Following the recent Newspoll results that showed the need for more details about the policy proposal’s impact on the Australian economy and households, the Property Council of Australia queried how the proposed changes to negative gearing can weigh on property investors.
Newspoll results revealed that 32% of Australians believe the policy change will cause a significant decline in housing prices, while 42% think prices track lower ‘a little’. Another 36% expect renting to become pricier, while only 33% thought housing would be more affordable for first home buyers.
According to available data, Australia’s housing sector is worth $6.8 trillion, and for most Australians, property is their single biggest financial asset.
Taking off from this thought, Property Council of Australia Chief Executive Ken Morrison said that Labor’s negative gearing policy proposal could affect housing markets and the financial well-being of millions of Australians.
“Property investors are not rich ‘property barons’. The overwhelming majority of property investors are everyday Australians on modest incomes.
“71% own just one investment property, and a further 19% have just two properties,” he said.
He then refocused people’s attention on the several questions about opposition’s planned changes to negative gearing and capital gains tax. These are supposed substantial inquiries that need further answers.
“What is the forecast medium to long-term impact of these changes on property investors? With housing prices already falling and construction levels slowing, what are the consequences of making such a fundamental policy change at this stage of the cycle? What about the impact on the one-third of Australian households who rent?” Morrison asked.
“These households rely on a property investor to provide their home. What happens if there are fewer investors in property and less supply for the rental market?”
Morrison reiterated that providing clarifications for these questions is important to investors, renters, and the rest of the Australians so they can be properly guided.
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