Parramatta Blog

With the Australian Labor Party securing another term in office, attention is quickly turning to how their housing policies will affect the property market. While renters and social housing often dominate the headlines, the real question for many Australians is: how will this impact sales activity, especially for investors and first-home buyers?

Here’s a breakdown of what Labor’s election win could mean for those looking to buy, sell, or invest in Australian property.

1. First Home Buyers: Help to Buy Could Shift the Game

Labor’s flagship housing initiative, Help to Buy, is designed to lower the barrier to home ownership. Under the scheme:

• Eligible buyers can co-purchase a home with the federal government, which contributes up to 40% of the property price (30% for existing homes).
• Buyers only need a 2% deposit, and don’t have to pay Lenders Mortgage Insurance (LMI).
• It's available to 10,000 buyers per year.

What It Means:

This could drive increased competition at the lower end of the market, especially for homes under the scheme’s price caps. Vendors with properties in these brackets may see stronger demand, while first-home buyers will have a new path into ownership — especially in major metro and regional markets. 

2. Investors: Stability in Tax Settings, but Policy Watch Required

Unlike previous elections, Labor steered clear of contentious tax reforms. That means:

• Negative gearing remains untouched
• Capital gains tax concessions stay in place

This stability provides some confidence to investors wary of policy risk. However, investors should prepare for:

• Increased scrutiny and regulation, particularly around energy efficiency and tenancy standards
• More competition from institutional investors in the build-to-rent space, which Labor continues to support

3. What the Tax Debate Really Means for Homeowners and Property Investors

While Labor has promised no changes to negative gearing or capital gains tax — providing reassurance for many investors — a recent debate in Parliament around taxing unrealised capital gains in superannuation has stirred some uncertainty in parts of the market.

The proposal targets super balances above $3 million, and while it doesn’t directly affect most everyday homeowners or investors, the concern lies in how these types of reforms could influence broader attitudes toward asset ownership, especially for those holding property inside Self-Managed Super Funds (SMSFs).

Assistant Treasurer Stephen Jones defended the policy, highlighting that similar taxes already exist in areas like land tax, and that most impacted assets (like property) tend to generate income that can cover any liabilities. Still, others — including Independent MP Allegra Spender — raised concerns about the flow-on effects this could have on liquidity, investor sentiment, and venture capital funding.

What It Means:

If you're a homeowner planning to sell, or an investor thinking long-term, this conversation is a reminder that tax policy can shift — and being informed is key. For now, the fundamentals remain strong: property continues to be a stable, income-generating asset, and no direct changes are being made to how real estate is taxed.

But it's also a good time to review your ownership structure (e.g., SMSF, individual, or trust), especially if you're approaching the higher asset brackets, to ensure you're set up to adapt to any future policy refinements.

4. Sales Market Outlook: Balanced but Sensitive

Labor’s focus on supply-side reform, such as easing planning restrictions and funding affordable housing, could gradually increase available stock. However, these changes will take time to filter through.

In the short term:

• Demand from first-home buyers could rise, increasing turnover in entry-level markets
• Stable investor tax policy may encourage more activity in growth corridors and regional hubs
• Affordability constraints and interest rate pressures may keep a lid on rapid price growth

 

Final Takeaways for Buyers and Sellers

Labor’s election victory brings renewed clarity and confidence to the housing market, with a strong focus on boosting homeownership and creating a more accessible pathway for Australians to enter the market.

For first-home buyers, the Help to Buy scheme is a game-changing initiative that significantly lowers the barriers to purchasing a home — offering a rare opportunity to get on the property ladder sooner.

Sellers, particularly in the sub-$800,000 price range, may benefit from increased buyer activity as more Australians take advantage of new incentives.

For investors, the stability of negative gearing and capital gains tax rules provides a solid foundation to plan with certainty, while ongoing support for housing supply and sustainable development may unlock fresh opportunities in emerging markets.

The outlook is positive: Labor’s balanced approach aims to support both homeownership and investment — setting the stage for a healthier, more dynamic property market in the years ahead.

Written by Allana Kazzi