Property’s bumper policy week will lift house prices soon

https://www.afr.com/real-estate/residential/property-s-bumper-policy-week-will-lift-house-prices-soon-20190524-p51qpk

Tim Boy and Lucas Baird| Australian Financial Review| 25 May 2019

A suite of favourable policy proposals and drivers of property demand that materialised this week will not be enough to reverse falling house prices immediately but leading industry executives say a bounce is not far off.

The shock re-election of the Coalition government last weekend took Labor’s negative gearing and capital gains tax changes off the table and instead the sector awaits the Coalition’s first home buyer scheme. On Tuesday the prudential regulator loosened loan serviceability rules for banks and the following day the Reserve Bank gave its clearest signal yet it would cut interest rates in June.

It may have been a week to remember for property executives grappling with subdued demand, but Charter Hall Group chief executive David Harrison said the moves would take time to flow through to house prices.

“I think the first thing that will happen is you’ll see a [sales] volume increase,” he said. “The pricing impact will be more of a delayed result, but ultimately you will see price growth come back.”

Mirvac chief executive Susan Lloyd-Hurwitz said the results from the bumper week of policy news had filtered through to sentiment immediately.

“We have seen a better week, our inquiry levels are up. But I think it’s very early days and I’d like to see that turn into a trend,” she said.