Industry players call for creation of Federal Housing Ministry
An 11-year high surge of $33 billion was added to the ASX yesterday in response to the Coalition's return to government on the weekend. Markets were delighted at the prospect of the economic stimulus the Morrison government's tax package should bring, and the high likelihood that the Coalition will hold a majority in the Lower House once counting wraps.
Nikko Asset Management's Brad Potter said yesterday that as a result of Australia dodging the twin bullets of changes to negative gearing and capital gains taxes, we could be "closer to the bottom of the housing market."
One stock that caught some of the investor love flying around yesterday was Australia's largest listed residential developer, Stockland which surged to a 10-month high.
Speaking of stimulus, the timing of the election could mean the Coalition's tax packages are delayed according to the ABC. ScoMo can't reconvene Parliament until the count is finalised, and that may not happen until mid-June - which leaves scant time to pass cuts before June 30. The silver lining here however, is that Labor is considering listening to the Australian people and passing the cuts wholesale when Parliament does resume.
If it does, that'll surely be the only time. Today's AFR View column lays out the need for the Morrison government to take advantage of its majority, the reduction of dissenting voices on the back bench, and less-divisive Senate to start driving an agenda - and put behind it the small beer focus of the past two terms.
For now though, sentiment is strong. UBS told the market yesterday that the Coalition's win will "put a floor" under the housing sector. "While this (election result) likely has limited impact on our credit tightening thesis, it may stabilise sentiment, and hence materially reduces downside risk to the UBS outlook for housing and the negative wealth effect on the consumer and economy."
Mortgage Brokers are delirious this week, not least due to the fact that the prospect of losing their trailing commissions under Labor has evaporated. Retailers are also relieved at the expectation consumer confidence will improve and risks of further downward pressure on housing have been reduced.
Rich-lister property developer, Nigel Satterley has gone so far as to suggest we need a Federal Housing Minister in Canberra. Property Council of Australia and Master Builders Australia have backed him up, calling for a portfolio that incorporates housing, cities, infrastructure and building regulation.
And competition among home lenders appears to be heating up again. CBA, AMP and ME Bank are cutting fixed and variable rates, while St George is upping cash incentives. Bankwest has cut its three-year fixed rate on owner-occupied loans by 50 basis points. According the Canstar, smaller lenders will follow to remain competitive.