continue it’s fight with the big banks on financial misconduct, enhancing the responsibility and funding of industry Regulators to better protect consumers.
As a small business owner, how will the Coalition’s policies help me grow my business?
A trend we’ve seen prior to federal elections is that businesses tend to slow down as they are weighing up their options and are hesitant to make big commitments before the results come in. Changes in federal policies can have a big impact on small businesses, and thankfully the Coalition have pledged their undying support for small Australian businesses, with the intent to create more jobs and boost the economy.
This is a big win for small businesses as the Coalition has pledged to reduce the corporate tax rate, and increase the instant asset write off from $20,000 to $30,000 on 30 June 2019. Business owners will be able to invest in new equipment and tools that they need, and claim the write off (for assets under $30,000), saving those precious $$$ to invest elsewhere.
On a final note, there has been a sigh of relief across the mortgage broking industry with the Coalition win, as brokers will continue to be paid the same with upfront and trail commissions, until reviewed in three years time This win gives a boost of confidence to brokers in the work that they do in getting the best outcome for our customers. Thank you all for your support and confidence through the time of uncertainty.
I make it my job to be across all this to keep you informed. Feel free to drop me a line if you have any questions.