Killing negative gearing won’t kill demand: NAB

Posted: 18 May 2016 9:40 am
house keys

house keysRestrictions 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.

Working out the real benefits of negative gearing

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.

Find the right home loan now

Ask an Expert

You are about to post a question on

  • Do not enter personal information (eg. surname, phone number, bank details) as your question will be made public
  • is a financial comparison and information service, not a bank or product provider
  • We cannot provide you with personal advice or recommendations
  • Your answer might already be waiting – check previous questions below to see if yours has already been asked

Finder only provides general advice and factual information, so consider your own circumstances, or seek advice before you decide to act on our content. By submitting a question, you're accepting our Terms of Use, Disclaimer & Privacy Policy and Privacy & Cookies Policy.
Go to site