RBC: Australia faces housing price decline if government changes - Bloomberg

As reported by Bloomberg, RBC analysts are noting that Australia's already-weak housing sector could face significant downside if the government were to change over in the upcoming election.

Key highlights

According to RBC, Australia is "likely" to see further-weakened housing prices and declining productivity under policy proposals being put forward by the main opposition Labor party, which is currently on-track to win the Australian election. RBC is calling for a 15% decline in property prices as the Labor party plans to introduce legislation to clamp down on tax breaks, while plans to clip investor perks could see annual consumption decline by 0.2%.

Under Australian laws, the latest that a federal election can be called will be May of next year, guaranteeing an Australian election within the next two quarters, and the incumbent Conservative party has begun trailing their main opposition in almost all major poll results.

Labor’s policies hew to a traditional line of higher taxing and spending to finance additional spending on areas like education and health. However, that doesn’t imply a deteriorating budget bottom line, with the party’s finance spokesman Chris Bowen promising to deliver larger surpluses than the incumbent Liberal-National coalition. - Bloomberg