The Coalition’s incessant claim that Labor’s negative gearing policy would reduce rental supply and force-up rents has been demolished once again, with one Sydney developer claiming that Labor’s policy would be a “shot in the arm” of the off-the-plan market. From The AFR:
Mark Bainey, chief executive of Capio Property Group, said he supported the divisive plan Labor is taking to the next federal election as it would benefit a lacklustre developer market…
“This reform is exactly what the market needs … it’s a shot in the arm for what is a depleted off-the-plan market,” said Mr Bainey,..
This follows Stockland chief executive, Mark Steinert, who last year admitted that Labor’s policy is likely to boost new supply:
The Labor Party’s plan to limit negative gearing tax breaks to new housing would put a rocket under the business of residential developers because demand from investors would surge, Stockland chief executive Mark Steinert says…
“Our business will rip,” he said at the Property Council of Australia’s annual congress in Darwin.
Of course, this is precisely the stated objective of Labor’s policy: to put taxpayer subsidies to work to boost supply and lower both prices and rents.
Moreover, the stated policy objective of Labor’s policy is exactly the same as that used by the Coalition to support its policy of restricting foreign investment to newly constructed dwellings. This too was aimed precisely at boosting dwelling supply, economic activity and jobs, as explained by the chair of the foreign investment inquiry, Liberal MP Kelly O’Dwyer:
“Currently the framework seeks to channel foreign investment in residential real estate into new dwellings in order to increase the housing stock for Australians to build, buy or rent. Foreign investment is encouraged in new dwellings whether they be apartments, units or homes because in addition to creating more supply, it also creates more jobs for the building and construction sector – all of which helps to grow our economy”.
So, how can the Coalition credibly support restricting foreign buyers to new builds because it boosts rental supply, jobs and growth, but not negative gearing? The Coalition’s position is utterly contradictory.