House values in Sydney and Melbourne continued to track downwards last month, but the recently concluded election should bring confidence and clarity to both markets, according to some property professionals.
Data from CoreLogic showed that prices in the capitals of New South Wales and Victoria dropped by 0.7% and 0.6% in April, pushing up their annual declines to 10.9% and 10%, respectively.
Sydney and Melbourne are now 14.5% and 10.9% down from their respective peaks in July and November 2017, extending their declines into far-off territory.
“What the election result does is give people a sense of stability, so there hasn’t been a change of government and some of the changes, particularly around negative gearing that people were worried about, are not going to happen now,” CoreLogic Research Analyst Cameron Kusher told news.com.au. "That probably gives the market a little more confidence.”
Many expected Labor to win at the polls on May 18. Had that happened, the proposed changes to negative gearing and capital gains tax might have had a negative impact on the market, according to Kusher.
He said, though, that there are still some issues for the housing market when it comes to recovery.
“Sydney and Melbourne have become very unaffordable. Interest rates are low, but it’s still a lot harder to get a mortgage than it has been over recent years," Kusher told news.com.au. “Maybe the rate of decline will slow a little bit, but I don’t see this yet as a turning point for the market that bottoming out is necessarily imminent.”
On the flip side of the coin, realestate.com.au Chief Economist Nerida Conisbee expects an earlier rebound for the market.
“I can’t see anything that is looking more negative as we head into the second half of the year,” she said. “There’s nothing really negative on the horizon now. The thing that will really push it will be if we see an interest-rate cut, and I think that will stimulate the market and get things moving.”
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