Murray calls on government to consider changes to negative gearing
The former head of Australia’s financial system inquiry has argued that changes to negative gearing should be considered as a means to address housing affordability.
Inquiry head and former Commonwealth Bank CEO David Murray has told Fairfax that tax concessions for property investors should be scrutinised as a way of putting the brakes on a booming property market.
The comments come after CoreLogic figures for March revealed yesterday that capital city house prices grew at their fastest annual pace since May 2010. The figures also showed that Sydney prices grew at their fastest pace since November 2002.
“There has to be a look across the system at what fuels demand to see whether it’s sensible to change [tax settings], remembering that many of the things have unintended consequences in other parts of the economy,” Murray told Fairfax.
Murray said that current tax concessions make housing a more attractive investment class than other assets.
“Once momentum in these asset markets builds and investors start to believe there’s no possibility of a loss, it’s this spiralling of prices that needs to be addressed,” he told Fairfax.
Murray also said that moves by regulators to tighten investor lending were positive.
“From a stability perspective I think [house prices in Sydney and Melbourne] are potentially unhealthy, and so I support the further action that APRA has taken,” he said.