How will the Federal Election Affect the Housing Market?

Overall, the housing market has recently shown some tentative signs that the downturn in dwelling values is losing some steam. Although this is a positive development, the outlook for the housing market will continue to be affected by uncertainty related to the federal election, lending policies and more broadly, domestic economic conditions.

Federal elections generally cause uncertainty, which is likely amplified more so this time around considering the potential for a change of government which will also involve significant changes to taxation policies related to investment.

No doubt, some prospective buyers and sellers are delaying their housing decision until after the election. However, there is no guarantee that certainty will improve post-election considering the impact of a wind back to negative gearing and having the capital gain tax concession largely unknown.
It seems reasonable to assume that removing an incentive from the market would result in some downwards pressure on the activity and prices for a period of time.

If elected, the Opposition have flagged that changes to the capital gains tax discount and negative gearing would take effect from January 2020.