Negative gearing claims labelled a “scare campaign”
A survey claims nearly 80% of investors would abandon the market under negative gearing changes, but one commentator has rubbished the claims.
A survey claims nearly 80% of investors would abandon the market under negative gearing changes, but one commentator has rubbished the claims.A real estate group’s survey has claimed 79% of property investors would pull out of the market if changes to negative gearing were introduced.
According to The Australian Financial Review, the Real Estate Institute of Queensland’s survey of more than 14,000 of its members indicated 79% would pull out of property investment if Labor’s negative gearing changes were enacted.
“That will have a crippling effect on house values and on the rental market, where the private rental market plays such a critical role in keeping rents affordable,” REIQ chairman Rob Honeycombe told the AFR.
Honeycomb said this would represent a loss of around $130 billion in value.
But Macrobusiness’ Leith van Onselen has rubbished the claims, calling them a “scare campaign” and saying the group had “abandoned common sense”.
“First, why would housing investors rush for the exits when Labor’s negative gearing policy grandfathers negative gearing for existing investors and would only affect new investors in existing dwellings from 1 July 2017? Surely the vast majority of investors would remain in the housing market and retain their negative gearing benefits, especially if rents were to also rise, as argued by the REIQ, which would make their investments even more profitable?” van Onselen wrote.
Van Onselen said the $130 billion figure quoted by Honeycombe represented a price fall of only 2.2%. He argued that Labor’s policy would channel negative gearing toward new building, bringing new housing supply onto the market rather than diminishing supply.
“And this extra supply would lower rents, other things equal,” van Onselen said.
The stoush is the latest in a number of public debates over negative gearing in the wake of the government’s pledge it would not change the concession in its upcoming budget.
