Negative Gearing back in the spotlight

For a long time, Australia’s housing affordability concerns have centred around negative gearing, but increasingly, the argument is heading in a different direction.

With the Negative Gearing debate reigniting in January, many industry commentators continued to defend the tax concession and they offered some new perspective. Here’s what some had to say. 

Consulting Firm, EY believe the issue is one of housing accessibility rather than affordability with new data estimating there are around 600,000 vacant bedrooms in Sydney alone. 

An international comparison conducted by the Australian Housing and Urban Research Institute shows negative gearing alone doesn't make housing unaffordable. The research cites countries such as Germany, which offers similar tax breaks on home ownership and don't suffer the high price rises that keep many out of the market in Australia.

Belle Property’s CEO, Peter Hanscomb broadly agrees with this sentiment, saying housing affordability is a complex issue. “There is no single factor that will solve the problem of housing affordability, and to suggest that eliminating negative gearing is some kind of miracle solution is simply wrong. In fact, the adverse effects would far outweigh the positives if negative gearing were to be removed and I think history alone teaches us that.”  

The history that Peter refers to is the Federal Government’s attempt to abolish Negative Gearing in the 1980s, only to reinstate it a short time later due to its detrimental effect to the economy.