Two-thirds of investors to snub property under Labor

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More than 70% of investors would shy away from purchasing a second-hand property if they could no longer claim negative gearing benefits, according to a new survey conducted by Washington Brown Quantity Surveyors.

The Labor Party has proposed a limit to negative gearing on second-hand homes, allowing deductions only on newly-built properties, so investors will be encouraged to direct their funds to those properties to boost supply.

“With the clear majority of respondents having second thoughts about purchasing a second-hand property if this proposed policy is implemented, any government should be considering the wider implications for both the property markets around Australia and the effect on the broader economy,” said Tyron Hyde of Washington Brown Quantity Surveyors.

The result appears to support the widespread feeling that there is almost no need to change the country’s negative gearing policy. Of the nearly 3,000 people surveyed, less than 20% thought that changes to the policy were essential.

“With such a significant number of people responding, it’s pretty clear that the overwhelming majority feel that now is not the time to make wholesale changes to negative gearing,” said Hyde.

Notably, the research showed that many respondents were away of potential changes, with over 60% of those surveyed confirming they knew that property investors would no longer be able to claim expenses such as strata fees, property management fees, or repairs and maintenance on established properties, should the Labor Party abolish negative gearing.

More than 80% of Aussies also know that proposed negative gearing legislation changes would mean that income losses from newly acquired, second-hand rental properties would no longer be able to be offset against employment income.

Eighty percent of survey respondents also said that the negative gearing policy of either party will be a deciding factor in how they vote in the upcoming federal election.

“Whilst the responses here do not indicate which way the respondents will vote, they certainly suggest this policy will factor into voters’ decision-making. This is a hot and somewhat sensitive topic! It’s clear from these results that negative gearing will definitely be an influencing factor at the ballot box,” Hyde said.

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  • Ben says on 03/04/2019 03:50:54 PM

    The title of the article does not match the content. The content indicates that 2/3rds of investors will ditch 2nd hand property and shift to new property, whereas the title infers they will ditch all property investment. Ditching 2nd hand property investment is good news from a property developers point of view because not only will they have more investors for new developments of all categories, but the old properties that they wish to buy and develop will be cheaper. It is also good news for people buying with the intent of occupation, because with lower old house prices, they will be encouraged to buy closer into cities. Isn't this the intent of the policy and what we need to increase property ownership across a broader cross section of the community? However I think that the underlying demand for homes, both old and new, will keep prices going up in the long term so the effect of removing negative gearing on old homes will be temporary- supply and demand will adjust and create a new equilibrium.

  • Pauline O’Hehir says on 03/04/2019 08:28:09 PM

    I agree, it will be a terrific change that provides something and opportunity for all levels of society. Seems madness that so many are bankrolling their children to actually afford a home because of cost and no tax offsets, and a lot of the same parents also have negative gearing tax offsets. At least for fairness own home mortgage payments should receive tax offsets. Whole market is out of sync and preventing a broad cross section of population demographics to live in serviced inner and outer areas as they prefer.
    Regional cities are now being priced out of reach because agents gleefully report 40 to 45 percent are interstate or major city investors. Where is the fairness. How about asking people other than lobbyists about their thoughts.
    Fairness and equality of access to own a home is needed in our increasingly selfish country.

  • Arthuro says on 04/04/2019 03:37:31 PM

    Reads like an article written by a pro developer anti labour individual. Anyone with a basic level of economic understanding knows that negative gearing as it stands actually holds back economic growth long term, and concentrates wealth. Great for the boomers not so their kids.

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