Despite a real estate market that has been stuck in its longest period of negative growth in more than a century, the federal election campaign is not a tipping point for the Australian property market. This is because it will take years to understand the full impact of any changes the next government will make. The proposed changes Labor wants to impose on the property sector include a tax on foreign buyers; the reintroduction of land taxes in some states; national property listing rules; and a review of Australia’s foreign investment rules. Overall, the Labour win property market connection highlights how these proposed policies could reshape housing and investment trends in the coming years
While Labor says that each of these measures will raise about more than $3.6 billion, at least half of this is likely to be offset by the cost of making the changes. However, the level of these offsetting measures remains unknown, which means there is no guarantee that this will be enough to make the policies financially viable. There are also other risks to the financial soundness of the property market. These risks include rising interest rates, slow or stagnant wage growth, policy uncertainty, and slowing population growth.
Higher Interest Rates – Top Concern of Investors
Higher interest rates are likely to be a top concern for investors who already own properties and who will see the value of their investments decline if rates go up. One way to avoid the reduction in the capital gain would be to sell, but there is not much time left until the next election is called, and to sell now before the capital gains tax discount on assets is increased for certain investors.
While there is a general fear that house prices may fall, current market conditions don’t suggest a downturn is due any time soon. For now, house prices are continuing to grow, though there are signs of slowing. The labor win is most likely to have a positive impact on first-home buyers and owner-occupiers, who are more likely to benefit from any increased competition in the housing market from new build properties.
As long as there is demand for properties and a strong global economy, the steady supply of new housing units is likely to continue in the property market of Australia.
Coalition’s Emissions Reduction Fund and Future Manifesto
Labor has also promised to repeal the Coalition’s Emissions Reduction Fund – a scheme that reimbursed big polluters for cutting emissions. The repeal will take another two years to happen and another two years for the government to decide on whether it will allocate the money to another fund. Labor says the move will bring an end to the “current Commonwealth approach to climate policy and will ensure Australia returns to a clean energy future.”
Labor has also proposed national territory listing laws that would apply in WA, NT, the ACT, and parts of the mainland, including parts of Tasmania. This would not include rural and regional landholders or Aboriginal communities. Instead, regional councils would be the key decision-makers on national parks. Labor will likely have to compromise on this after saying they are looking to pursue a decentralized model.
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Key Impacts of Labour’s Win on Australia’s Property Market
1. Immediate Market Rebound: What
the Data Shows
Australia’s property market responded strongly to the Labor Party’s election win. Auction clearance rates climbed to around 70%, signaling renewed buyer confidence. Analysts attribute this surge to reduced political uncertainty and speculation of upcoming interest rate cuts.
Why It Matters: Highlight this early momentum for readers to understand short-term market dynamics.
2. First-Home Buyer Support: Low Deposits & Shared Equity
Labor’s policies are easing entry for first-time buyers:
- Expansion of the First Home Guarantee, allowing purchases with just a 5% deposit, backed by government guarantee to bypass Lenders Mortgage Insurance (LMI).
- The “Help to Buy” shared equity scheme lets the government co-invest—buyers can enter the market with as little as 2% deposit, with government taking a share in the property.
Why It Matters: This significantly lowers upfront barriers for new homeowners, a key traffic driver if highlighted clearly.
3. Housing Supply Commitments: Ambitious Targets vs. Reality
- The Housing Australia Future Fund with $10 billion earmarked to build 30,000 new social and affordable homes in 5 years.
- The National Housing Accord aims to deliver 1.2 million homes by 2029—a national-scale goal that currently sees slow ground-level delivery.
Why It Matters: Help readers grasp ambitious policy vs. on-ground progress—adds depth and trust.
4. Impact on Investors: Tax, Builds, and Risks
Investors face a mixed outlook:
- No immediate negative gearing or CGT changes, providing short-term certainty.
- Build-to-rent incentives (tax benefits, depreciation) may redirect investment toward institutional projects.
Duo Tax Quantity Surveyors - However, increased affordable housing supply could dampen rental yields and capital growth in some segments.
Why It Matters: This nuance helps property investors reassess strategies—ideal for extended dwell time.
5. Affordability Gap Widens
Despite policy efforts, affordability remains fragile:
- Home prices soared 47% over five years, while wages rose just 20%, worsening affordability.
- Key markets are now largely unaffordable; rising debt and sluggish wage growth add pressure.
- Labor’s housing schemes may unintentionally fuel price increases—some forecasts suggest 6–10% property price growth in 2025.
Why It Matters: Readers understand policy intent vs. real affordability outcomes—crucial for long-term engagement.
Final Thoughts
Labor’s election win has injected fresh momentum into Australia’s housing sector. First-home buyers are benefiting from lowered entry barriers via low deposit and shared equity schemes, while investors see stability and incentives like build-to-rent. Yet, lofty targets for new homes and challenging affordability trends remain unresolved. As home prices outpace wages and construction lags, the reality of housing access stays complex.
