Finally! A property Prime Minister

I try not to get too caught up on politics, but there’s part of me that feels a glimmer of hope with Scott Morrison taking the big chair.

Scott gets property.

I don’t know if everyone knows it, but Scott Morrison worked at the Property Council of Australia for 6 years. I think he was Chief Economist or something like that.

Anyway, he must understand the importance of property in the Australian economy, the contribution property investors make, and I think that means we should expect solid support for the property market from Canberra in the months ahead.

Indeed, in his maiden speech, he made property a key focus:

“Menzies talked about the other things that were needed, you know, he talked about a ‘comfortable home’ and an ‘affordable home’, as important today as it was then.

One of Menzies’ greatest achievements was the increase in home ownership, and affordable home ownership.

I think it went from around 40 per cent to around 70 per cent.

We’ve slipped back a bit from there. We need to do better on that score.”

So it seems like affordability and ownership is going to be a focus. Still, we’ve heard that before and both are incredibly tough nuts to crack.

And really, both require coordinated responses. There’s not much Canberra can do if the states aren’t overhauling their planning systems.

But what can we really expect from Scott?

Well there’s a few things I reckon. As Treasurer, Morrison was the key architect behind the Home Saver Scheme, which aimed to help first home buyers save for a deposit.

This didn’t have a huge impact, but it was a step in the right direction.

Morrison also did a study tour to London to look at their HELP scheme – where the government effectively loans first home buyers money for their deposit.

So I think we could see some measures like this, aimed at helping buyers get a deposit together. We could also see some Federal shared-equity schemes, where you co-purchase with the government, and slowly pay them out over time, or when you sell.

I don’t think we’re going back to the days of the First Home Buyers Grants or anything like that. I don’t think we’ll see the government just handing out cash. It’s going to be more sophisticated than that.

But any support they give to first home buyers is obviously going to put more activity into the more-affordable end of the property spectrum.

It’s probably not such big news for our premium property markets, but that’s ok. They’ll be alright, don’t worry about them.

The other thing I’d be expecting from Morrison is a serious and sophisticated attack on Labor’s negative gearing reforms.

I don’t think this is a political question for Scott. It’s one of ideals. So I think he’ll fight it tooth and nail.

That means it’s shaping as one of the key election battle grounds.

I think Labor has welded itself to this one now, but some fierce opposition might give them pause for thought. Morrison might be able to extract some further concessions.

We might see Labor take a slightly softer approach, and that might not be a bad thing.

And anything else?

Well, we’ll have to see. There’ll probably be a surprise or too.

But the key point is that this is a positive for property. We have a PM ideologically committed to property, with enough experience to understand how the game actually works.

That’s got to work in our favour, right?

Spiro Kladis
Managing Director, Cashflow Capital

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