Lol:
Finance Minister Mathias Cormann has ridiculed modelling backing Labor’s policy of restricting negative gearing to new properties from July next year and abolishing John Howard’s capital gains tax discount.
The modelling – prepared by the union-backed McKell Institute think-tank and splashed across Fairfax newspapers today – predicts the policy would slow short-term house price growth to 2.6 per cent per year rather than 3.1 per cent under current settings.
“I don’t think you can rely on a Labor think-tank giving themselves a pat on the back about their own policy,” Senator Cormann told Sky News.
“The truth is Labor’s ill-thought-out negative gearing policy, so-called, will drive down the value of established properties. It will push up the costs of rents. It will be bad for families across Australia trying to get ahead.”
Senator Cormann said the Real Estate Institute, the lobby group for property agents, believed rents across Australia would rise by up to 10 per cent under Labor’s policy.
“It would put a large amount of families around Australia into rental stress, which is not what we need right now,” he said.
You idiot.
I suggest you trust neither and rely upon reason:
- less demand means house prices will rise less than they would have but there will be no rush for the exits given grandfathering;
- given the circumstances in mid-2017 are likely to be inclement, house prices will fall some on the policy change;
- but that will help rebalance the economy to tradables as interest rates and the dollar also fall and, along with a rise in construction versus baseline, the economy will be OK;
- rents will fall not rise as renters become owners and more supply rises on still negatively geared new property.
