Buyer activity has mostly defied expectations despite uncertainty created by three interest rate rises and investor tax reforms, with open home attendance largely unchanged from last year.
Despite heightened uncertainty in the market following recent rate rises and the government’s tax reforms, buyer activity has been more resilient than anticipated, according to new data.
Research from Raine & Horne showed national open home attendance in May was only 1.45 per cent down from last year, suggesting genuine buyers were still active despite some investors opting to wait and see.
Raine & Horne executive chairman, Angus Raine, said the current conditions presented classic counter-cyclical opportunities that experienced investors often sought out.
According to Raine, periods of policy uncertainty often led to reduced competition, enabling more seasoned investors to secure quality assets without the intensity that can accompany stronger markets.
“The period between now and the next election represents a great window of opportunity to enter the residential property market while others sit on the fence,” he said.
Raine said the best opportunities often appeared when uncertainty kept others on the sidelines, with the most successful investors thinking in decades, not election cycles.
“Tax policy matters, but it’s only one factor. Population growth, limited housing supply, and long-term capital growth are equally important considerations.”
He said Australia’s long-term housing fundamentals remained solid, driven by population growth and housing undersupply, adding that housing policy had evolved many times over the decades.
“History shows that housing policy evolves over time, and governments of all persuasions have adjusted or reversed measures when unintended consequences emerge.”
“Governments come and go, but quality property held for the long term has consistently rewarded patient investors.”
To make the most of the current period, Raine said investors should consider the full range of residential opportunities, including studios, apartments, and small blocks of units, rather than just houses.
He said that investors should avoid making decisions solely based on the current tax debate and involve their accountants in the decision-making process.
“Periods of market uncertainty have often rewarded investors prepared to take a disciplined, long-term approach,” he said.
“And if history is any guide, there’s every chance that changes to negative gearing and capital gains tax will be revisited down the track, as this government will not last forever.”
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