The Newspoll results on the Federal Opposition’s proposed changes to negative gearing for property underscores the need for more details about their impact on the Australian economy and households.
According to Newspoll, 32 per cent of Australians think the policy change will lead to a substantial fall in housing prices, while 42 per cent think prices will come down ‘a little’. 36 per cent of respondents thought renting would become more expensive, while only 33 per cent thought housing would be more affordable for first home buyers.
Australia’s housing sector is worth $6.8 trillion. For most Australians, property is their single biggest financial asset.
“This policy proposal could impact on housing markets and the financial well-being of millions of Australians,” said Ken Morrison, Chief Executive of the Property Council of Australia.
“Property investors are not rich ‘property barons’. The overwhelming majority of property investors are everyday Australians on modest incomes.
“71 per cent own just one investment property, and a further 19 per cent have just two properties,” Mr Morrison said.
“Property investors play an essential role in providing housing choice for Australians, and the Opposition’s planned changes to negative gearing and capital gains tax raise several questions for which there are currently few satisfactory 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?,” Mr 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?
“These are critically important questions for investors, people who rent and the whole Australian economy,” Mr Morrison said.
Source: Property Council of Australia