Powered by MOMENTUM MEDIA
realestatebusiness logo

Subscribe to our newsletter

Scrapping negative gearing would cause rent hikes

One of Australia’s leading accounting and wealth advisory groups has argued that abolishing negative gearing would cause rent prices to rise significantly.

Chan & Naylor managing director Ken Raiss said the likely outcome of scrapping the mechanism would be market consolidation and rental increases of 50 per cent or more over time.

“Currently, the Australian rental market is controlled by 'mum and dad' investors, not commercial landlords, and as a result the Australian domestic housing market remains akin to a ‘public co-operative utility’, with rental properties available at varying levels of affordability,” he said.

“Like any public utility, as soon as they enter private and more entrepreneurial hands, then prices will go up, and in the case of public housing, this could lead to a rental price hike of as much as 50 per cent over time, resulting in the government having to shoulder the weight of providing a much larger percentage of housing for tenants and social dislocation for those unable to receive government housing.”

Mr Raiss said residential property must be treated as a business, and that any business has the right to recoup appropriate expenses.

Advertisement
Advertisement

“Small business owners wouldn’t invest in a new start-up business if they couldn’t claim their losses, so there is no reason why property investment should be any different,” he said.

Mr Raiss added that while property investors can claim their upfront costs, making a profit must be their ultimate goal.

Scrapping negative gearing would cause rent hikes
mortgagebusiness

Latest News

Discover some of the top news stories impacting the mortgages space in this weekly wrap-up. ...

The central bank should have raised the official cash rate earlier than May given rising inflation, according to economist Stephen Koukoul...

In the face of ever-increasing competition from fintechs in the buy now, pay later space, NAB has nabbed its share by launching its first BN...

VIEW ALL

Join Australia's most informed brokers

Do you know which lenders are providing brokers and their customers with the best service?

Use this monthly data to make informed decisions about which lenders to use. Simply contribute to the survey and we'll send you the results directly to your inbox - completely free!

What is the maximum proportion of income borrowers should use to service a mortgage?

Website Notifications

Get notifications in real-time for staying up to date with content that matters to you.