Bell rings gearing fears
Real estate king, Ciobo pan Federal Labor’s plan
RENTS could rise to “exorbitant” levels if Labor implements its plan to limit negative gearing for new properties, a leading Gold Coast property figure says.
Labor, if it wins the federal election next year, plans to limit tax breaks to new housing investment and halve the capital gains tax deduction available on investment asset sales.
The negative gearing policy would only apply to second- hand property purchases, and would not be retrospective, meaning people who currently use negative gearing would not be affected.
Andrew Bell, who heads up Ray White Surfers Paradise Group, the city’s largest real estate agency, said former prime minister Bob Hawke’s stop to negative gearing in the 1980s had a severe effect on the rental market.
“I’d be one of the few people who were around the last time Labor did this in the 1980s, and it proved to be a disaster then,” Mr Bell said. “Largely because the knock-on effect was it stopped investors buying investment properties, which resulted in a dramatic reduction in the rental pool which caused rents to go up exorbitantly and caused all sorts of pressure for people who could not find rental properties.”
Mr Bell said many visitors bought units and houses on the Gold Coast as a holiday property to rent out for part of the year when they were away.
“Those people, who would have needed negative gearing to make that proposition work, will not buy investment properties which will take a lot out of the rental pool.”
Rental rises will not be relished by city tenants. The vacancy rate earlier this year stood at just 1.1 per cent and median weekly rental rates are $499.
Moncrieff MP Steven Ciobo slammed Labor’s plan, claiming it would punish those who used negative gearing and anyone with equity in their home.
“The Gold Coast construction industry is a major local employer and Labor’s policy puts these jobs at risk,” he said.
“Many of the high-rises that are built and maintained on the Coast are purchased by investors. Labor is taking a sledgehammer to these people.”
Mr Ciobo said people who used negative gearing were not rich but ordinary workers such as teachers, police and emergency services workers.
“Now is the worst possible time for Labor to push its property tax,” Mr Ciobo said. “Australia’s housing market has been cooling for 12 consecutive months in our capital cities. A growing number of experts have also been warning Labor’s policies will have a significant negative impact on the economy and the property market.