It’s refreshing to have a property-focussed prime minister.
Apart from his $19 million mansion, Malcolm Turnbull and his wife Lucy own other residential, commercial and rural properties.
So even though he declared “everything is on the table” in his current review of the tax system, it’s unlikely anything is going to affect property.
However governments come and go. Prime Ministers do too, apparently quite regularly!
So even though the property market is in safe hands at the moment, could a future government destroy the property market?
After all, negative gearing gets thrown around a lot. And changing it could mean a serious hit on the hip pocket.
Worse still it could suddenly make investing unattractive, strip a massive chunk of buyers out of the market and see prices plummet.
I’m not worried at all.
You see …
… the government can’t (and won’t) let property fall.
There’s a couple of reasons why.
First, it would be electoral madness. No home-owner is going to like seeing $100,000 or more wiped off the value of their house.
Besides, there’s over 1.7 million property investors. Which is a lot of votes going begging.
Any government who did would be obliterated in the next election … if they lasted that long.
So now the second reason.
And it’s that construction is one of the nation’s largest industries.
It’s so huge it employs over 1 million Aussies.
And there’s no way the government would jeopardise that.
“But what about shares” you might be thinking. “Surely the government can’t let them fall either”.
Put it this way.
At the end of 2011 BHP (The Big Australian) shares were
over $69 close to $45. Today they’re under $21.
That’s over 50%
70% of their value which has been wiped off in 4 years. The government can’t and won’t protect your shares like they protect property.
So while property may have the odd dip here and there, the overall trend has been one of enormous growth.
And no matter what, our property market will continue to grow strongly with the full support of the government who can’t afford it any other way.
I’d love to hear your thoughts on this.
Please leave a message below and let me know what you think.
PS: Apologies – we had a slight error in our numbers for BHP which have now been amended.