The Federal Election 2016: Malcolm Turnbull and The Australian Housing and Mortgage Markets
The Australian Federal Election 2016 has finally come to a closure. Our nation is no longer in “limbo” since Malcolm Turnbull claimed his victory on 10th July 2016. The Coalition overtook Labor with at least 74 seats in Federal Parliament. Mr. Turnbull said that the election was resolved and done peacefully. “It’s something we should celebrate and not take for granted”, he said.
In the morning on that day, Bill Shorten contacted Prime Minister Malcolm Turnbull to formally conceded his defeat. Mr. Turnbull told reporters that, his granddaughter Isla was on his lap when the phone call came through. He proclaimed his victory with an emotional statement.
“It was a moment I will never forget. It is a beautiful reminder that we (politicians) are trustees, for future generations. We are trustees for the little grandchildren and of course their grandchildren.”
Bill Shorten raised his offer to partner up with the Turnbull government to find common ground and make the parliament work. Mr. Turnbull welcomed the enticement and is intended to work not only with the Labor but also with the new crossbenchers. Conceding that the Coalition had suffered at the ballot box due to Labor’s prosecution of a referendum on the future of Medicare, the Prime Minister said that “We need to make sure we have strong economy and guarantee that Medicare, education, our health services are well facilitated to let Australians feel secure.”
Meanwhile, following the election, Australian capital cities have recorded a clearance rate of above 70% clearance rate for the second week running, which strong results are mostly driven by Sydney and Melbourne. The low interest rate (1.75%) and the retreat of foreign buyers from Melbourne’s property market is said to have also created new opportunities for local buyers. The spokesperson of finder.com.au, Bessie Hassan reminded mortgage borrowers to be aware of their financial planning. It is undeniable that the current low interest rate is very attractive to people who are active in the property market. Hassan also mentioned that household mortgage in Australia is currently sitting at $245,000 per household, which figure is four times higher than the past 27 years. He suggests that borrowers should spare extra money approximately 2 or 3 percent higher of current interest rate as an anticipation to pay back the borrowings whenever there is an increase in interest rate.
Luci Ellis, The Head of RBA’s Financial Stability Resources also suggested that better lending and borrowing activities need to be regulated. She said that although APRA (Australian Prudential Regulation Authority) has put on further restriction on mortgaging policies towards property buyers, these policies apply differently towards mortgagers who generate foreign incomes. Ellis agreed that excessive lending and borrowing can result in the increase of non-performing loans. It is speculated that Australian may in fact might find some challenges in the current condition of low interest rate.