If you want a good laugh, check out this video from the guys at The Property WOD (Workout of the Day).
There’s lots of funny bits, but this one is my favourite:
Guy 1: “Negative gearing in Australia enables everyday Joe Blow’s to provide housing for less fortunate people”…
Guy 2: “Well that’s correct. Investors really are the super heroes of Australia providing affordable housing to everyone… But our politicians are pretty short-sighted over here. They are talking about removal of negative gearing”.
Guy 1: “But who will provide housing for the people that can’t afford their own housing?”
Guy 2: “Well it won’t be investors like me… I would stop buying investment properties for a period of 12 months until my tenancies come up. Then I would jack my rentals through the roof… because there would be not enough investment properties on the market to support everyone, until which point it became affordable to have housing again to buy investment properties…”
The most astonishing thing is that they are serious.
Here’s a some quick questions for our property heroes.
First, given that over 90% of investment loans are for established dwellings (see next chart), how are property investors improving rental availability and affordability, given buying an established home simply turns a home for sale into a home for let?
Second, if negative gearing was abolished, and some investors sold-up and left the market, how would this affect rental availability and affordability, given that rental homes would simply be turned back into owner-occupied homes, leaving the rental demand-supply equation unchanged?
