Election Promises...& the property market

Politicians and their promises :)

Having worked in the property industry for the last 25 years I can say with complete certainly that I've witnessed a LOT of government incentives and schemes for home ownership. Just about all those schemes and incentives are around newly built property. The main reason for this is the construction industry plays a huge role in the health of the economy. There is such a masive flow on affect for construction materials, trades people, other government fees like stamp duty and other associated industries. So it's any wonder that politicians always want their schemes to push the construction of new homes. That's without even mentioning immigration and an overall undersupply of homes for people to live in across the entire country.

The biggest problem with the above is all these new properties whether they be house & land, apartments, or townhouses are built by developers and builders. These are business people. They are in business to make a profit. The moment they get a sniff that demand is about to increase (through government incentives) they raise the prices - ALWAYS.

I've been to meetings with developers where they take to the price list with a red pen and add 20-40K extra per dwelling and as long as the properties sell they ride the price until the market doesn't buy.

The affect of the above is these people to whom the incentives apply simply end up paying more for the property. Generally the same amount that they are being given by the government in an incentive.

You see it's not that Politicians want to solve any housing issue with their promises, they simply either want to get in office or stay in office and so roll out pre-election a raft of new incentives to win votes. If they did want to solve it they would address the underlying fundamentals of supply and demand. And yet that is never resolved.

So.... how should a savy property purchaser try and navigate the above scenario?

1. Stop thinking you can get rich quick, play the long game.

2. Have the courage to not follow the herd or a Politician and his election promises.

3. Stop thinking there is a perfect property, it doesn't exist.

4. Buy within your means and allow for interest rates to move, don't box yourself into a corner and be leveraged to your eyeballs.

5. Surround yourself with professional people you trust.

6. Educate yourself, but not at the point of inaction.

7. There is no one size fits all property purchase, your personal circumstances dictate what is best for you.

8. Patience, believe me there is always another "today only opportunity."

   
   

   If you're new to the property market and have questions we've created a brand new facebook group called

1. You can ask anything!

   
   

   Good Luck!

   

   Andrew Nott