Jennifer Burke

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Vicki Walker

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Justin Tullipan

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January – A Brand New Year

Welcome back to a brand new year. With Australia’s property affordability at an all-time low in many markets around the country, a number of property business leaders have urged state and federal governments to push ahead with tax reform to help fix the worsening problem. This comes after the Coalition ruled out changing the negative gearing system, which was touted as a potential solution.

Flying in the face of many of his federal colleagues, NSW Planning Minister Rob Stokes believes that a negative gearing policy amendment should be considered. Negative gearing became a hot topic during the 2016 election and Mr Stokes’ call to review the tax break puts the issue back on the national agenda.

While most major capital city property markets remain buoyant, most notably Sydney and Melbourne, many regional areas have struggled over the past few months and mining-reliant cities’ housing prices have been volatile. Australian metropolitan house prices rose by 0.5 per cent during October, which took the gains over 2016 to 7.5 per cent.

In contrast, Macquarie Group’s former property chief Bill Moss said the federal government would have to look long and hard at longer-term implications if negative gearing were to be abolished. He questioned that while the apartment boom had increased supply, what happens in two, three or five years when there is a real shortage of supply. Will the government come in and fund affordable housing?” Taxes might have to be increased if the tax break was abandoned, while rents would go up, he noted. “When more than 50 per cent of voters no longer own real estate, that’s the day when taxes (for housing) will change,” Mr Moss said.

Brisbane-based investor and former chairman of the Queensland Government and Brisbane City Council’s affordable housing venture Brisbane Housing Company, Kevin Seymour, said the affordability issue was becoming increasingly urgent. He believes there is no definitive answer to the negative gearing question, saying both leaving the tax break in place and removing it would have ramifications.

In New Zealand property news, first home buyers appear to be returning to the housing market in force, according to the latest Lending by Borrower Type figures from the Reserve Bank. This is welcome news after it was recently reported that rapidly rising prices in Auckland and now many other regions was starting to push home ownership increasingly out of reach for many, based on’s Home Loan Affordability Reports for November.

While scraping together a deposit is still a big hurdle for first home buyers, the Reserve Bank figures show that in November first home buyers borrowed $897m, making up 14.1% of the $6.349b advanced by lenders during the month. This is easily the biggest monthly tally borrowed by first time buyers since the RBNZ began reporting these figures in August 2014. In fact, first home buyers appear to be picking up the slack in the market being left by investors after the introduction of the RBNZ’s new 40% deposit rule for investors in October.





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