As we hasten our mindless, exciting but incredibly damaging descent further into the maelstrom of Italian style politics that we have been embracing with such abandon or even fervour since we sacrificed Howard for daring to deliver such boring prosperity, we now have our fifth and possibly least likely prime minister in four years and can ‘look forward’ to having at least one more inside the next 12 months.

So what effect will this latest, greatest, most embarrassing political own goal have on property prices?

Probably more or less than people think, depending on how they think… why… and the type of property. 

Some realities, probabilities, and possibilities…

Scott Morrison as our latest and perhaps most accidental and unlikely prime minister may be as surprised as most others anywhere on the planet to know that he is once he gets over the shock of realisation (a la Julia Gillard previously) will hit the ground running (fast) to try and limit the bloodletting at the next election which he will have to do without Julie Bishop as deputy PM (as he would have had to have promised that role to someone else to get the nod) which Labor will be pretty happy with but the broader population not and without Peter Dutton as the effective attack dog that he is (where he is second only to Tony Abbott).

Expect therefore a flurry of policy on the run and amid that haste a swag of missteps.

Having a direct negative impact on property prices broadly is the early likelihood that in trying to win over voters recently lost to one nation he will introduce even tougher measures to further disincentives foreign investors to not just remove what very little incentive there remains today for them to consider buyer property here to where it is blatantly very unattractive.

What would be a clear net sum game for him politically would of course come at the cost of a fresh wave of panic washing through an investment apartment market already on its knees (at least for this cycle). 

Positively true to political form he may well also overreach in the other direction to be seen to compensate for this but particularly to buy some support among younger voters (he currently doesn’t have) through the introduction of some bold new unilateral financial incentive for first home buyers.

This would of course come well short of offsetting the economic cost of exorcising the last of the overseas investors from our market (and this not just temporarily, the Chinese have long memories) but politically it would work (only short term but that is all that matters in today’s politics where they worry about tomorrow tomorrow). 

Greatly incentivising the lower end of the housing market nationwide as this or a similar act would (not that we need that here right now, our lower end is buoyant enough) would also in turn positively influence work its way upmarket. 

Looking into next year and the current high likelihood that Bill Shorten will have his turn however brief with the baton (assuming he says or does little between now and then), whilst his ascendancy will broadly be counterproductive for residential property prices (particularly in the southern states), don’t take it as read that his promised, controversial wholesale deconstruction of negative gearing (removing it from 95% of all property and restricting it to new builds and even then once only) will be delivered. 

By then his party will have all of the ammunition in the world (including the consequential spectre of another ‘recession we [never] had to have’) and the ‘support’ of trade union bosses, the construction industry being responsible for 1 in 4 Australian jobs, to defer (read abandon) the much maligned but politically popular core policy platform.

Regardless of what happens short to medium term, we in South-East Queensland can rest assured that the great northern migration that is gathering as it always does once the southern capitals have had their day in the sun and those who have ridden the price wave understandably line up to take advantage of the resultant glaring price disparity between our and their house prices and make the sun exposure more permanent.

Regardless of whatever transpires short to medium term politically (Scott who they are saying all around the world) we can also look forward to even or ever lower interest rates that will come with an increasing political appetite for the lower rates to be passed on.

As our benchmark interest rate falls further which it almost must even without all of the current political uncertainty given our 2 year bank bill swap rate today is almost the same as the 90 day equivalent meaning the former only has to move fractionally downwards and we are on a recession footing, and with our 10 year only 70 basis points higher which should be even more concerning, calls for the government to finally lift the guarantees it placed ‘temporarily’ on bank deposits at the height of the GFC to force banks to be truly competitive would see them pass them on or perish would become so loud the government (or opposition) would no longer be able to ignore them.

By overseas example, at our current benchmark rate of 1.5% we should be able to borrow from the banks at less than 2% (2% being a very solid 25% return for the bank over and above the cost of money). 

That banks are able to get away with selling money to us at between 150% and 250% or more above this benchmark or interbank lending rate rate because other banks can’t compete because they don’t have the same governmental guarantees as the Big 4 is of course unconscionable (and don’t be fooled by their talk about the real costs of funding being higher – that is just a clever smoke screen). Removing the guarantee would very quickly 

Isn’t it staggering how simple it could be to solve this and so many of the country’s other economic ills but given democracy how almost impossible.

To be back on the economic easy street all we need to is remove the outdated government guarantees for the Big 4 banks, broaden the current 10% GST, and have all businesses great and small keep and have available for impromptu inspection simple transparent electronic records of all transactions.

As simple and as incredibly effective as these three should be, competing political imperatives make them next to impossible.

We would certainly have some fun with the last one.. I can’t remember the last time I didn’t have to almost insist on a receipt when buying fuel or paying for a meal at a restaurant.

But I digress. We probably can’t change greatly what goes on in Canberra or elsewhere in the world but what we can change is how we take it, how we respond. We can put our head in our hands or we can put our heads up and think ‘where is the opportunity in this’. There is always opportunity in change or adversity and this time (and next time) around it will be no different.