Election reflection 2019
Have you been wondering how the election outcome could affect your finances or your chance of owning your dream home? Both parties promised big things for home owners. Here, Don Crellin, Managing Director, breaks it down into three simple points.
1. First home buyers to benefit
Although much of the detail is yet to be played out, the Coalition has committed to a $500m scheme which should allow eligible first home buyers to buy with only a 5% deposit rather than the standard 20%, and removing the cost of lenders mortgage insurance.
The program will be available to approximately 10,000 first home buyers with an income of up to $125,000 or couples with a joint income of up to $200,000, and will kick in from January 2020. Full details are still to come.
2. Personal tax cuts
Some households should be set to benefit from personal tax cuts of up to $1,080 per year, for those earning $50,000 – $100,000.
This is a clear win from a first home buyer perspective, providing them with greater ability to either save or reduce their debt to better position themselves for home loan approval.
As for existing home owners, the cuts coupled with the low interest rate environment provides the opportunity to more comfortably manage existing payments and the possibility to put a little extra away – offering the potential to save them thousands over the life of the loan.
3. Potential for an uptick the housing market
With the Liberal-led Coalition winning Saturday’s election, the housing market should respond positively to the Government remaining as is. While it remains open to debate as to whether recommended changes to housing policy as outlined by Labor during the campaign period would have been positive or negative for the market, the one thing we can be sure of is that the general uncertainty would have created a stall in any immediate upturn.
Importance of a competitive market when financing your home
The mortgage broking sector was very topical throughout the election campaign with both Labor and the Coalition taking slightly different approaches to policy.
There was, however, a common understanding from both camps that mortgage brokers play an integral role in ensuring the Australian financial services market remains competitive.
Recent data* shows an increase in the number of loans that have come via a mortgage broker, indicating the recent spotlight on our industry and resulting education of the market has ensued confidence.
Maintaining the current government provides a clear road map for the mortgage broking industry, allowing it to get on with the job it knows best – providing great customer outcomes while keeping the financial services market as competitive as possible.