Labor’s negative gearing policy is likely to hit mum and dad investors, home owners, renters and the wider economy, according to a new report released by the Real Estate Institute of Australia (REIA).
While REIA welcomes the SQM Labor research report as a "valuable component of carrying on an informed debate", it has also highlighted several causes for concern.
REIA president Adrian Kelly explained, “The analysis in the report provides evidence of the impacts of the policy, identifies the losers and the extent of their losses.
“The losers are mum and dad investors, home owners, renters, the construction industry, state governments and the economy.”
Kelly said that rent is expected to increase between eight and 15% across the capital cities from 2020 to 2022.
Predicted exceptions are Brisbane, which could face up to a 22% increase, and Darwin, which may remain relatively unscathed with an increase of around 4%.
“This is in contrast to the current situation where we have the lowest annual increase in rents for two decades,” explained Kelly.
The SQM research also forecasted a fall in housing construction activity in what will amount to a 25 to 30% decline from 2019 levels, which would have significant ramifications for employment and GDP.
According to Kelly, the property sales turnover falling by the predicted 12 to 15% will result in a drop in state stamp duty revenue of approximately $2.3bn – money which could be spent on schools, hospitals and roads, he pointed out.
“There are no winners. Even first home buyers will face a faltering economy with lower employment prospects,” the REIA president concluded.
