Killing negative gearing won’t kill demand: NAB
Restrictions on negative gearing would be unlikely to dampen housing demand, according to a NAB executive.
Negative gearing has become a hot topic of debate for the looming Federal election on 2 July. The Labor Party has proposed restricting the tax concession to newly-constructed housing, while the government has claimed such a move would hurt investor demand and cause housing prices to fall while rents skyrocket. But NAB group executive of personal banking Gavin Slater has claimed the removal of negative gearing would be unlikely to cause any short-term damage to the housing market.
“I don’t want to get into the policy debate, but in the short term, any material impact on the housing market, we’re not predicting that,” Slater told AAP.
Slater said, however, he was uncertain how the housing market would react in the long term if negative gearing was scrapped.
Slater said investment demand had already weathered lending restrictions prompted by the Australian Prudential Regulation Authority (APRA).
“Demand for investment properties is still very strong both across apartments and residential lending. That has stayed pretty constant,” he said.
With rates remaining low, Slater said investment properties were still attractive.
“There’s still reasonable yields being generated from the rental market to cover the obligation,” he said.