Labor’s plan won’t achieve stated goals

February 15th,2016

Yesterday’s announcement by the Opposition that it intends to limit negative gearing to newly constructed investment properties will not achieve the claimed objectives of improving both the supply of housing and housing affordability according to the Real Estate Institute of Australia (REIA).

“The policy is built on the popular perception of the declining amount of investor loans committed to new housing construction relative to the total value of housing finance for established properties”, said Mr Neville Sanders, President of the REIA.

“Independent research commissioned by the REIA shows that around 27 per cent of all loans for the construction of new housing in 2014 were to investors and that this proportion has remained relatively constant over the last 30 years (refer to the graph below). The absolute amount of investor loans committed to the construction of new housing has increased by more than seven-fold since 1986”.