How will the Labor Party's victory influence the property market?

The Australian Labor Party's victory in the May 2025 federal election is likely to significantly influence the Australian property market, particularly across Queensland.

 First-Home Buyer Incentives and Market Dynamics

Labor's housing policies aim to make homeownership more accessible:

• 5% Deposit Scheme: Starting January 1, 2026, eligible first-home buyers can purchase properties with just a 5% deposit, eliminating the need for Lenders Mortgage Insurance (LMI). This initiative is expected to attract a substantial number of buyers, potentially driving up property prices.
• 100,000 New Homes: A commitment to build 100,000 homes over eight years, exclusively for first-home buyers, ensuring these properties are not available to investors.
• Extended Mortgage Terms: Proposals to extend mortgage terms from 30 to 40 years aim to reduce monthly repayments, making loans more manageable for buyers.

These initiatives are expected to increase demand in the $500,000–$1 million price range, potentially adding upward pressure on property prices.

Housing Supply and Construction

To address housing shortages and affordability:

• 1.2 Million Homes by 2029: Through the National Housing Accord, Labor plans to deliver 1.2 million new homes over five years, aiming to alleviate supply constraints.
• $10 Billion Housing Australia Future Fund: This fund is set to finance 30,000 new affordable homes over five years, targeting low- to middle-income earners.

However, achieving these targets may be challenging, given current sluggish construction rates and approval processes.

Implications for Investors

While first-home buyers receive significant support, investors face a mixed landscape:

• Tax Settings Maintained: Labor has indicated it will maintain existing tax settings, such as negative gearing and capital gains tax discounts, providing some peace of mind for investors.
• Superannuation Tax Changes: A proposed tax on unrealized gains for super balances over $3 million (perhaps $2 million) could cause investors to rethink their strategies. See separate article.

Investors may need to adapt to these changes, focusing on long-term strategies and aligning with new market realities.

Outlook for Brisbane and Queensland

In Brisbane and Queensland, these policies could lead to:

• Increased Demand: First-home buyer incentives may boost demand in affordable suburbs, potentially driving up prices in these areas.
• Construction Opportunities: Ambitious housing targets could stimulate the construction sector, offering opportunities for developers and tradespeople.
• Investor Caution: While tax settings remain stable, changes in superannuation taxation and increased competition from first-home buyers may prompt investors to reassess their portfolios.

Overall, Labor's election win is set to reshape the property landscape in Brisbane and Queensland, with significant implications for first-home buyers, investors, and the construction industry.