Episode 293: Property Policy Showdown - Labor, Coalition, and One Nation

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What happens to Australian property prices, rents, and housing affordability when government policy changes?

In this episode of Perth Property Insider, I take a completely non-partisan look at how the housing policies of Labor, the Coalition, and One Nation could reshape the Australian property market.

I break down what each party's policies actually encourage and what that means for property prices, rents, housing supply, migration, inflation, interest rates, and investor confidence.

Because here's the truth: if you're serious about building wealth through Australian property, understanding these economic drivers matters far more than predicting who wins the next election.

In this episode you'll learn:

✅ How Labor's housing policies could affect investors and tenants…and why the outcome may surprise you
✅ The real impact of migration on Australian property prices and rents

✅ What the negative gearing and capital gains tax changes mean for investors

✅ Whether reducing investor demand actually improves housing affordability

✅ How Coalition policies could influence housing supply and investor confidence

✅ What One Nation's housing policies may mean for affordability and property growth

✅ How inflation, interest rates, and government spending shape the property market

✅ How to build a property investment strategy that works under any government

Let’s go inside 👇🎙️

Episode Highlights:

1. 00:00:00 Intro
2. 00:03:20 Labor's migration settings
3. 00:06:40 Rental supply irony
4. 00:09:40 Coalition's balance play
5. 00:12:40 One Nation's investor cap
6. 00:15:40 How to vote proof your portfolio

Resource Links:

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• Take our Property Investor Readiness Scorecard to uncover your blind spots and make smarter investment decisions before you buy: https://investorsedge.scoreapp.com/
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Episode Transcript

[00:00:00] Welcome back to Perth Property Insider. Today's episode is a little different. We're not talking about suburbs or interest rates or development opportunities. We're talking about politics. Now, before half of you switch off, this is not gonna be about whether Labor or the Coalition [00:00:20] or One Nation is good or bad.

I honestly wanna leave your voting choice to you, and that's your decision. But today, I wanna look at purely through one lens. What could these different policies mean for the Australian property market? Because regardless of your political [00:00:40] views, government policy changes behavior. It changes the incentives that drive the market.

It changes the confidence in buyers and in sellers. It changes the supply that's coming on and, and that's created through new housing. It changes the demand that we have from immigration and from people wanting to get [00:01:00] into the market or not, people wanting to make their changes, wanting to invest. And those things ultimately affect property prices, rents, and investment decisions So one thing I've learnt over these decades, almost, you know, 20 years, is that every policy has [00:01:20] intended consequences and also unintended consequences.

And sometimes the people that a policy's trying to help aren't actually the ones who benefit, and things kind of backfire. And sometimes the people everyone thinks will lose actually ender up- end up much better [00:01:40] off. So today, I want to remove the politics and simply ask, if each party implemented their policies, and of course, it, it can never just be as simple as that, but if they could, what might actually happen?

So before we start, one thing I might encourage you to do while listening is don't ask yourself, [00:02:00] "Which party do I like?" Instead, ask, "What behavior will these policies encourage?" Because property markets don't respond to intentions, they respond to incentives, and that's what we're really analyzing today.

And of course, I'm gonna combine it with what's happening in the real world, what I'm seeing on the ground [00:02:20] already starting to unfold, and then extrapolate that, uh, forward. So let's look at Labor, seeing as they're the government in power at the moment, we're having to deal with their, uh, policy settings that they've put in place.

Their obje- objective is pretty clear. They wanna reduce investor demand for established [00:02:40] housing. They wanna encourage investors to fund more new housing, and they wanna help first homebuyers and increase housing supply. That's what they state anyway. And, and that's what we see on paper. It sounds logical.

I mean, I think almost everyone agrees that Australia [00:03:00] desperately needs more homes. And where I think the debate actually begins is whether these policies will actually produce that outcome. So when we take a look at demand, the first thing I want to think about is that- Labor's consistently maintained relatively high immigration [00:03:20] levels.

Now, migration is fantastic for the economy in many ways. It fills the skills shortages that businesses need to grow. It supports businesses in doing that. It grows our GDP, or gross domestic product. But every person who arrives also needs somewhere to live, don't they? And [00:03:40] that's where I think we have a problem, because we simply aren't building homes fast enough.

So if demand keeps increasing faster than supply, prices and rents generally rise. It's not political, it's just economics 101. Now, with investor confidence, this is the second area I think [00:04:00] about, because private investors currently provide the overwhelming majority of rental accommodation in Australia, and Labor has deliberately made investing in established property less attractive through the changes to negative gearing and capital gains tax that they've just rolled out through their budget.

And their [00:04:20] theory is that those investors will simply go and build new housing instead. And personally, I'm not convinced, because investors don't buy property because of tax. They buy property because the numbers stack up. They look at yield, they look at capital growth potential, they look at the cash flow that they're gonna be left with, location, [00:04:40] construction risk, builder risk, land value, and ultimately, they look at the future demand for that to underpin the growth potential, underpin the value, underpin, underpin the, the yield and cash flow.

So many new properties simply don't stack up, especially at today's construction costs. And some investors [00:05:00] absolutely will move into doing developments. They'll look at the deal key income properties. They'll look at subdividing and creating on their existing properties that they own or purchasing a new one to do that And some of them will look at new housing, but I don't believe that's gonna be anywhere near the number of investors that were buying established.

[00:05:20] I don't think it's gonna be anywhere near enough to create extra rental supply that is not, uh, being added now through everyone pulling back from established properties. So the next area I'd like to look at is inflation and what does their policy settings do for this area. Because labor has [00:05:40] continued spending heavily across the economy, and now government spending is- isn't automatically bad.

But if the government's stimulating demand while the Reserve Bank is trying to slow demand, it potentially makes inflation harder to control. And that means that interest rates may stay higher for [00:06:00] longer or potentially increase further. And again, that's not politics. That's simply how monetary and fiscal policy interact.

And higher interest rates mean less borrowing power, more expensive developments, lower affordability, and weaker buyer confidence. And that's what's smashed buyers' confidence the most, [00:06:20] is seeing those three recent interest rate rises. And a lot of that is on the back of trying to curtail labor's ex- high stimulation of spending, as well as, uh, some of it is to do with the Iran war and increasing, uh, fuel prices.

So the irony is, and this is definitely worth considering, [00:06:40] think about this. Here's what I'm, I'm thinking. If fewer investors buy established homes, who buys them? Well, owner-occupiers do. It sounds good, except every investor that sells removes a rental property from the market. And meanwhile, migration is set to remain strong under labor, [00:07:00] so the rental demand is gonna stay high while rental supply slowly shrinks and it's not being added to.

That's a recipe for higher rents, and we've already seen that starting to move up more aggressively. And ironically, the people that labor are trying hardest to help, the tenants, [00:07:20] may actually end up much worse off Existing property owners, on the other hand, could become the biggest winners, I think, because scarcity's gonna increase, rents will increase, yields are, will improve, and eventually investors may come back into the market anyway because those improving [00:07:40] yields will become too at- attractive to ignore.

And people will start to get their confidence, they'll start to get their heads around having those deferred losses that they can offset against future gains, not losing them entirely, really deciding at some point that established is still what makes sense, not going to new. [00:08:00] So my concern is rather than fixing affordability, we may simply end up creating a much more expensive rental market.

Now let's take a look at the Coalition. Again, I'm not interested in personalities, I'm interested in incentives, and the Coalition appears to be taking almost the opposite approach. [00:08:20] Restore investor confidence by throwing out the, the tax changes. Reduce government spending, which will bring down inflation.

It match migration more closely to housing supply as one of their key policies. They want to encourage private investment, and personally, I think this [00:08:40] has the potential to create the healthiest overall balance Why? Because I think the property markets work best when demand and supply stay relatively aligned, not demand excessively exceeding supply, and not supply excessively s- exceeding [00:09:00] demand.

I mean, no one wants prices to drop through the floor except for perhaps those that haven't yet gone in, into the market. And as soon as someone becomes a property owner, all of a sudden they want their prices to be preserved, and that's why many first-time buyers are worried about getting in with all the negative media and what they're seeing happening in Sydney and Melbourne, 'cause [00:09:20] they don't wanna be in a negative equity position.

So we do need stability in prices. We don't want them to, to drop. That's not the key to improving affordability necessarily. Now, the other area let's take a look at for migration that what's the s- the settings for the Coalition and how that's gonna impact. Well, one policy I particularly [00:09:40] like is linking migration more closely to housing delivery, because Australia absolutely benefits from migration, but surely it makes sense to match that population growth with our ability to house people.

Otherwise, we're constantly chasing our tail, and that doesn't ste- mean stopping migration. It simply means [00:10:00] building enough homes first. So I really like their ideas on that. Inflation, the second part, is reducing government spending. So if inflation falls, the Reserve Bank doesn't need to keep rates as high.

If rates eventually fall, borrowing capacity will improve, developments become more viable, confidence improves, businesses [00:10:20] invest, consumers invest, and again, nothing is guaranteed, but the direction makes sense, doesn't it? Then when we look at the third area of investors, the other thing I think happens here is that if investors can regain confidence, and I see that more happening under the settings of the Coalition, instead of forcing [00:10:40] investors into new housing, they can simply choose whichever opportunity stacks up best.

Some will still build, some will buy established homes, some will subdivide, some will renovate. Markets generally work better when investors are following fundamentals rather than chasing tax policy. Overall, [00:11:00] a lot more confidence to those settings. So the outcome, I think, under the Coalition would be that it probably creates more new housing, more Rental housing, less pressure on rents because of the migration settings and those other creation of new housing, you know, reducing the pressure.

[00:11:20] Less pressure on interest rates because of less government spending and healthier overall confidence from all camps. And does that mean that property prices don't grow? No, I think they'll probably still grow, but just in a healthier, more sustainable way, and I think that's what we all want. So let's now take a look at [00:11:40] One Nation.

This is probably the most interesting because their policies attacked demand much more aggressively. They're talking about substantially reducing migration, limiting negative gearing to two investment properties, reducing building costs, increasing housing supply. And some of those ideas I actually think have [00:12:00] merit.

I mean, reducing construction costs, great. Improving housing supply, absolutely. Those things are desperately needed. But my biggest concern is demand. Australia's property market has been supported for decades by strong population growth, and if migration falls dramatically, housing demand also [00:12:20] falls, which means less pressure on rents, more housing availability, better affordability.

That's fantastic for tenants and anyone wanting to get into the property market to buy a place. But it's probably not fantastic if you already own property because price growth becomes much more subdued [00:12:40] and potentially some markets even fall. And potentially you don't get the, the people wanting to get into property because of that negative equity scare that we're seeing at the moment.

And then when it comes to investors, One Nation are looking to limit the negative gearing, uh, to two properties. And for most Australians, [00:13:00] that's not gonna matter because most people don't own more than two investment properties. But for serious investors, people trying to build substantial portfolios, it changes the equation significantly Holding larger portfolios becomes less attractive, and that may reduce the future rental pool as well.

So overall, [00:13:20] when I look at One Nation, I actually think good for tenants, potentially good for housing affordability, potentially good for reducing building costs, reasonably good for small investors, but perhaps not particularly good for any existing property owners. And the [00:13:40] confidence in moving from being a tenant into a property owner would be probably the sticking point of making this all work.

Because if prices aren't supported, w-why would you wanna go and become a property owner? Um, and not particularly good, I think, for people wanting to build significant wealth through larger property portfolios, and that's [00:14:00] not necessarily what everyone wants to do. There'll be sort of two camps in that as well.

There'll b-be those that are really stretching to build the larger portfolio, and there'll be those that can… that aren't gonna be affected, that can easily afford to. And I'm sort of more worried about the aspirational person that's trying to get ahead and stretching that doesn't r-really have the money, that may have to be [00:14:20] forced to sell a few properties if they can only afford to negative gear a couple of properties.

So wrapping it all together, if I had to summarize each approach, I'd probably put it like this: Labor is trying to redirect investment into new housing. My concern is that we, if we reduce rental supply [00:14:40] before we've increased overall housing supply, that may actually make tenants much worse off, and I'm seeing it happen already.

And while existing property owners become big winners medium term, I, th-there's a lot to contend with in the short term and, uh, whether they actually blow everything up. Now, with the Coalition, [00:15:00] it appears to be aiming for balance. Match migration with housing, reduce inflation, restore investor confidence, encourage more private housing.

And personally, that's the policy mix I think has the best chance of producing sustainable outcomes for tenants, investors, and homeowners alike. When I look at One Nation, [00:15:20] they're trying to tackle affordability by reducing demand much more aggressively, and that may absolutely help tenants But it may also significantly reduce long-term property growth and take away the incentive for tenants to become a property owner.

So final thoughts. The [00:15:40] biggest mistake investors make, I think, is investing based on politics. Governments are gonna change, so we don't wanna go making, you know, future forever decisions based on, uh, what's gonna happen in the next 18 months before the election. Policies are gonna change. We may see the current settings reversed, altered.

Markets are gonna [00:16:00] adapt. So the best investment decisions, I think, are gonna be based purely not on, uh, never gonna be based on who wins the election. They're gonna be based on fundamentals, which is scarcity, supply and demand, cash flow, choosing quality assets and holding them for the long term with having [00:16:20] a clear strategy to optimize what you're doing.

So rather than trying to predict which party will win, I'd encourage you to ask a better question. If any one of these three policy directions became reality, would my portfolio still perform well? Because if the [00:16:40] answer is yes to that, I think you're probably holding the right assets, and if your strategy only works under one government, it's probably not a very robust strategy.

Thanks for joining me on today's episode. If you've enjoyed it, like and share it with friends, and I'd love to see any comments on YouTube. Um, get in there and, uh, let [00:17:00] me know what you thought. And of course, I'd, I'd appreciate any, uh, reviews on Spotify and, uh, iTunes. So until w- next week, I'm looking forward to coming to you with, uh, the latest thoughts, and, uh, have a good one