The new <a href="https://www.apartments.com.au/new-apartments/yarraville-green-42-stephen-street-yarraville-vic-3013">Yarraville Green</a> development in Melbourne's inner west is showing that landscaping can be just as influential as architecture, with buyers responding strongly to the garden-first approach adopted from the outset by developer Excelon Projects and the project's design team.

Excelon appointed Six Degrees Architects and landscape architects SBLA to work collaboratively on the development, with a brief to create "a sustainable, design-led building with a focus on community."

That approach has resonated with buyers. According to Next Chapter Director Tom Hirini, who is leading the sales campaign, the landscaped communal garden has become one of the project's defining features, alongside its boutique scale and European-inspired cluster housing concept.

Local downsizers, right-sizers and established families already living in Yarraville and surrounding suburbs have accounted for the majority of purchasers.

[smartcode_project:default project_id=144913 project_image_fid=297740]

Yarraville Green will comprise 53 homes, including apartments and townhomes, arranged around the shared central garden to maximise connections to the landscaped open space. Parking has been moved underground, allowing the ground plane to be dedicated to greenery, pedestrian movement and communal spaces.

The landscape extends well beyond passive planting. Productive garden beds, a pergola, communal gathering spaces, garden sheds and a pet wash have all been integrated into the masterplan, creating spaces designed to encourage everyday interaction between residents.

[smartcode_project:default project_id=144913 project_image_fid=297741]

The interiors continue Excelon's focus on craftsmanship, incorporating bespoke elements by Melbourne artisans including leadlight detailing by Adadaz, hand-turned timber hardware by Auburn Woodturning and blown-glass lighting by Ruth Allen.

Sustainability has also been embedded throughout the project, with Yarraville Green targeting an average 7-star NatHERS energy rating through passive design principles, rooftop solar servicing common areas and rainwater harvesting for landscape irrigation.

[smartcode_project:default project_id=144913 project_image_fid=297735]

Construction continues to progress at Yarraville Green, with structural works well underway and framing works approaching completion under builder Balmain &amp; Co. The project remains on track for completion in mid-2027.

Apartments at Yarraville Green are currently priced from $625,000, while townhomes start from $1.4 million.

[smartcode_project_cta:default project_id=144913]

Joel Robinson

Garden-led design drives buyer demand at Yarraville Green

National diversified developer Fortis has officially launched Crest &amp; Walker, its latest Brisbane apartment development, with construction now underway on the 20-storey Newstead project.

Award-winning builder BINAH has commenced construction on the Bureau^Proberts-designed building, which will deliver a limited collection of 65 two and three-bedroom apartments on Kyabra Street.

[smartcode_project:default project_id=145922 project_image_fid=373556]

The project marks Fortis' fourth active residential development in Brisbane, following River House, which is nearing completion, alongside projects in New Farm and Hamilton as the national developer continues to expand its South East Queensland pipeline.

Fortis General Manager – Development Queensland Dan Boman said Crest &amp; Walker reflects the developer's long-term commitment to delivering design-led residential projects in Brisbane's established inner-city suburbs.

"We're proud to be strengthening our presence in Brisbane with Crest &amp; Walker, particularly in such a sought-after lifestyle destination as Newstead," Boman said.

"Every Fortis project is shaped by its context, and we approach each one with the respect and care it deserves.

"Our focus is always on creating places that feel connected to their neighbourhood and elevate the everyday experience for residents. Newstead continues to evolve as one of Brisbane's most sought-after urban communities, and Crest &amp; Walker reflects our ambition to contribute meaningfully to that story."

[smartcode_project:default project_id=145922 project_image_fid=373559]

Positioned between Gasworks Plaza and James Street, <a href="https://www.apartments.com.au/new-apartments/crest-walker-newstead-12-kyabra-street-newstead-qld-4006">Crest &amp; Walker</a> has been designed as a boutique residential address offering privacy and generous living spaces within one of Brisbane's most established lifestyle precincts.

The building features a contemporary brick podium softened by integrated landscaping, while the upper levels are characterised by restrained architecture and enduring materiality. Interiors have been designed to maximise natural light, acoustic performance and long-term liveability.

[smartcode_project:default project_id=145922 project_image_fid=373583]

Residences comprise spacious two and three-bedroom floorplans, with two-bedroom apartments priced from $1.55 million and three-bedroom, half-floor residences from $3.95 million.

Residents will have access to a wellness-focused rooftop featuring a swimming pool, sauna, steam room, landscaped dining spaces and outdoor lounge areas overlooking Newstead and the Brisbane CBD.

[smartcode_project:default project_id=145922 project_image_fid=373571]

Sales are being managed by Slaite Projects, with Fortis expecting strong demand from owner-occupiers seeking a high-quality, design-focused apartment in one of Brisbane's most tightly held inner-city suburbs.

Completion of Crest &amp; Walker is slated for late 2028.

[smartcode_project_cta:default project_id=145922]

Fortis expands Brisbane pipeline with launch of Crest & Walker in Newstead

The enormity of delivering a true skyscraper in Australia's new development market is often overlooked.

It has taken the best part of a decade since plans for Chevron One were first unveiled, but the 41-storey tower is now complete, with residents collecting their keys and moving into what has become one of the Gold Coast's most recognisable new landmarks.

Rising 127 metres above Chevron Island, Chevron One stands almost twice as high as any other building on the island. Its scale places it alongside the trio of towers at Jewel, arguably the last truly significant addition to the central Gold Coast skyline when they were completed around six years ago.

While there are several developments underway around a similar height to Chevron One, they are more concentrated within clusters of the highest towers in the city. The fact Chevron One sits within a developing precinct, looking back at the other high-rise developments in Surfers Paradise and Broadbeach, makes it a different proposition altogether. It will certainly become a reference point on the Gold Coast skyline.

[smartcode_project:default project_id=6515 project_image_fid=68833]

Developer Bensons Property Group is behind the 41-storey tower, which has 229 apartments, along with an exhaustive list of resident amenity spread across what is the largest development site ever assembled on Chevron Island.

The tower has been the talk of the town for years, says Ray White Projects Gold Coast agent Caitlin Rosenboom, who is selling the remaining apartments.

"People have been watching Chevron One go up for years," Rosenboom says, adding that many prospective buyers have been surprised by the scale of the views once they step inside.

"It's only when they walk through a completed apartment that they truly understand the position of the building," Rosenboom says.

"The views are jaw-dropping. Whether you're looking east over the ocean, across Surfers Paradise, along the river systems or out to the hinterland, every level offers something different but equally impressive."

[smartcode_project:default project_id=6515 project_image_fid=360215]

One of Chevron One's defining advantages is its location on the eastern side of Chevron Island on Stanhill Drive, a position which protects the views forever.

"There's only one row of houses between Chevron One and the water, and the height restrictions along the river means views from Chevron One can never be built out,"&nbsp;Rosenboom says.

While new apartment developments continue to emerge across the Gold Coast, Rosenboom says opportunities to secure a completed apartment with this level of outlook are becoming increasingly rare.

"The size of the site is something that would be incredibly difficult to replicate today," she says.

"That's allowed Chevron One to deliver the sort of amenity, open space and resident facilities that very few projects can offer. There are not many completed apartment buildings on the Gold Coast right now that can compete with the combination of scale, quality and amenity."

[smartcode_project:default project_id=6515 project_image_fid=68839]

There's around 2,000 sqm of amenity solely for the use of residents of Chevron One. Club One features a uniquely shaped swimming pool that mirrors the footprint of the building itself, set within a extensively landscaped gardens. There's also an indoor pool and spa, a fully equipped gym with a Pilates room, a yoga garden, a bookable private dining area and lounge that can host up to 30 people, and a 24-hour concierge service.

As for the buyers, Rosenboom is fielding enquiry from everywhere: Sydneysiders and Melburnians looking at the new and off-the-plan market following the changes in the Federal Budget, as well as those looking to relocate, through to South East Queenslanders seeking either a permanent home or a weekender bolthole.

"The Gold Coast lifestyle continues to resonate with people relocating from the southern states, and when they see the views and the quality of what's been delivered at Chevron One, it becomes very easy for them to understand the appeal," Rosenboom says.

A diverse mix of one, two and three-bedroom apartments remain available, with each offering "something a little different", be it the orientation and views, configuration, or level, to suit a wide variety of buyers.

The remaining apartments are ready to inspect in person, by appointment.

[smartcode_project_cta:default project_id=6515]

A decade in the making: Residents to move into Chevron One as construction wraps up

A general rule of thumb in new apartment developments is that the penthouses get the rooftop.

It's a formula that's become commonplace across Australia's apartment market. Residents might have access to a pool, gym or barbecue facilities on a dedicated lower level, but the most desirable outdoor spaces are typically reserved for the highest-priced homes at the top of the building.

<a href="https://www.apartments.com.au/developers/sherpa-property-group">Sherpa Property Group</a> has taken the opposite approach.

Rather than dedicating the rooftop to a handful of buyers, the Gold Coast developer has made it the centrepiece of its Flourish collection, creating expansive shared spaces from the best vantage point in the building.

The philosophy has reached its most ambitious expression at <a href="https://www.apartments.com.au/new-apartments/flourish-soleira-palm-beach-1150-1160-gold-coast-highway-palm-beach-qld-4221">Flourish Soleira</a> in Palm Beach, where two rooftop precincts connected by a skybridge will deliver one of the most extensive lifestyle offerings seen in a residential apartment project on the Gold Coast.

[smartcode_project:default project_id=150017 project_image_fid=374053]

"We're seeing a clear move toward developments that offer more than just an apartment," Sherpa Group founder Christie Leet said.

"People want spaces that support how they actually live, whether that's working from home, staying active, or spending time with family and friends.

"That's where amenity becomes critical. It's not just about what's included, but how those spaces are designed to be used every day."

[smartcode_project:default project_id=150017 project_image_fid=374052]

The breadth of amenity has already attracted buyers across multiple demographics. Younger first home buyers have been drawn to Soleira's one-bedroom apartments, a product rarely delivered in Palm Beach, while families have responded to practical inclusions such as the shallow children's pool adjoining the main lap pool and the extensive communal recreation areas.

Instead of a single rooftop, Soleira delivers two distinct lifestyle zones.

[smartcode_project:default project_id=150017 project_image_fid=372547]

The southern rooftop has been dedicated to wellness, featuring a gym, yoga and Pilates studio, work-from-home facilities, a wellness centre, spa, and hot and cold plunge pools.

The northern rooftop focuses on recreation and entertaining, incorporating a heated resort-style pool, private dining rooms, pizza ovens, barbecues, a golf simulator, children's recreation areas, and what is expected to be the Gold Coast's first rooftop basketball court, which will also double as a squash court.

[smartcode_project:default project_id=150017 project_image_fid=374054]

Beyond the rooftops, Soleira will introduce 1,500 sqm of curated retail beneath the towers, creating one of Palm Beach's first genuinely mixed-use lifestyle precincts where cafés, restaurants and convenience retail become part of residents' everyday lives.

Sherpa has also retained management rights across the development, allowing it to oversee the long-term operation of the building through a 24-hour concierge model. The developer is also exploring additional revenue streams within the precinct aimed at helping offset ongoing body corporate costs for residents.

[smartcode_project:default project_id=150017 project_image_fid=370962]

While Soleira is the largest project Sherpa has delivered, the rooftop-first philosophy has been evolving for several years.

It began with <a href="https://www.apartments.com.au/new-apartments/amargo-6-12-sixth-avenue-palm-beach-qld-4221">Flourish Amargo</a>, the first project released under the Flourish brand. Rather than competing at the ultra-luxury end of the market with oversized half-floor and full-floor residences, Sherpa focused on creating lifestyle-driven apartments supported by resort-style shared spaces.

Amargo introduced more than 800 sqm of rooftop amenity, combining wellness facilities, heated pools, entertaining areas, cabanas, pizza ovens and private dining spaces into what was designed as an extension of residents' homes rather than a facility used only occasionally.

[smartcode_project:default project_id=146527 project_image_fid=366550]

That approach continued with Flourish Oasis, where the same amenity-led philosophy was refined into a more boutique development. Strong demand from Sherpa's growing VIP database saw much of the project sold before it reached the broader market, reinforcing buyer appetite for apartment communities centred around shared lifestyle experiences.

Flourish Amargo is slated for completion mid-way-through next year, with Oasis to be delivered by late 2027. Flourish Soleira is expected to complete in 2030.

[smartcode_project_cta:default project_id=150017]

Sherpa takes amenity to the sky as Flourish Soleira captures booming Palm Beach demand

As apartment living continues to evolve across Sydney's growth corridors, the quality and distribution of shared spaces is increasingly shaping how residents experience home. Rather than functioning as add-ons, amenities are being embedded into the daily rhythm of a building, supporting everything from quiet retreat to social interaction, often within a single vertical community.

At <a href="https://www.apartments.com.au/new-apartments/aeris-melrose-park-nursery-street-melrose-park-nsw-2114">Aeris</a> in Melrose Park, this approach is resolved through a layered amenity offering that unfolds from ground level through to its upper podium. Developed by <a href="https://www.apartments.com.au/developers/sekisui-house-australia">Sekisui House Australia</a> in partnership with Hankyu Hanshin Properties, the project introduces 468 apartments across two towers and a mid-rise building, positioned at the highest point of the broader masterplan.

[smartcode_project:default project_id=426 project_image_fid=359199]

The amenity experience begins at street level, where two courtyards sit within a landscaped setting that connects residents to the wider network of parks and green spaces. These green spaces are not isolated pockets but part of a wider pedestrian network that links Aeris to the surrounding <a href="https://www.apartments.com.au/developments/melrose-park-nsw-2114">Melrose Park</a> precinct, including Central Park, future schools, and the Town Centre opening in July 2026. The result is a transition that moves from public to private without abrupt boundaries, allowing residents to pass through shaded, tree-lined environments before reaching the building itself.

Moving upward, the focus shifts to the level five podium, where the primary communal facilities are concentrated. This space brings together a 16-metre swimming pool, outdoor seating areas, and a communal BBQ zone arranged to take advantage of elevated outlooks. Seating is positioned beneath pergolas, creating pockets of shade that extend the usability of the space throughout the day. The pool edge aligns with views toward the wider district, reinforcing the sense of elevation that defines the project’s positioning.

In the adjacent building, this is complemented by quieter, more contemplative spaces, including an outdoor cinema set within the same level. Positioned to operate primarily in the evening, it introduces a different tempo to the shared environment, shifting from daytime activity to after-hours use without requiring separate zones.

[smartcode_project:default project_id=426 project_image_fid=360299]

The podium also accommodates an intimate private resident gym. Located on the lower levels, it gives residents convenient access to fitness facilities without leaving the building.

Above, the elevated podium sky deck extends the amenity offering, providing additional open-air spaces with elevated outlooks across the surrounding landscape. While more restrained in program, this upper level reinforces the project’s vertical progression, from ground-level greenery to elevated outlook, allowing residents to move between distinct spatial conditions within a single address.

This distribution of amenities reflects a deliberate response to how residents use space across the day. Sekisui House Australia Sales and Marketing Director Peter Kalaf points to the role these shared areas play in shaping buyer demand. Aeris has been conceived as more than a collection of apartments, with the podium pool, gym and outdoor cinema forming part of a broader lifestyle offering that extends the home beyond each individual residence.

[smartcode_project:default project_id=426 project_image_fid=360300]

What distinguishes Aeris is not the inclusion of these elements individually, but how they are arranged in relation to one another. Active, social, and passive spaces are layered vertically rather than separated, allowing residents to choose between them without leaving the building or moving far from their apartment. This proximity supports both routine use, such as a morning swim or evening workout, and more occasional gatherings, whether around the BBQ area or within the cinema setting.

The amenity design also sits within a broader framework of connectivity across Melrose Park. The Melrose Park Town Centre, anchored by Coles and Dan Murphys, features a mix of retail, dining, health and lifestyle offerings, bringing everyday convenience closer to residents. By the end of the year, more than five hectares of parks and open space, equivalent to around seven football fields of green space on residents' doorstep, will further enhance the precinct, allowing the internal facilities at Aeris to operate as an extension of the wider neighbourhood rather than a substitute for it.

Construction at Aeris continues to gather momentum, with ground floor slabs expected to be completed in late 2026 before the first sections of the buildings begin to rise above ground.

[smartcode_project_cta:default project_id=426]

Elevated amenity anchors daily life at Aeris, Melrose Park

Negative gearing

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CoreLogic RP Data undertook a thorough analysis when the Australian Tax Office (ATO) released the taxations statistics for the 2010/11 financial year. 
The statistics showed that over the year there were 1,811,174 individuals that owned a rental property. This was out of 9,416,002 individuals that have a taxable income and 12,637,623 individuals that lodged a tax return.
The data indicates that 14.3 percent of individuals that lodged a tax return owned investment properties while a greater 19.2 percent of individuals that reported a taxable income owned investment properties. This indicates that despite the fact 1,811,174 individuals own investment properties, the vast majority of Australians don’t invest in residential property.
Of the 1,811,174 individuals that reported to the ATO as having an investment property, 1,213,595 of these individuals, or two out of every three investors, were recording a loss on their rental income. The total value of these losses over the year was $13.285 billion. Obviously negative gearing of investment properties allows owners to claim a tax deduction on these costs. The average annual loss for these property investors with negatively geared properties was $10,947 or $210.50/week.
<a href="/images/2016/03/10/Individuals-rental-income-and-deductions.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/10/Individuals-rental-income-and-deductions.jpg" alt="">
There were 597,577 individuals that made a profit from their investment property in 2010/11. The total value of this income was $5.423 billion. These investors have no losses to claim a tax deduction on and would have to pay tax on their investment property; of course they would have more money in their hand each week as a result of the positive gearing. The average annual profit earned from these positively geared investment properties was $9,075 or $174.50/week.
<a href="/images/2016/03/10/Tax-summary-of-rental-properties.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/10/Tax-summary-of-rental-properties.jpg" alt="">
The data shows that on average, the losses made on investment properties that are negatively geared are larger than the profit on the positively geared propertied.  What negatively geared investors sometimes lose sight of is the fact that a loss is a loss. 
What I mean is that although the loss is tax deductible at the end of the financial year they have to carry the cost of that loss throughout the year at a sometimes significant cost.  For some it would undoubtedly be preferential to have that extra money on hand throughout the year rather than getting a larger tax return at the end of the financial year.
<a href="/images/2016/03/10/Net-rental-income-deductions-over-time.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/10/Net-rental-income-deductions-over-time.jpg" alt="">
The $13.285 billion in rental losses over the 2010/11 financial year was 24.7 percent higher than the 2009/10 financial year however, it remains -0.2 percent lower than the historic high value of losses recorded over the 2007/08 financial year. 
The number of negatively geared property investors rose by 4.8 percent over the year however, the number of investors was also below the historic high of 2007/08 by -1.8 percent.
<a href="/images/2016/03/10/Individuals-interest-in-rental-property.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/10/Individuals-interest-in-rental-property.jpg" alt="">
According to the ATO data, 72.8 percent of individuals that owned an investment property owned just one.  Meanwhile, 18.9 percent of individuals owned 2 properties while just 0.9 percent of individuals owned 6 or more.
No doubt the total value of the losses and the proportion of total investors claiming a loss on their property are quite alarming.  From an investment perspective you’d assume that it is generally preferential to make a profit than it is to carry a loss for 12 months of the year.  Where negative gearing works is when it reduces an individual’s taxable income to such an extent that there is a greater financial windfall from claiming that loss than there would be if that property made a profit. 
Of course investors using a negative gearing strategy also expect the value of their asset to rise, offsetting the shortfall. These benefits are usually more likely to accrue to those earning higher incomes and this is where you have to wonder if many investors really are benefiting from the negative gearing of their investment properties.
<a href="/images/2016/03/10/Individuals-net-rental-income-by-income-range.jpg" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/10/Individuals-net-rental-income-by-income-range.jpg" alt="">
The ATO data indicates that 72.3 percent of individuals with a loss making investment property have a taxable income of less than $80,000 a year, with 32.3 percent having a taxable income of less than $37,000 per year.
The total value of the losses for individuals earning less than $80,000 equated to $9,756.25 a year or $187.62 per week.  Assuming that they all had a taxable income of $40,000 per year, which represents the middle of the range, the $9,756.25 annually is 24.4 percent of their annual taxable income.
That is a significant proportion of their taxable income and a significant cost to the individual throughout the year just to secure a tax deduction at the end of the year.  If we assume the average income earner that has a taxable income of $51,342 owns an investment property, that investment property is costing them 21.3 percent of their taxable income throughout the year.
There have been many calls for negative gearing to be removed from residential property however, I believe it is extremely unlikely that either side of politics is likely to go down that path. 
Negative gearing of residential property saw the ATO forego $13.285 billion in taxation revenue over the 2010/11 financial year.  What it did allow for, because it is so ingrained in the psyche of those who invest in property, is for private residents to cater to demand for rental properties from those residents that don’t own their own home.  It is clear that the provision of rental accommodation is not a burden that Governments wish to bear however, one has to wonder if foregoing more than $13 billion in tax revenue is a cost that the federal Government can afford to give up.
The data also shows that many lower income earners are investing in negatively geared properties, perhaps many are doing so without understanding what, if any, the true benefits are.  The goal of investment should ultimately be to make a profit not a loss and with capital gains in housing much slower over the past five years and this trend anticipated to continue perhaps some investors should re-assess whether their current negative gearing strategy is truly working for them.
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po-LsXgBTHBmX

Property 101: The negative gearing numbers

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GUEST OBSERVER
With debate raging over who wins and who loses with proposed major changes to negative gearing, attention also falls on which Australian suburbs are most likely to suffer.
The Australian Financial Review recently discussed the “Top 10 suburbs set to suffer under negative gearing plan”. The Australian soon joined this scare campaign. Mandurah in Western Australia, where I spent a recent weekend, is on the AFR’s list.
When I grew up this was a lazy holiday town at the entry to an inlet. It’s now one of Australia’s fastest-growing suburbs with a 50-minute train connection to central Perth. Within walking distance of the town centre is a cluster of relatively recent medium-density mixed-use developments on or near the waterfront. The dolphins and crabs are prolific and opportunities for swimming, boating and kayaking are at everyone’s doorstep.
Unlike most outer suburban developments, the housing is relatively dense – mostly about four to five storeys high, with a couple of blocks up to ten storeys. This is a highly walkable neighbourhood with generous public space. Shops and cafes line much of the ground floor.
<h2>Built density but lacking intensity</h2>
This is not far from the kind of urban development we need a lot more of in Australian cities – places that encourage people to walk to work, shopping and recreation; where densities are high enough to support a good range of shopping and public transport.
The main problem here is that while the built density is relatively high, the population density is less than your average suburb.
The AFR article suggests this is the kind of place that is “set to suffer”, yet these parts of Mandurah already suffer from an occupancy rate that locals estimate at 20%. The empty housing has had a spillover effect into empty shops and offices, empty streets and parks, and poor public transport.
The public space is bereft of vitality (and the safety that comes with it); beaches, parks and walkways are largely empty even on a warm February weekend. While there is lots of built density, there is little intensity of public life. The streets are lined with empty shops used as billboards for real estate and financial services.
<div class="enlarge_hint">While much of this is holiday housing, it is within commuting distance of a major city. How much of it is going to waste simply because those who own it can profit from making a loss under the current negative-gearing rules?</div>
<h2>Bringing empty housing onto the market</h2>
While curbing negative gearing would ease house prices in the short term, in the longer term suburbs like this are set to benefit because it will surely bring much of this empty housing onto the market. Then the synergies of higher-density mixed-use development within reach of good public transport will begin to come into play.
As more residents live within walking distance, more amenities will become viable. The more people walk or cycle, the better the health and transport outcomes.
Ultimately, this is the kind of vibrant walkable city we need to build more of to achieve serious reductions in CO2 emissions – places where we can live great and healthy lives with less reliance on cars.
It is impossible to say how much this production of empty architecture is a function of negative gearing since it also goes hand-in-hand with neoliberal markets and high disparities of wealth. However, the curbing of negative gearing will have a significant impact in getting empty housing onto the market.
This in turn could go some way to reversing this cycle of emptiness – bringing life to the shops, offices, streets, parks and public transport.
<h2>‘Positive gearing’ across Australia</h2>
This is not just a benefit to places like inner Mandurah. It also applies to other empty suburbs and even high-density inner-city neighbourhoods. Southbank and Docklands in Melbourne come to mind as places that produce largely empty buildings – density without intensity.
Negative gearing produces an underutilisation of urban space. The imperative to curb it has important implications for the future of Australian cities.
And this raises a further question – why stop there? If we are looking for new tax revenues that will help to balance the budget, curb CO2 emissions and increase the productivity and vitality of cities, then why not tax the underuse of urban space? Perhaps we could call it “positive gearing”.
Kim Dovey is professor, Architecture and Urban Design, University of Melbourne and author for The Conversation. He can be contacted <a href="https://theconversation.com/profiles/kim-dovey-107660" target="_blank">here</a>.
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jchancellor-FAypfDUnLy

How negative-gearing changes can bring life back to eerily quiet suburbs

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GUEST OBSERVER
After Labor announced proposed changes to negative gearing and the capital gains tax discount, Prime Minister Malcolm Turnbull told parliament that the policy would administer two contradictory shocks, massive shocks, to the residential housing market. 
They are proposing to remove from the market for established dwellings one-third of demand. All investors would be gone. When I say all investors, I mean all investors.
That assertion was questioned by some listeners at the time, including The Guardian’s Katharine Murphy.
Does the prime minister’s claim stack up?
<h2>Not all property investors negatively gear</h2>
Data is not directly available on what proportion of home purchases are made by investors. Data on new home lending from The Australian Bureau of Statistics' Lending Finance figures indicates that between one-third and half of new lending is to investors. And ABS census data shows that just under a third of existing properties are owned by investors.
But not all of them negatively gear. Some do not borrow, and others do not borrow enough to be negatively geared: that is, their rental income is greater than the expenses and loan interest. The tax stats show us that about two-thirds of all housing investors are negatively geared. This suggests that around 20% of housing buyers are negatively geared investors.
<h2>Investor demand for housing will reduce – but not disappear</h2>
Labor’s proposed changes will reduce the after-tax returns on property investment.
Although negative gearing has attracted more attention, Labor’s proposed changes to capital gains tax will have a bigger impact on returns. Reducing the discount from 50% to 25% will increase the effective tax rates on capital gains, bringing the tax rates closer to those that apply to other sources of investment income such as rental income and bank interest.
Labor’s proposed changes to negative gearing will also have an impact. Under the policy, investors who make rental losses – because their rental income is less than their costs, including loan interest costs – will no longer be able to write-off those losses against wage and salary income. But for people investing in new housing there will be no change: they will still able to write-off losses against all forms of individual income.
For most investors in existing properties, the changes to negative gearing mainly affect the timing, not the amount, of tax deductions. Losses can still be deducted against investment income, including subsequent capital gains. But negative gearing may lose some of its psychological appeal. While there is no hard research for Australia, some investment advisors have warned against placing too much emphasis on tax breaks (particularly tax breaks on wages) and not enough on the financial returns to the investment.
Together these policies will reduce investor demand for housing. Indeed, one of Labor’s stated aims of the policy is to make it easier for first home buyers to get into the market.
Some investors will switch to other investment opportunities that offer higher post-tax returns. Others might choose to spend more and invest less. But some will also continue to invest in the housing market, and either borrow less, or simply accept a lower return on investment.
The extent to which investors will vacate the property market will ultimately depend on how much post-tax returns fall, and how sensitive is investor demand for property to changes in returns (what economists would call the “elasticity of demand”).
Our estimates suggest that the changes in effective tax rates from Labor’s policy are relatively modest.
Consider an investor in the top tax bracket, paying 45 cents in the dollar on their marginal income and earning a 6% nominal return on their property (half from rental income, half from capital gain). Let’s say the investor buys a property and then sells it after seven years.
Effective tax rates calculate how much tax is paid on the profit made by the taxpayer. If the investor buys the property outright, the effective tax rate will increase from 33% to 35% under Labor’s policy. If the same investor borrows 40% of the house value then effective tax rates increase from 19% to 22%. And for a negatively geared investor borrowing 80% of the property value, the effective tax rate changes from 5% to 9%.
<a href="/images/2016/03/9/image-20160307-30467-5ajcud.JPG" target="_blank">Click to enlarge</a>
<img src="/images/2016/03/9/image-20160307-30467-5ajcud.JPG" alt="">
 
And any changes in post-tax returns under Labor’s policies may be swamped by annual fluctuations in property prices. As the Commonwealth Bank of Australia Chief Executive Ian Narev recently noted:
I can tell you having a $400 billion home loan book – your assumptions on unemployment and what’s happening in global interest rates will dwarf whatever assumptions you’ve got on the modelling about the impact of negative gearing by a factor of… I can’t tell you the number but it’s a big number.
<h2>A massive shock?</h2>
Under Labor’s policy, other passive investments that generate capital gains, such as shares, will also be subject to a more stringent tax treatment. Other investments that will be relatively more attractive after the change – for example, superannuation and bank deposits – have a very different profile of risk, return and liquidity.
No-one can ever perfectly predict investor behaviour. Ultimately, there are a whole host of factors that people take into account when investing in property, including rental returns (particularly for the one third of positively geared investors), risk perception, familiarity with the asset class and ability to obtain bank finance. In our opinion, modest changes in tax treatment are unlikely to change the decision-making calculus for the majority of investors.
Indeed, looking at other countries with less generous tax treatment for investment properties – US, Canada, Germany and France, for example – there is still plenty of investor activity in housing.
Given the evidence we have seen, it is overreach for the prime minister to say that Labor’s policy will drive away all investors away.
Danielle Wood is fellow, Australian Perspectives, Grattan Institute and can be contacted <a href="https://theconversation.com/profiles/danielle-wood-147710" target="_blank">here</a>.
John Daley is chief executive officer, Grattan Institute and can be contacted <a href="https://theconversation.com/profiles/john-daley-1870" target="_blank">here</a>.
Both are authors for The Conversation.
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Negative gearing changes won't mean all investors depart market

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<div>
Australia has a serious housing affordability problem, according to Richard Holden, professor of economics at UNSW Australia Business School.
"Since 1997 price-to-income and price-to-rent ratios have nearly doubled," he recently wrote in the Australian Financial Review.
"Since 1995, price-to-income ratios have grown 50 per cent more than the OECD average."
He said the undisputed facts were Sydney's price to income ratio of 12.2 makes it the second least affordable city in the world, behind Hong Kong. Melbourne ranks fourth.
"It turns out that London and San Francisco are cheap by comparison."
</div>
<div>In June 2015 he wrote a report for the McKell Institute called Switching Gears, which suggested that certain changes to negative gearing could have a positive impact on housing affordability, the federal budget, job creation and growth.</div>
<div> </div>
<div>"The ALP last week announced a policy that essentially adopts this recommendation." </div>
<div> </div>
<div>He said it respected existing investment arrangements and provided a smooth transition away from negative gearing of existing dwellings, rather than an abrupt disruption that would come from either capping or eliminating it.</div>
<div> </div>
<div>"Modifying negative gearing along the lines of my McKell plan is the market-based, incentive-driven approach to solving our housing affordability problem.</div>
<div> </div>
<div>"It addresses the skewed tax incentives in the current regime, and it uses the power of markets to tackle the housing affordability problem.</div>
<div> </div>
<div>"Perhaps that is why is has been met with general approval from economists like Saul Eslake and Warwick McKibbin, former politicians like Jeff Kennett, and business leaders like Jillian Broadbent."</div>
<div> </div>
<div>When I wrote the report I imagined that a pro-market, pro-incentive, fiscal conservative like Malcolm Turnbull would smile on the plan.</div>
<div> </div>
<div>"Instead, it has been welcomed by the Labor Party and Mr Turnbull has booed it," Richard Holden said.</div>
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Malcolm Turnbull should embrace my negative gearing policy: Richard Holden

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When you start to see politicians debating tax changes you should be afraid – very afraid. We know with the negative gearing debate that neither party has completed any costings preferring to work from the economic theory of guesstimates.
This is a very dangerous path as Australia does not have a Housing Minister and any changes are fraught with danger.
Just this week, the Australian Bureau of Statistics (ABS) revealed that for the first time rental, hiring and real estate service companies made $14 billion before tax in the second half of 2015 while mining companies made $9.8 billion. This is not the time to start meddling with property taxes as an excuse for economic reform policy.
I have no doubt that any changes to negative gearing will distort the market, and should there be an “investor run” prices will inevitably fall.
Australia is currently recording wage growth at a record low of 2.2 per cent a year. This is the lowest annual growth since the ABS started recording annual growth back in 1998. On top of that statistic in the September quarter, the ratio of household debt to income hit a new high of 184.6 per cent which translates to households’ debt now being at 1.85 times their total income.
This record growth in debt is a by-product from record low interest rates. But before we hit the panic button we need to investigate further and try and identify what is causing this.
On many occasions I have said “if there was a gold medal for real estate portfolios Australia would win hands down.” I see no use comparing Australia’s debt ratios with other countries when the Australian model has no tax payable on the principal place of residence and the overseas models do have tax payable on the principal place of residence. Australians work their principal place of residence as their main superannuation platform, which works very well when you have the cash rate at record lows.
If you were a betting person you would definitely be betting that the next cash rate movement will be down. Of course these high debt ratios will be challenged when the Reserve Bank of Australia (RBA) starts increasing the cash rate, but nobody really knows when that will be or in what decade even.
Prior to the Global Financial Crisis the average cash rate over a 25 year term came in at around 7.25 per cent, where based on what we are seeing today mortgage holders are going hard at 2.00 per cent.
Another statistic that is flying well off the radar are reverse mortgages which very few people discuss within the Australian property debate. In its annual Reverse Mortgage Report, Delloitte estimates more than $500 billion of home equity is held by Australians aged over 65, with the total reverse mortgage loan book worth $3.66bn as at the end of 2014.
This figure is naturally added to the Australian household debt figure so this would go part of the way to explaining why we are starting to see record debt levels. Back at the end of 2014 there were almost 40,000 reverse mortgages on issue in Australia with the average size being $92,000, up from $86,000 in 2013. It would then be reasonable to suggest that the number of reverse mortgages would have increased in 2015 as too the average mortgages – this is clearly a growth market.
To put this into further perspective the reverse mortgage market loan book was $3.66bn in 2014 and the Commonwealth Bank home loan portfolio currently sits around $393 billion. With many retirees opting for reverse mortgages this is another reason why we are seeing fewer properties on the market. Although this would change significantly once the cash rate starts increasing or a federal Government starts tampering with negative gearing in an adverse way.
What it does tell us is that Australia needs property investors as they play an integral part in Australian property machinations. If you want to have a rational debate about housing affordability in Australia firstly examine the delays by respective governments who forever and a day burden and choke the supply side of the property industry. It’s obvious to most that they fail to understand the Supply V demand equation.
Furthermore the Labor negative gearing proposal states that this will only apply to new properties. Well somebody should advise them that in December 2008 they lifted the number of properties that can be sold from new developments by foreign buyers from 50 per cent to 100 per cent. Property developers are selling all their new developments directly overseas as that way they can achieve higher prices so the local markets are blocked from buying these developments.
Nor is there any requirement nor legislation stipulating that foreign buyers must rent the property out to the local market – we do know that currently in Australia there are thousands of properties that have been land banked. Politicians are hopeless when it comes to the Australian property market.
The last thing the Australian economy needs is a domino effect with property prices because they are not pretty and should be avoided at all costs. If you want to bring property prices down do it organically by increasing supply which just so happens to be the greatest failure of local, state and federal Governments in the modern economy.
<h4>MOSMAN – 2088</h4>
• Number of houses on the market this time last year – 83
• Number of houses on the market last week – 64
• Number of houses on the market this week – 63
• Number of apartments on the market this time last year – 53
• Number of apartments on the market last week – 52 • Number of apartments on the market this week – 53
<h4>CREMORNE – 2090</h4>
• Number of houses on the market this time last year – 10
• Number of houses on the market last week – 18
• Number of houses on the market this week – 11
• Number of apartments on the market this time last year – 23
• Number of apartments on the market last week – 23
• Number of apartments on the market this week – 25
<h4>NEUTRAL BAY – 2089</h4>
• Number of houses on the market this time last year – 4
• Number of houses on the market last week – 8
•Number of houses on the market this week – 10
• Number of apartments on the market this time last year– 36
• Number of apartments on the market last week – 26
*Number of apartments on the market this week – 25
 ROBERT SIMEON is a director of <a href="https://www.rwm.com.au/" target="_blank" title="RWM" rel="nofollow">Richardson Wrench Mosman and Neutral Bay</a> and has been selling residential real estate in Sydney since 1985.  He has also been writing real estate blog <a href="https://www.rwm.com.au/news/" target="_blank" title="Virtual Realty News" rel="nofollow">Virtual Realty News</a> since 2000. 
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robertsimeon-hRNTwJyXkQ

It’s time for the Australian property debate: Robert Simeon

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GUEST OBSERVER
Politics has its own purgatory, as Malcolm Turnbull and Tony Abbott might have reflected when they sat on the same table at the Howard government’s 20th anniversary dinner on Wednesday. After a day when their animosity had been on shocking display, here they were together, unable to escape.
Among the speakers during this nostalgia night was Peter Costello, whose prime ministerial hopes John Howard held at bay.
Which prompts the question: if you’re prime minister, is it easier to deal with the ambitions of someone who covets your job, or the revenge of one whose job you’ve grabbed? Arguably there are more restraints on an aspirant than on a bitter “ex” with little regard for consequences.
As Abbott has become increasingly overt in his sorties against Turnbull, he is discrediting himself. The defence department has trashed his much-publicised claim this week – on the back of leaked classified material – that the Turnbull government delayed the submarines project.
So far Abbott has been undeterred by fear of self-harm. His critics believe (or hope) the public will say enough is enough. Abbott’s ability to wound would be less, however, if the Turnbull government had its act together.
And that takes us to the dreadfully mismanaged tax policy process.
Under party and other pressures, Turnbull is said to have backed away from action on negative gearing, although it remains on the options list. Superannuation is a maze. It is still unclear when and in what form the tax package will be released. Treasury is now working frantically. Turnbull has become impatient. The expenditure review committee is due to consider tax on Tuesday.
Treasurer Scott Morrison appears spooked, assailed by backbench nerves and media criticism, and fighting to prevent further backsliding from a package he wants substantial enough to finance at least modest and probably targeted tax relief. He and Turnbull often seem in different places, and not just on tax options. Morrison for months noisily ruled out giving the states extra funding to help with health and education. It is now expected Turnbull will provide some pre-election sweetener.
With his credibility already low, Morrison did himself no good when he grabbed a report on abolishing negative gearing on established dwellings done by BIS Shrapnel, which he described as “a very damning … indictment on Labor’s policy”. The report predicted a rise in rents, a fall in new home building, and GDP shrinking by A$19 billion a year on average.
The work had different assumptions from the ALP policy, pre-dated Labor’s plan, and was prepared for a client BIS Shrapnel refused to identify. It contained an embarrassing error in one of its figures.
The report’s methodology and estimates have also come under fire, in a critique from Grattan Institute’s chief executive John Daley and Danielle Wood, a fellow at the institute. And they condemn the fact a report “that would flunk any first-year economics course has been allowed a serious voice in the public debate”.
The concern “goes beyond the claims of this nonsense-on-stilts report”, they argue, to the prominence received by “independent” reports produced to advance vested interests' causes. “No matter how outlandish their claims or how obscure their provenance, the media report them and politicians quote them. The public, confused or frightened by the numbers, forms the view that policy change is simply too risky.”
The message should at least be absorbed by the media, especially as the election approaches. It is not much good appealing to the politicians to exercise restraint. Scaring people is precisely what the government seeks to do in the negative gearing debate. But the rapid discrediting of the Shrapnel report meant Opposition Leader Bill Shorten and Shadow Treasurer Chris Bowen were able to push back with some authority.
As the contest about tax intensifies, the contrast is notable between the performances of Morrison and Bowen.
Morrison has been at odds with his leader; he has been forced back from bold ambitions to modest measures yet to be landed. Bowen has spearheaded robust policies that put the opposition on the front foot in the debate when the government still has nothing on offer. In the House of Representatives he and others have cornered the government with tight questions. Outside parliament, Bowen is quick to have press releases out to counter claims about Labor’s policy.
But the debate will get tougher; Shorten can be thankful his shadow treasurer is good for a lot of heavy lifting. If Turnbull’s treasurer was performing as competently as his “shadow”, Turnbull might be better placed on the tax front.
Meanwhile there has been an interesting development for the double-dissolution watchers. The list of bills the government wants passed in the last week of this session, commencing March 15, does not include the much-talked-about Australian Building and Construction Commission (ABCC) legislation.
The Greens have agreed to extended hours that week to get Senate voting changes through, but not to deal with the ABCC. In public comments the government has repeatedly linked the ABCC legislation to the threat of a double-dissolution election. Its exclusion from the priority list would weaken the case if the government wanted to include it as a “trigger” on the grounds it had “failed to pass”.
But if Turnbull decides to use the brand new voting system to quickly clean out the Senate crossbenchers, he has “trigger” legislation regardless of the ABCC.
 
Michelle Grattan is professorial fellow, University of Canberra and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/michelle-grattan-20316" target="_blank">here</a>.
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Chris Bowen is outshining Scott Morrison in the tax hurdle race

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The federal government has signalled that plans to cap the negative gearing tax benefit as part of its tax reform policy are unlikely to proceed.
When asked last night by 2GB's Money News host Ross Greenwood about negative gearing, treasurer Scott Morrison responded by saying: "You have always got to tailor your policies to the environment you're in."
"Right now we have a very special set of circumstances," he said.
"If we are going to make changes in tax then it has to be made up for by changes in the tax system elsewhere."
"The scope for that has been reduced over time and the final decisions will ultimately be in the budget."
He said that the Labor Party have put forward a policy on negative gearing which they haven't thought through.
"The PM made it clear last September he was putting that issue (negative gearing) generically back on the table to be considered.
"It had been removed before.
"He asked for it to be looked at so there's been a process of looking at that.
"But no one should draw a conclusion from that, that necessarily means the government would make changes to the negative gearing.
"They were saying the same thing about GST.
"People were asserting we were going to do something differently on that.
"We looked at it (GST) carefully, we made a considered decision and I think we made the right decision.
"You don't rush to failure on this stuff.
"We have to be careful and be patient that we get these calls right," the treasurer said which appears to clear the way for an easy assault on Labor's tax plans in the run-up to the federal election.
Senior sources have confirmed to The Australian Financial Review that while the proposal to cap negative gearing deductions at $20,000 a year had been looked at, it has been decided "we're not going to touch it".
For the policy to have raised the estimated $1 billion it was worth annually, it would have had to apply to existing investors with multiple properties. A source said it was "in our DNA not to apply tax increases retrospectively".
Treasurer Scott Morrison has previously flagged the option of a cap, describing it as targeting the "excesses" of negative gearing. He and his colleagues have stopped using that description in recent days in a strong hint that there will now be no change.
The AFR noted on Wednesday, Mr Morrison, when pressed, used the term "enthusiasms".
The decision to not proceed with changes to negative gearing leaves the government with just superannuation tax concession and tax deduction trade-offs to help fund plans to deliver a small personal income tax.
Labor says its policy – to halve the 50 per cent capital gains tax discount for investors to 25 per cent, and to limit all new negative gearing to new homes only from July 1, 2017 – will raise $32 billion over 10 years and generate an extra 25,000 construction jobs annually because of the demand for new housing.
But the government is expected on Thursday to seize on a report by property and building industry advisory group, BIS Shrapnel, which claims the opposite.
It claims Labor's negative gearing plans will increase rents by an average of 10 per cent, or $2600 a year, depress new home construction by 4 per cent and shrink gross domestic product by $19 billion a year.
BIS Shrapnel claims the plans will also lead to 175,000 fewer jobs over 10 years, shrink government tax revenues by $1.65 billion a year and put 70,000 households into rental stress.
But the Grattan Institute chief executive John Daley slammed the report as untrustworthy and implausible.
He said the findings were the product of skewed and grossly exaggerated assumptions and the report could not be trusted because BIS Shrapnel will not say who commissioned it.
You can listen to <a href="https://www.propertyobserver.com.au/https://www.2gb.com/audioplayer/160231" target="_blank">Scott Morrison's chat with Ross Greenwood here</a>.
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Treasurer Scott Morrison hints negative gearing changes are off the table

<html><body>
The consequences of limiting the tax deductibility of negatively geared residential properties would impact any expected tax savings, according to a new report from BIS Shrapnel.
BIS Shrapnel's report, Economic Impact of Limiting the Tax Deductibility of Negatively Geared Residential Investment Properties, said changes to the current negative gearing setup would go well beyond any saving of the income tax concession, to a multitude of unintended consequences.
It added limiting the tax deductibility of negatively geared residential investment properties would have consequences that go well beyond any tax saving to the Federal budget and suggested new home building will shrink by around 4% nationally, or 7,200 dwellings a year and GDP would shrink by around $19 billion per annum on average, or 1 percent of Australia’s $190 trillion annual income.
The report suggested:
•  Rents will rise by up to 10% ($2,600) per annum
•  New home building will shrink by around 4% nationally, or 7,200 dwellings a year
•  GDP would shrink by around $19 billion per annum on average, equating to some 1% of Australia’s $190 billion annual income
•  175,000 fewer jobs would be created over the next 10 years, resulting in the unemployment rate rising from 5.8% to 5.9%
•  Government revenue across a range of taxes would shrink by $1.65 billion per annum
•  70,000 extra households would be pushed into housing rental stress
•  If the government were to compensate these stressed households, it would require an additional subsidy outlay of $650 million per annum.
"Government revenue across a range of taxes would shrink by $1.65 billion per annum... 70,000 extra households would be pushed into housing rental stress," it noted.
"If the government were to compensate these stressed households, it would require an additional subsidy outlay of $650 million per annum. In other words, the impact would go well beyond any saving of the income tax concession, to a multitude of unintended consequences. 
"The Federal government will save $2.1 billion per annum as fewer individuals deduct losses from property, but will incur an income tax loss from lower home building of $1.8 billion. Stamp duty revenue will fall by around $1.1 billion per annum; GST collections will drop by $0.2 billion a year. 
"Altogether, total tax revenue is likely to fall by $1.65 billion per year... at the end of a 10-year horizon the market would find a new normal, but the legacy will be a ‘lost decade’. Rents will sit 2-10% higher depending on the city."
Estimated price of units in 2026
<div class="moveable_w" data-element-id="table_25816751" data-object-id="0c8633ff-c21a-44c3-9f3f-b17f64e66ffd" data-object-type="chart">
<div id="table_25816751" class="moveable chart ig-theme-group-chart">
<div class="igc-chart inner">
<div class="igc-table-container">
<table id="Chart_25816751" class="igc-table igc-table-align-center __visible tablesorter tablesorter-default">
<thead><tr class="tablesorter-headerRow">
<th class="igc-table-header igc-hidden-cell igc-table-fixed-column tablesorter-header tablesorter-headerUnSorted" scope="col" data-column="0">
<div class="tablesorter-header-inner"> </div>
</th>
<th class="igc-table-header tablesorter-header tablesorter-headerUnSorted" scope="col" data-column="1">
<div class="tablesorter-header-inner">Full negative gearing</div>
</th>
<th class="igc-table-header tablesorter-header tablesorter-headerUnSorted" scope="col" data-column="2">
<div class="tablesorter-header-inner">Limited negative gearing</div>
</th>
<th class="igc-table-header tablesorter-header tablesorter-headerUnSorted" scope="col" data-column="3">
<div class="tablesorter-header-inner">Difference</div>
</th>
</tr></thead>
<tbody class="igc-table-body">
<tr>
<th class="igc-table-header igc-table-header-left igc-table-fixed-column">Sydney</th>
<td class="igc-table-cell">873,000</td>
<td class="igc-table-cell">820,000</td>
<td class="igc-table-cell">-6.1%</td>
</tr>
<tr>
<th class="igc-table-header igc-table-header-left igc-table-fixed-column">Melbourne</th>
<td class="igc-table-cell">602,000</td>
<td class="igc-table-cell">585,000</td>
<td class="igc-table-cell">-2.9%</td>
</tr>
<tr>
<th class="igc-table-header igc-table-header-left igc-table-fixed-column">Brisbane</th>
<td class="igc-table-cell">590,000</td>
<td class="igc-table-cell">565,000</td>
<td class="igc-table-cell">-4.2%</td>
</tr>
<tr>
<th class="igc-table-header igc-table-header-left igc-table-fixed-column">Adelaide</th>
<td class="igc-table-cell">425,000</td>
<td class="igc-table-cell">420,000</td>
<td class="igc-table-cell">-1.2%</td>
</tr>
<tr>
<th class="igc-table-header igc-table-header-left igc-table-fixed-column">Perth</th>
<td class="igc-table-cell">590,000</td>
<td class="igc-table-cell">580,000</td>
<td class="igc-table-cell">-1.6%</td>
</tr>
<tr>
<th class="igc-table-header igc-table-header-left igc-table-fixed-column">Canberra</th>
<td class="igc-table-cell">540,000</td>
<td class="igc-table-cell">535,000</td>
<td class="igc-table-cell">-1.0%</td>
</tr>
<tr>
<th class="igc-table-header igc-table-header-left igc-table-fixed-column">Hobart</th>
<td class="igc-table-cell">358,000</td>
<td class="igc-table-cell">350,000</td>
<td class="igc-table-cell">-2.4%</td>
</tr>
</tbody>
</table>
</div>
</div>
</div>
</div>
<div class="moveable_w" data-element-id="particle_11401cc9-cac0-4b5a-a43f-5d28d864c4ed" data-object-id="11401cc9-cac0-4b5a-a43f-5d28d864c4ed" data-object-type="particle">
<div id="particle_11401cc9-cac0-4b5a-a43f-5d28d864c4ed" class="moveable particle body-text ig-theme-group-text">
<div class="bodytext">
<div class="innertext" data-placeholder="">Source: BIS Shrapnel</div>
</div>
</div>
</div>
 
Estimated unit rent in 2026
<div class="moveable_w" data-element-id="table_25816227" data-object-id="28dd2e96-a8be-4ac3-b9c6-52489593236d" data-object-type="chart">
<div id="table_25816227" class="moveable chart ig-theme-group-chart">
<div class="igc-chart inner">
<div class="igc-table-container">
<table id="Chart_25816227" class="igc-table igc-table-align-center __visible tablesorter tablesorter-default">
<thead><tr class="tablesorter-headerRow">
<th class="igc-table-header igc-hidden-cell igc-table-fixed-column tablesorter-header tablesorter-headerUnSorted" scope="col" data-column="0">
<div class="tablesorter-header-inner"> </div>
</th>
<th class="igc-table-header tablesorter-header tablesorter-headerUnSorted" scope="col" data-column="1">
<div class="tablesorter-header-inner">Full negative gearing</div>
</th>
<th class="igc-table-header tablesorter-header tablesorter-headerUnSorted" scope="col" data-column="2">
<div class="tablesorter-header-inner">Limited negative gearing</div>
</th>
<th class="igc-table-header tablesorter-header tablesorter-headerUnSorted" scope="col" data-column="3">
<div class="tablesorter-header-inner">Difference</div>
</th>
</tr></thead>
<tbody class="igc-table-body">
<tr>
<th class="igc-table-header igc-table-header-left igc-table-fixed-column">Sydney</th>
<td class="igc-table-cell">$695</td>
<td class="igc-table-cell">$735</td>
<td class="igc-table-cell">5.8%</td>
</tr>
<tr>
<th class="igc-table-header igc-table-header-left igc-table-fixed-column">Melbourne</th>
<td class="igc-table-cell">$470</td>
<td class="igc-table-cell">$515</td>
<td class="igc-table-cell">9.6%</td>
</tr>
<tr>
<th class="igc-table-header igc-table-header-left igc-table-fixed-column">Brisbane</th>
<td class="igc-table-cell">$490</td>
<td class="igc-table-cell">$515</td>
<td class="igc-table-cell">5.1%</td>
</tr>
<tr>
<th class="igc-table-header igc-table-header-left igc-table-fixed-column">Adelaide</th>
<td class="igc-table-cell">$350</td>
<td class="igc-table-cell">$385</td>
<td class="igc-table-cell">10.0%</td>
</tr>
<tr>
<th class="igc-table-header igc-table-header-left igc-table-fixed-column">Perth</th>
<td class="igc-table-cell">$535</td>
<td class="igc-table-cell">$565</td>
<td class="igc-table-cell">5.6%</td>
</tr>
<tr>
<th class="igc-table-header igc-table-header-left igc-table-fixed-column">Canberra</th>
<td class="igc-table-cell">$475</td>
<td class="igc-table-cell">$505</td>
<td class="igc-table-cell">6.3%</td>
</tr>
<tr>
<th class="igc-table-header igc-table-header-left igc-table-fixed-column">Hobart</th>
<td class="igc-table-cell">$350</td>
<td class="igc-table-cell">$365</td>
<td class="igc-table-cell">4.3%</td>
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<div class="innertext" data-placeholder="">Source: BIS Shrapnel</div>
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Negative gearing reform could lead to lost decade: BIS Shrapnel

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GUEST OBSERVER
The many questions around whether negative gearing should be removed.
Let's look at some of the questions and the facts. 
1. Currently there are around 30% of the population who rent or around 7.2 million people who are either currently tenants or looking for accommodation. 
2. The government provides only around 4% of public housing for tenants.
3. The private sector provides around 96% of the properties for tenants through investment properties.
4. The ATO figures shows $13 billion in tax deductions claimed by property investors in FY2013.
5. That represents $4.3 billion lost in revenue to government at an average tax rate of 30 percent.
6. If private investors pulled out of property market and the burden of public housing fell more heavily on government, would it cost the government more than the $4 billion it currently gives up in tax. Where would the government get the funds to build these properties to replace the private investors when they are already in such debt 
7. The State governments collect millions of dollars in Stamp Duty and Land Tax due to the active trading and investing in all types of properties. Will the removal of negative gearing have a domino effect on the States economy?
8. Currently the real estate industry has replaced the slowing down in the mining industry. Do we risk killing off another industry and currently is helping the economy in light of the current government debt levels.
9. What happens to industries such as the blue collar industry carpenters, plumbers, electricians etc plus real estate agents and banks etc. if the private investors pulled out of the property market. 
10. Negative gearing applies to all other investments such as shares, businesses, companies and other investments. Is it legislatively possible to remove negative gearing from only one industry, the property investors and not from other investment like shares and business.
11. Negative gearing is simply a fancy term attributed to making losses. If one makes a loss it can be offset against other income.
12. This is the same argument put forward by Labor when they introduced the Mining tax on a booming mining industry. Some accused the Labor Govern= ment of having a "Tax it till it disappears" mentality. But what happens to economic growth if we tax our most productive industry.
13. Is Labor repeating the same mistake with the property industry. Tax it till it disappears.
14. Most property investors are not rich. Over 70% earn income at around $80,000pa or less.
15. Australia's population is aging and should we be encouraging people to become self funded by taking risks in investing in real estate and therefore not rely on an old age pension. The governments debt levels are unsustainable.
16. The great Hawke/Keating Labor government replaced negative gearing after 18 months when rents went through the roof and the waiting list for public housing doubled as private investors left the property market and created a huge shortage of rental properties.
17. Negative gearing means someone is paying out more than they are earning. In other words losing money. Why would anyone do that? It's in the hope that they can make up the losses and more, due to capital gain of the investment. This occurs not just in property but applies to those who invest in shares as well as in businesses and many forms of investments where there is prospect of capital growth.
18. So why would someone take such risks because there are no guarantees that the property market will increase greater than the losses suffered. Many property investors have lost hundreds of thousands dollars.
19. It's an extremely risky strategy and the risk applies across the board to other investments also.
20. It's made more risky if they cannot claim the losses like every other industry can. How can this be fair when one has to pay tax on capital gains but not the losses from negative gearing. It feels like the government wants it both ways.
21. Labor's call to reduce capital gains tax concession from 50% to 25%. But what if someone has made a capital loss. One cannot claim capital losses against other income. This has increased the risk to investing in real estate. Will the returns from real estate now be so low that it no longer becomes an attractive investment to put one's money into and what does the reduction is demand do to prices?
22. Is there sufficient incentive to attract investors back into property to help meet the demand for property and in order to keep both rents and prices down.
23. Our economy is not healthy. We have head winds coming out of Europe and USA. The global market is unstable. Is this a risk to our only industry that is keeping our economy going. Is this the right time to do this?
24. Are property investors discriminated against when one considers they pay stamp duty on purchase and pay land tax for owning it.
25. Share investors do not pay a "share tax" simply for holding the shares or stamp duty on purchase of shares. Share investors still are permitted to negative gear their portfolio.
These are the questions being asked by both sides of those for and those against getting rid of negative gearing. 
 Ed Chan is founder and non executive chairman, Chan &amp; Naylor Accountants and can be contacted <a href="https://www.chan-naylor.com.au" target="_blank">here</a>. 
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Property 101: Ed Chan's 25 facts you need to know about negative gearing

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Malcolm Turnbull's tax change options have been narrowed by what the Canberra press gallery has dubbed as the dramatic partyroom intervention of Tony Abbott.
Some MPs believe it is now "practically impossible" for Turnbull to move on negative gearing in any way, now that Abbott has so clearly positioned himself.
It has been suggested Prime Minister Malcolm Turnbull has been corralled by his predecessor, Tony Abbott. 
The opposition leapt on Abbott's re-engagement, depicting it as a strategic "shirt-fronting" of a weakened Prime Minister by his predecessor.
The Age suggested Scott Morrison was caught in the middle haing previously referred to "excesses" in the negative gearing policy.
One MP said it was apparent that Abbott had come prepared - even testing election lines, which Turnbull would have no trouble using if he backs no increases. These were: a tax on super is an attack on elderly Australians; a tax on capital gains is an attack on battlers trying to get ahead; and, a tax on negative gearing is an attack on families.
Praising what he called Mr Turnbull's "brilliant" campaign against Labor's negative gearing changes, he warned the party room colleagues: "We can't go down this path ourselves."
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