Banking Royal Commission
Looking back on the last 10 months since the start of 2019, it has been a wild ride in every aspect including the property market, we have seen a banking royal commission which put the brakes on lending which in turn made buyers as scarce as hens teeth, the big 4 banks bunkered down and made things very hard for the average punter to borrow which allowed the 2nd tier lenders and other lending institutions to take a good chunk of the lending business, I hear Macquarie Bank were rubbing their hands together for some months.
There was a state election which was completely overshadowed by the federal election, which went against experts predictions, it had the same feeling as the unlosable election with John Hewson back in 1993 when the introduction of the GST divided the nation, this time it was the abolition of negative gearing. So what is the lesson for our politicians? Don’t take a tax measure as the cornerstone of your campaign into an election.
There were three interest rate cuts by the RBA after a record breaking run of 36 months without an interest rate rise or cut, all came in quick succession and had the property market in a spin, it has fuelled the current surge in prices and has also enticed investors back into property with negative gearing staying in place and the returns being better in property than the banks even without taking capital appreciation into account.
Looking forward to 2020
2020 should be more subdued than 2019, no scheduled elections, no ongoing Royal commissions and no Rugby World Cups although the Olympics will be on in September so that should be a good distraction for everybody. Things to keep an eye in the coming year is the US/China trade war, Trumps twitter account and the number of properties hitting the market, as we move off the perceived “bottom of the market” we should see stock free up and more to choose from, we hope!!!!