Negative gearing has re-emerged as a potential federal election issue after Prime Minister Anthony Albanese’s remarks on Wednesday.
Although the prime minister clarified the following day that changes to negative gearing were “not our policy,” he did not fully rule out future adjustments to this contentious policy.
REIWA CEO Cath Hart (pictured above) expressed strong opposition to any proposed changes to negative gearing, warning of negative repercussions on housing supply and investor confidence.
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“Changes to negative gearing would not add to housing supply and would in fact deter investment and adversely impact WA’s already-challenging rental market,” Hart said.
She said that around 85% of WA’s rental properties are owned by private investors, many of whom are middle-income earners with just one investment property.
REIWA cautioned that even the hint of changes to negative gearing could alarm investors, potentially leading them to sell, especially given the current favorable selling conditions.
Hart noted that WA’s rental market is still recovering from the impacts of COVID rental moratoriums, which led to a significant drop in available rental properties and record-low vacancy rates.
REIWA’s stance aligns with the Real Estate Institute of Australia (REIA), whose president, Leanne Pilkington, warned against undermining negative gearing.
“Disincentivising investment will exacerbate an already strained market and create a massive exodus of current investors if brought in,” Pilkington said.
She said that removing negative gearing would shrink the supply of rental properties, pushing rents up and making it harder for renters to find homes.
Pilkington said that with nearly 38% of residential property finance coming from investment loans, policy measures are urgently needed to support investment and improve housing affordability.
REIA and REIWA continue to advocate for policies that ensure a balanced rental market, warning that discouraging private investment could have severe consequences for both investors and renters alike.
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