Iwan Sunito's vision for a landmark mixed-use precinct in Sydney's Inner West has taken a major step forward, with approval granted for the $1.9 billion Five Dock development first unveiled earlier this year.

The approved scheme by <a href="https://www.apartments.com.au/developers/one-global-capital">One Global Capital</a> will deliver an 80,500 sqm mixed-use precinct comprising 840 apartments, integrated hotel accommodation, commercial and retail space, alongside publicly accessible open space designed to create a new destination for the growing suburb.

"This is a significant milestone for One Global Capital and for the future of housing delivery in Sydney," Sunito said.

"The Housing Delivery Authority was established to identify major housing projects capable of delivering meaningful supply more efficiently, and we are delighted that Spencer Street has been recognised as one of those projects.”

He said the declaration reflected the rapid progress achieved since acquiring control of the site.

"In less than seven months we have progressed from taking control of the site to securing entry into one of the NSW Government's most important planning pathways. It reflects the experience of our team, the strength of our consultant group led by Urbis, and our long-term commitment to delivering transformational projects that contribute to Sydney's future."

When the project was revealed earlier this year, Sunito described the opportunity as one of the strongest development sites he had worked on.

"I probably hadn't appreciated the uniqueness of the site until more recently when putting together the concept plans," Sunito said.

"The proximity to the water, and the golf course opposite, is unlike any other part of Parramatta Road. We have a unique position and view corridors over the water that makes this one of the best sites I've worked on."

The development has evolved since its initial announcement, with the approved plans increasing the residential component from the originally proposed 750 apartments to 840 homes while retaining the project's focus on creating an integrated neighbourhood rather than a standalone residential development.

Read more:&nbsp;<a href="https://www.apartments.com.au/news/nsw/a-city-within-a-city-iwan-sunito-flags-1-5-billion-mixed-use-precinct-in-five-dock">"A city within a city": Iwan Sunito flags $1.5 billion mixed-use precinct in Five Dock</a>

The precinct will combine apartments with hotel accommodation, commercial workplaces, retail offerings and public spaces, creating a mixed-use environment intended to serve both residents and the broader Five Dock community. The proposal also continues the collaboration between One Global Capital and internationally recognised architect <a href="https://www.apartments.com.au/architects/koichi-takada-architects">Koichi Takada</a>, whose previous work with Sunito includes Infinity, Arc and Skye North Sydney.

Takada previously said the design was driven by a philosophy of integrating nature into the built environment.

"The concept for this development is born from our design approach to naturalising architecture," Takada said.

"The public realm benefits from biophilic design that integrates generous landscaping, and the development is optimised for natural daylight, airflow and water views to foster wellbeing, sustainability and spaces that foster community interaction."

Sunito has consistently described the project as a "city within a city", with a strong emphasis on creating a destination that extends beyond housing.

"We want to create a development that's not only to be seen, but to be experienced by the whole local community," he said.

The approval comes as Five Dock continues its transformation ahead of the opening of the Sydney Metro West line, with the new Five Dock station set to significantly improve connections between the Inner West, Parramatta and the Sydney CBD.&nbsp;

The precinct will also benefit from its proximity to the Parramatta Road corridor, nearby waterfront parklands and established retail and dining offerings that have made Five Dock one of Sydney's most tightly held Inner West suburbs.

Joel Robinson

Iwan Sunito secures approval for $1.9 billion Five Dock mixed-use precinct

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]

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

Negative gearing

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Bill Shorten believes there’s an affordability crisis in Australia. He believes he knows how to fix it. But I’m sure he doesn’t believe the tax policy he announced is the solution. What he announced is the smokescreen.
The tragedy for Shorten, the dead man walking of Australian politics, and the Labor Party, is that he is telling Australian households that he is going to force down the value of their homes. And that, in reality, the most likely outcome is that the cost of new housing will rise.
Short-term Shorten and his advisors don’t appear to realise that the high cost of new housing is the key to the affordability situation in Australia. And his policy will probably make it worse.
Firstly, the issue of an affordability crisis. Shorten apparently believes we have one. I believe we don’t.
The Housing Affordability Index shows that national affordability today is considerably better than it was five years ago. Sydney, following three years of big price growth, is the only jurisdiction that doesn’t have a demonstrably better affordability situation that it did in 2010. Everywhere else in Australia does. Even Sydney is marginally better off than in 2010. 
There were improvements in 2015 in many parts of the nation, reinforcing yet again that most of Australia did not have a property boom any time recently.
Jurisdictions which have a better affordability position now than 12 months ago include Perth (11% better than a year ago), Darwin (13.5% better), Hobart (7% better), regional WA (13% better), regional NSW, regional South Australia, regional Tasmania (6% better) and regional NT (10% better).
Affordability is essentially unchanged in Brisbane, regional Queensland and regional Victoria, compared to a year ago.
Sydney’s position is 4.5% less favourable, Melbourne 7.6% less, Canberra’s 9% less and Adelaide 2.6% less. But in each of those locations, affordability remains better than five years ago, even in Sydney (just). 
What we have from Federal Labor is what we got from APRA: over-the-top policy impacting the whole nation to attempt to solve a Sydney problem.
There’s going to be a major backlash against Labor once people realise the essence of Shorten’s proposal on affordability. He’s going into the upcoming federal election telling the electorate that the value of their homes is going to fall.
The essence of the tax policy announced on 12 February is that his proposed changes to negative gearing will somehow make housing more affordable. He’s not proposing to force down interest rates nor to lift average incomes, therefore the only way homes can become more affordable is for home values to fall. This would be seriously unpalatable for voters in the 70% of households that own their homes. It’s the ultimate election loser.
But home-owners need not worry. Shorten’s announced policies won’t cause home values to fall. They won’t make a single home cheaper in Australia because they don’t address the real causes of poor affordability. They have targeted the wrong culprits. 
And I’m quite sure Shorten knows that. Like most politicians, he’s not interested in addressing the real issues. He simply wants to give the appearance that he is. And he has achieved that by taking cheap shots at an easy target.
There are many problems with the announced policy. The first is that it’s based on a false premise - that the 15% or so of property buyers who are negatively-geared investors have a greater influence on property prices than the other 85%. (That 85%, incidentally, includes the biggest and most influential chunk of the buying market – home-buyers other than first-home-buyers – the people who have the numbers, the financial capacity and the motivation to pay high prices for homes).
Shorten says typical houses cost about three times average annual income 30 years ago and now it’s six times. He’s claiming that the small number of buyers who are negatively-geared investors are responsible for that change. He doesn’t provide any evidence to support this outlandish and quite illogical claim. He doesn’t provide it because it doesn’t exist.
He further claims that eliminating the tax claims of 15% of buyers will make housing more affordable. He doesn’t explain how that would happen.
But he is claiming his policy will make prices lower. If he’s right, that would be alarming for most voters. It would be also alarming for the nation, because the family home is the core asset for most Australians and the basis of their ability to provide for their retirement. 
This latter point is crucial. It’s the most important issue in the whole debate about negative gearing but is never mentioned.
Successive governments have told Australians they have to provide for their own retirement, because the Government can’t afford to fund the increasing numbers of retirement age people through pensions. We know that superannuation doesn’t cut it, so Australians need to invest to be self-funded in retirement. Governments need to encourage that. 
Negative gearing is one way to encourage people to invest - keeping in mind that it applies to all forms of investment, not just real estate. 
Eliminating it will stop many from buying real estate. Long-term it will cost the Federal Budget more than it saves - especially as the claimed savings are not great. Shorten’s figures suggest it will save the Budget just $570 million in the first four years, although I doubt he has considered the overall impact through loss of revenue to state and federal budgets – given that people buying investment property pay stamp duty, land tax and capital gains tax.
Shorten thinks that keeping negative gearing on new homes will cause investors to switch to the new product. But many won’t - because new homes are too expensive. On average, they cost $100,000 more than the equivalent existing home. That’s why 90% of investors (and most first-home buyers) buy existing properties rather than new. The negative gearing tax deductions don’t come close to making up for the price differential.
But if he’s right – and investors do switch to buying new homes – it will make new dwellings more expensive. If he’s right that prices are forced up by negatively-geared investors competing with home buyers, then switching all investors to new housing will create massive competition for a finite product and force up prices. Keep in mind that state government grants for first-home buyers are available only to buyers of new homes – and current Federal policy forces foreign investors to buy new properties, not existing.
So, if Shorten succeeds, we will have first-home buyers competing with Australian investors and foreign investors for new properties. Everyone will be trying to buy a finite supply of new homes, given that Australia is in the midst of a period of record creation of new dwellings and doesn’t need more. Shorten’s policy won’t make housing cheaper, it will make it more expensive.
And that brings us to the real issue in the affordability debate - the one that politicians including Short-term Shorten don’t want to talk about: the reality that government taxes and charges are responsible for the high cost of new housing. Multiple research studies have confirmed that more than 40% of the cost of new house-and-land packages are taxes and other government charges. Eliminate those and suddenly new homes are affordable to most buyers. A $400,000 product can be sold for $240,000.
So the real problem is not tax benefits flowing from government to the real estate industry - it’s the money flowing in the opposite direction, the taxes that are ripped out of the real estate industry.
Politicians never discuss this factor. They’re addicted to the massive amount of revenue they rip out of the real estate industry - over $70 billion in a typical year. They would rather blame unpopular minorities - a standard political tactic - than address the real issue.
The Federal Government, after two very long and expensive parliamentary inquiries which achieved little, has decided to make foreign investors the scapegoats. But forcing a small number of foreigners to sell back their mansions won’t make housing cheaper for first-home buyers.
Now the Federal Opposition has decided to make negatively geared Australian investors the scapegoats. It’s dishonest, deceitful and, frankly, disgusting.
Terry Ryder is the founder of <a href="https://www.hotspotting.com.au/" target="_blank">hotspotting.com.au</a>. You can <a href="https://mailto:ryder@hotspotting.com.au" target="_blank">email him</a> or follow him on <a href="https://twitter.com/hotspotting" target="_blank">Twitter.</a>
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terryryder-YECXbqmri2

Bill Shorten's Opposition makes negatively-geared investors the scapegoats: Terry Ryder

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GUEST OBSERVER
The issue of negative gearing has roared to the centre of our national political debate.
Last weekend Labor leader Bill Shorten announced major changes to negative gearing and to capital gains tax. The Parliamentary Budget Office estimates that Labor’s policy could raise $32 billion over 10 years.
These are risky changes for our industry and for the economy given they come at a time when growth is so delicately poised.
Major changes to negative gearing and capital gains tax would have far-reaching effects throughout the economy. If enacted, Labor’s policy will distort the market, hit rents, hurt jobs and make it so much harder for families to plan their economic futures – all this without any modelling of its impact on rents, construction levels, jobs or state budgets.
However, it is not only the Opposition that is being tempted by the possibility of big new tax licks.
As yet, we do not have clarity over the Turnbull Government’s position on property taxes. While some frontbenchers and backbenchers have expressed support for the existing system of negative gearing, the Government’s position appears to be fluid.
That’s why the Property Council is putting the case to politicians of all political backgrounds not to damage an industry that supports 1.1 million jobs throughout the economy and generates one ninth of our national income.
Two million Australians own an investment property. Property has always been part of the ‘Australian dream’ and it has been a proven means for Australians on middle incomes to build their wealth.
Playing around with negative gearing policy doesn’t make sense and it’s sure not worth the economic risk.
 
Ken Morrison is the Chief Executive of the Property Council of Australia and can be contacted <a href="https://www.propertycouncil.com.au" target="_blank">here.</a>
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jchancellor-FAypfDUnLy

Negative gearing changes not worth the risk: PCA's Ken Morrison

<html><body>
GUEST OBSERVER
Negative gearing is set for its biggest change in decades. Once considered the sacred cow of federal government policies, both major parties are proposing changes ahead of this year’s federal election.
The Labor party has already unveiled its policy, which involves only allowing negative gearing on new houses and cutting the generous 50% capital gains tax concession to 25%.
The Government has not confirmed its stance and has attacked Labor policy, but has crucially left its options open.
Less than 12 months ago, even considering changes to negative gearing was considered “unpopular” at best with then-Prime Minister Tony Abbott reassuring voters that there would be no changes to negative gearing.
Now, while neither the Liberal government or Labor opposition are keen to abolish negative gearing entirely as the Greens and some economists (most notably Saul Eslake) have proposed, both sides of politics are claiming they will “make the system fairer”.
<h2>So what has prompted this change?</h2>
First, a quick refresher on negative gearing. Gearing is the use of debt (such as a mortgage) to increase the amount of money that may be invested. Negative gearing occurs when the cost of this debt (for example, the interest charged) exceeds the income from the investment (like the rent).
Why would anyone want to incur a loss? The most widely promoted reason is because this net loss may be deducted against the investor’s taxable income, lowering their overall tax bill. This is clearly going to benefit those investors with higher incomes more than those with lower incomes. And, the statistics show that those with more to gain are more likely to take advantage of it:
 
<a href="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/111456/area14mp/image-20160215-22573-a6cfb3.png"><img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/111456/width668/image-20160215-22573-a6cfb3.png" alt=""></a>Proportion of tax filers with negatively geared investment properties by income band 'Better Tax', Tax Discussion Paper, Australian Government, March 2015
<div class="enlarge_hint"> </div>
 
There is a second benefit from the property investor’s perspective - the treatment of capital gains. When a capital gain on the investment asset is realised (it is sold), the investor gets a 50% discount on the capital gains tax.
For many years now, investment properties have been the most popular investment asset after the owner-occupied home and superannuation. Like any other investment, including shares, borrowers may take on debt to facilitate the property purchase. The benefits from negative gearing, combined with the perception of housing as a “safe” asset class with steady capital appreciation has fuelled the flow of investor capital into the market.
But now, with growing public awareness of the operation of negative gearing, its cost through missed tax revenue, and increasing housing affordability concerns, even those benefiting from negative gearing are questioning whether it is appropriate.
<h2>Comparing the alternatives</h2>
The Coalition government has been reluctant to commit to any policy changes, instead hinting at “capping” the amount of negative gearing benefit that may be claimed. In a way, this is a reinvention of the 2011 Gillard government proposal to target just the “wealthiest” investors who own portfolios of investment properties. We might expect to hear more details from Treasurer Scott Morrison in his Wednesday Press Club address.
The Labor party, by contrast, has made the first solid move. In so doing they have made negative gearing a major election issue and will force the government into presenting a real policy proposal, likely as part of the 2016-17 Budget.
The Bill Shorten-Chris Bowen policy announced over the weekend has been in the works since April 2015. If implemented, negative gearing would apply as usual to properties purchased prior to July 2017. After this date, however, investors would only be able to claim negative gearing against newly constructed investment properties.
<h2>But will it work?</h2>
The Government’s suggested approach would effectively create a “progressive negative gearing”. The tax rate increases (because the discount decreases) as income increases. While still lacking details, tackling the problem this way more reasonably considers the broad range of individuals who own investment properties, from teachers and nurses to the country’s most wealthy.
Labor argues that the asymmetry of its gearing policy between new and existing properties will divert investment to housing construction and boost the housing supply.
However, critics of the Labor proposal argue that it will trigger a rush of investors to the existing housing market prior to the July 2017 change, in turn reigniting a house price bubble.
Neither the opposition nor their critics are right and this is why:
<ul>
<li>
To truly benefit from a negative gearing investment strategy, the property buyer would be hoping to win on the capital gains side. For that to occur, property prices need to keep rising, yet that is exactly what the policy is hoping to contain. Savvy investors will know this and take their savvy dollars elsewhere.
</li>
<li>
If you still believe there will be a boom in 12 months time, the better strategy would be buy now (well, technically, when or if Labor are successful at the election) in order to sell to some sucker then.
</li>
</ul>
An even more critical flaw in the Labor proposal is the absence of strategy addressing when and where we will see this new housing supply.
Fundamentally, either approach makes housing a less attractive investment. In the short term investors will look to move their capital into other asset classes, primarily the stock market, which has been volatile.
It could take decades to see the broader implications of removing the incentive to invest in housing over other assets if existing property owners continue to benefit from “grandfathering” the current rules. Therein lies the flaw with arguing this policy change will also help to repair the federal budget (remembering the owner-occupier still makes their capital gains completely tax free).
Ultimately, the tide has turned politically on negative gearing. Whichever party sells their proposal best (alongside changes to superannuation and the GST) will be the election winner.
Danika Wright is lecturer in finance, University of Sydney and author for The Conversation. She can be contacted <a href="https://theconversation.com/profiles/danika-wright-121868" target="_blank">here</a>.
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Sacred cow no more: what the proposed changes to negative gearing really mean

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GUEST OBSERVERS
The Labor party took everyone by surprise over the weekend when it announced it would limit negative gearing to new housing and reduce the capital gains tax discount to 25%.
Proving negative gearing is no longer politically untouchable, the government has hinted its own policy may go some way in the same direction. But even then, some of the myths and half-truths peddled by vested interests have returned to haunt the debate.
Listening to the housing industry you would think that property tax concessions single-handedly drive new housing supply, keep a lid on rents and provide an opportunity for middle and low income earners to build wealth. In reality, these costly tax breaks increase speculation activity in the housing market, reduce affordability for first home buyers and primarily benefit high income earners. So why have some of these myths proved so enduring?
<h2>Myth 1: Changes will hurt mum and dad property barons</h2>
Like many myths, this one relies on some degree of truth – there are many middle income earners who negatively gear – but the emphasis on this group as the primary beneficiaries of property tax concessions relies on a statistical sleight-of-hand.
The government this week pointed out that most people that negatively gear property earn less than A$100,000. This is perhaps less surprising when you consider that so do almost 90% of the population: $100,000 a year puts you well in upper income territory. And the proportion of taxpayers negatively gearing is much higher for those earning over $100,000 than below this amount.
 
<img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/111620/width668/image-20160216-6548-1kdin4.JPG" alt="">
 
But compounding this myth is way its proponents use taxable income to show the distribution of tax benefits. People who negatively gear have lower taxable incomes because they are negatively gearing. This explains the high proportion of people with no taxable income owning loss making property investments – their declared losses are so large they have reduced their taxable incomes to zero. When we adjust to look at people’s incomes before rental losses are taken out we see that the vast bulk of the tax concession goes to those at the top. The top 10% of income earners receive almost 50% of the tax benefit from negative gearing.
 
<img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/111618/width668/image-20160216-22587-7yfscr.JPG" alt="">
 
Capital gains are even more skewed towards the wealthy. The top 10% of income earners receive almost 70% of the capital gains.
But what about all the property investing nurses and teachers we hear so much about? Well, there are some teachers and nurses that negatively gear – around 12% and 9% of them respectively. But they are much less likely to use these tax breaks than anaesthetists (29%), surgeons (27%) and finance managers (23%). And the average tax breaks received by those in the high income professions are also much larger, with the average anaesthetist reducing their tax bill by ten times more than the average teacher.
<h2>Myth 2: Negative gearing promotes new housing supply</h2>
The property industry argues that tax incentives for investment housing encourage more homes to be built. If so, it is a very inefficient way to do it. More than 93% of property lending is for existing housing.
Because negative gearing increases the price of homes it may encourage a little more building. But the big restraint on new building is not a lack of profitability in housing, but the availability of land and the planning permissions required to increase density in inner and middle suburbs. Tax concessions in this supply constrained environment mainly just bid up prices for the limited new supply.
In any case, most policy proposals carve out new supply. The Labor policy continues to allow full tax write offs for rental losses on new housing. So if anything the proposed policy change would encourage new supply.
<h2>Myth 3: Negative gearing keeps rent prices lower</h2>
But the most enduring myth around negative gearing concerns its role in controlling rents.
To understand the origin of this myth, we need to explore some history as well as economics.
The property industry claims that rents rose when the Hawke government restricted negative gearing in 1985. But this is a Sydney-centric version of the past. Rents did rise rapidly in Perth and rose somewhat in Sydney. Yet inflation-adjusted rents were stable in Melbourne and actually fell in Adelaide and Brisbane. In Sydney and Perth population growth and insufficient residential construction – due to high borrowing rates and competition from the stock market for funds – not the policy change, led to the rent rises.
 
<img src="https://62e528761d0685343e1c-f3d1b99a743ffa4142d9d7f1978d9686.ssl.cf2.rackcdn.com/files/111619/width668/image-20160216-22593-18cs5nz.JPG" alt="">
 
The industry also claims that if negative gearing is restricted, landlords will try to pass on some fraction of their higher tax costs by pushing up rents. But will they succeed?
Rents are ultimately determined by the balance between demand and supply for rental housing. In property markets – as in other markets – returns determine asset prices, not the other way around. Rents don’t increase just to ensure that buyers of assets get their money back.
Many other landlords with investment properties that are profitable won’t be paying higher taxes. Tenants will try to beat rent rises by threatening to move. So competition in rental markets will limit material rent rises.
Some investors may sell their properties if tax concessions are less generous. This might reduce house prices, but it will not increase rents. Every time an investor sells a property, a current renter buys it, so there is one less rental property and one less renter, and no change to the balance between supply and demand of rental properties. Indeed, one of the benefits of changes to negative gearing is that it makes housing more accessible for first home buyers.
The Labor party was brave to propose changes to negative gearing and capital gains tax concessions. But until changes like these are made, the property industry will continue to try to muddy the debate with myths and half-truths, and most ordinary Australians will be the losers.
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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Three myths on negative gearing the Australian housing industry wants voters to believe

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GUEST OBSERVER
Here's my opinion on the possible effects of the markets based on Labor’s policy proposal. We might make a further assessment once we see more details from the Libs. 
Lets consider some of the fears that have been raised by various lobby groups who have argued both for and against.
Would there be a surge in rents?
In our opinion, we think no. And that is based on what happened in history as well as the fact that if Labor’s policy passed, it would keep negative gearing on new property.
Lets first consider history.
<a href="/images/2016/02/17/48566a79-6a5d-4f00-af6e-21b7564fd5b6.png" target="_blank">Click to enlarge</a>
<img src="/images/2016/02/17/48566a79-6a5d-4f00-af6e-21b7564fd5b6.png" alt="">
As most of you are aware, Negative gearing was briefly scrapped by Paul Keating (As Federal Treasurer), Starting July 1985. It was then restated in Mid 1987.
As the chart illustrates, while rents were rising, certainly there was no spike in rental growth rates over that time. Indeed rental growth rates were returning back to be in line with the CPI rises recorded over that period. Rental growth rates were slower than what was recorded in the early eighties.
Post the period, rents did accelerate, however so was inflation as the economy entered into an overheated period post the stock market crash of 1987. Rental growth rate completely feel away as the economy entered into recession in 1990. At no time during this period did rents fall, and that is because overall inflation in the 80s was still relatively elevated. Rents and inflation have historically been closely correlated.
For those who are interested in the city by city break up over this time, ABC Fact Check compiled an accurate story last year.
As is illustrated by ABC most of the rises this time were primarily driven from Sydney and Perth with vacancy rates in these two cities already low prior to the scrapping of Negative Gearing.
Of course, the period 1985 to 1987 was a turbulent period for the economy and major economic reform. We had the slump in the Australian dollar caused by a blow out in our current account deficit, a deregulated financial sector, a stock market boom, followed by the almighty crash of October 1987. It was indeed the roaring eighties.
In this regard, we think the evidence of a spike in rents, directly attributed to the scrapping of negative gearing is scratchy at best. And worse, it is misleading.
But just in case there is a relationship there, Labors' proposal to keep negative gearing on new properties would most likely ensure a strong supply side response to the market. We have seen such directed stimulus work on the markets before, namely in the form of various first home owner grants, so we are confident, the market is responsive to such stimulus. 
A surge, followed by a slump in the market?
This would have to be one of the largest risks in Labor’s proposal. As the cross over date approaches at 1 July 2017, I believe there is a risk of  a surge in investor demand for existing property to take advantage of the grandfathering provisions. Then once the date is reached, a subsequent slump could occur by the drop off in demand from investors. Once again, this is not without its precedent. This phenomena occurred during the introduction of the GST and it also happened when the first home owners grants were repealed in 2003 and 2010.
Of course, this scenario is not guaranteed, and yes, there is a chance investors would see through the ramification of such a possible slump, and then therefore hold off buying on mass. But somehow I think the animal spirits are likely to take over as they have done the past. This risk certainly cannot be completely ruled out.
A solution to this is a scaling out of concessions on existing property over a period of time. I think for example a two year phase out period would do much to reduce this risk.
New properties record a price surge. But on resale would be discounted. 
We believe it is likely that a surge in demand for new properties would see an additional premium placed on such properties compared to the existing market. In our experience, off-the-plan developments, particularly for multi-story apartments come on at an average 20% premium to comparable existing units. Arguably this happens due to the ‘new’ nature of the product compared to existing properties which have older fixtures and fittings. This premium is eventually reduced to over time as ‘wear-and-tear’ develops on the property.
What may happen though is that the “20%” premium may further increase as demand surges. Remember, developers are always trying to maximise profit margin and there is no better way to do that then to lift the price! This would not be a desirable event at all as it would increase the chances of considerable investor capital losses on any resale, especially within the first five years of the life of the property. Remember, secondary purchasers will not be able to access the negative gearing benefits once the property is resold back into the market.
I also cant help myself scoff at the recent claim by Chris Bowen when he said
“Investing in a new property is not in any sense more risky than buying an existing property.”
Take it from me as someone that has assessed, analysed, owned, sold real estate of various property types over the years, new property is more risky than existing property. Lets just start with contract risk.
Has anyone read all the rescinded contracts that have taken place in Sydney last year over sunset clauses? Has anyone been reading on the appalling resale rates in areas such as Docklands over the years? Is anyone aware that quite a few builders/developers have gone belly up over the years?
Likely Scenario – An adjustment phase with some periodical distortions in the market, but no rent spikes.
We believe that should Labor’s proposal succeed there would be an adjustment period where, yes, many investors may stay away from existing property for a period of time, but only until such time that a rise in yields gives them incentive to start buying existing properties again. This would happen as investors would demand a higher yield to offset the lack of tax concessions.
But such a period would not go on forever. Once yields are higher, investors would then re-enter the market. Potentially yields could rise to the point where existing residential properties are cash-flow positive from day one, or at least, cash flow neutral. Which I believe would be a positive for the asset class over the long run.
For those advocating for a return to better value on residential property, the reduction in negative gearing concession may well trigger this process. 
But this adjustment does not necessarily mean there would be an outright “decimation of the market”. We may well likely see for example a period of stagnation in property prices for existing property. Or prices rising more slowly than rents.
I suspect the outcome here would be reliant on interest rate settings and the overall health of the economy. But to ensure such a more stable outcome, we do strongly suggest to Labor that a scaling out approach is a safer strategy. 
Louis Christopher is managing director, SQM Research and can be contacted <a href="https://www.sqmresearch.com.au/index.php" target="_blank">here</a>.
{mijopolls 130}
 
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No rent spikes or market decimation under Labor's negative gearing: Louis Christopher

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GUEST OBSERVER
Recent announcements by both major parties suggest the long-held bipartisan consensus over negative gearing is finally breaking.
While we can expect anguished cries from the property industry, the two proposals for reform point to just how deeply flawed negative gearing is, and why neither change goes far enough.
The proposals point to two deep contradictions at the heart of negative gearing: it is designed to deal with housing affordability (that is, demand for housing is higher than supply) by increasing demand; and it is a policy to encourage savings, that simultaneously encourages debt, and rewards those who already save far more than those who find it difficult to save.
First, though, it’s useful to clarify what negative gearing is. It’s a tax rule that allows investors (not only property investors, but mainly property investors) who run their investment at a loss to claim that loss against their other income.
Why would a rental property run at a loss? Usually because the investor borrows most of the purchase price, and interest repayments on the loan (mortgage) are higher than the income (rent).
In most other countries this would mean the investor did not have to pay tax on the rent they received. But it would not allow them to reduce the tax they pay on their other (usually wage and salary) income. Australia is an exception.
So negative gearing encourages people to invest in property, and it particularly encourages them to invest by borrowing most of the price of the house. It might already be obvious why this is a very odd kind of housing and investment policy, seemingly designed to encourage people to over-extend and expose themselves to big risks if property prices were to fall.
<h2>A false fix for affordability</h2>
However, the property industry has long argued that negative gearing helps housing affordability, particularly for renters, by expanding the supply of rental housing. Yet, as opposition treasury spokesman Chris Bowen has recently argued, 93% of negatively geared properties were existing stock – the new owners simply bought them off someone else.
Labor’s policy is to restrict negative gearing to new properties. And given the current policy setting, that is likely to have a positive impact.
But think for a moment about the logic of “increasing supply”. Negative gearing is not a subsidy for builders, it’s a subsidy for buyers. That’s right. The problem is one of too many buyers willing to pay high prices, and negative gearing is designed to create more buyers willing to pay more.
Of course, Labor’s policy will restrict the increased demand to new housing stock. But it highlights a deeper problem in the housing market.
Private developers increase supply only if it is profitable, which is usually when prices are rising. If supply were increased without increasing demand (for example, by direct government investment) that would likely contain rising prices. Doing so through the market, however, simply recreates the existing problem.
<h2>And what about rental prices?</h2>
Critics would argue I am focusing only on housing prices, not rents. Negative gearing is designed to lower rents by allowing investors to rent at a loss. The problem here is that renting at a loss is still a loss unless something else is going on. That something else is capital gains.
Negative gearing only makes sense as an investment strategy because investors make their real money by buying low and selling high. So it works only if house prices are increasing. To the extent it contains rents it only does so “relatively”: rents rise less rapidly than house prices, but both go up because of the scale of new demand.
In some market segments (especially the bottom end) new supply can make things worse. Indeed, “new supply” often increases rents because it demolishes older, cheaper housing to make newer, fancier and more expensive housing. On this score, the best part of Labor’s announcement is the reduction in the tax concession for capital gains. 
Negative gearing’s other claimed benefit is that it encourages people to save. In practice, this “saving” is coupled with large new debts.
This is a serious economic problem because it means tens of thousands of Australian households have been encouraged to take on debt that they might not be able to sustain if house prices fall. And that means governments are forced to keep house prices high to avoid serious economic consequences – as the Rudd government did by increasing first home buyer grants during the GFC.
Second, negative gearing is a tax deduction. That means the higher your marginal tax rate, the more you get. Someone on $200,000 will receive about half their loss back. Someone on $30,000 will only get about a fifth.
So the rewards for saving are much greater for high-income earners (who already save a lot) than for low-income earners (who struggle to save).
This helps explain how two apparently contradictory claims are both true. Most negatively geared investors are mums and dads; nurses and police officers. Yet most of the gains from negative gearing go to the very top of the income distribution.
This is because most of the gains go to a small subset of investors with lots of properties and on very high incomes. The “mums and dads” get a relative pittance.
<h2>Much more needs to be done</h2>
The government seems to know it can raise significant revenue and target only a small group of investors. It can leave the mums and dads alone and still correct most of the inequality and expense by putting a cap on how much any one investor can claim. How far it actually goes remains to be seen.
So both proposals do good things. But once you understand the problems they are meant to resolve, you realise it is almost impossible to make negative gearing “good policy”.
Neither plan “fixes” the problem. They are mitigation at best.
Maybe we can see them both as first steps. After all, with so many investors so heavily indebted, any policy that pulled the rug out all at once has serious economic risks.
We can only hope these policies are the first instalment. Governments serious about housing affordability will also need to invest directly in new supply by funding social and affordable housing. 
Ben Spies-Butcher is lecturer in economy and society, Department of Sociology, Macquarie University and author for The Conversation.
He can be contacted <a href="https://theconversation.com/profiles/ben-spies-butcher-145" target="_blank">here</a>.
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A first step on negative gearing, but not much more

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John Symond and Mark Bouris, the rival mortgage brokers, have both slammed plans to change negative gearing rules.
"It will kill the investment market. I think it's a terrible idea," Mr Bouris, the chairman of financial services group Yellow Brick Road told the Australian Financial Review.
Aussie Home Loans founder John Symond said making changes to negative gearing of property would most likely result in unintended, negative consequences for the housing sector which is "a key economic driver of the economy".
"Many property investors who are negatively geared are PAYG taxpayers and their nest eggs will be hit for six in any change," Mr Symond said.
Mark Boris said any change would "rip the guts out of the economy and growth."
"Politicians talk about the amount of money we lose from people claiming negative gearing tax breaks, but I would love to see the impact on the other side, when the investor market dies off.
"There will be less money spent on concrete, bricks, furniture, televisions, plumbing etc."
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Symond and Bouris united against negative gearing tampering

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Negative gearing is an option you may want to consider if you have money to invest.
With correct financial advice and with the selection of the right property, negative gearing may be a tax efficient investment strategy. That's great if you're thinking about entering the property investment market for the first time or want to increase your investment portfolio.
What is negative gearing?
Negative gearing is when the costs of owning a property  – interest on the loan, bank charges, maintenance, repairs and capital depreciation - exceed the income it produces.
Negative gearing works not only for property, but may also work for shares and bonds.
Investment expenses that you can claim as a deduction
Property owners may be entitled to claim deductions and depreciation against rental income on the property depending on their circumstances. There are three main classes of deductions that may be available 
to property investors:
1. Revenue deductions 
Examples of these include interest on the loan as well as ongoing maintenance and recurrent expenses such as agent’s fees, council fees, advertising charges, bank fees, body corporate fees, cleaning expenses, gas, water, gardening and insurance.
2. Claims for capital items 
Large capital items such as a hot water service, white goods, etc are subject to depreciation. If the owner is entitled to a tax deduction, this means the owner must claim the cost over a number of years rather than all at once. Depreciation schedules are set by the Commissioner of Taxation and range from a few years to more than 20 years.
3. Claims for building allowances 
Owners may also be entitled to claim depreciation of capital works, specifically for building. The current rate is 2.5% over 40 years.
Risks associated with negative gearing
There is an inherent risk associated with borrowing to fund an investment. While negative gearing can help you increase your gain on borrowed funds, the losses can be large in adverse circumstances.
As a general rule, only investors with the financial capacity to absorb the effect of potential falls in investment values, as well as an increased cost in interest payments, should consider negative gearing.
You can minimise the risk of gearing by:
<ul>
<li>choosing your investment property carefully. You need to try and select a property that is likely to increase in value throughout the investment period.</li>
<li>having a sufficient income to cover the interest repayments if your tenants are late with their rental payments, or if your property remains vacant for any time. You also need to be able to fund ongoing repairs and maintenance.</li>
<li>taking out mortgage protection insurance with your investment loan.</li>
</ul>
This example shows how an investment asset may be negatively geared.
Rental income on investment property
$2,000 per month
Less
Expenses (interest, maintenance etc)
($2,500) per month
Council rates and other expenses
($100) per month
Shortfall
$600 per month
The net loss of $600 per month ($7,200 per annum) may be entitled to a tax deduction depending on your circumstances.
Positive gearing
You can also positively gear a property. This occurs when the investment income exceeds your interest (and other possible deductions) expense. 
Note that you may be subject to additional tax on any income derived from a positively geared investment.
You should consult your tax advisors/accountant or financial advisor before launching into a negative or positive gearing investment strategy.
For more information, <a href="https://www.anz.com/personal/home-loans/getting-started/investing-property/negative-gearing/" target="_blank">click here</a>.
 
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Property 101: Negative gearing explained

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GUEST OBSERVER
The Federal Opposition’s new negative gearing policy has been met with mixed responses from the property industry and the wider public, however  has warned against implementing major reform without a full understanding of all the variables at play.
I welcome ideas aimed at promoting affordability, especially for first home buyers, as well as initiatives with the potential to create jobs down the housing industry supply chain but restricting negative gearing to new properties and grandfathering tax treatment for existing investments raises questions - the answers to which are not yet clear.
While new supply has had an impact on the rental market, including in Sydney, where rental growth for apartments has stalled, vacancy rates still remain extremely low across the board.
Greater stability in rents has been a welcome relief to tenants, for so long subjected to hike after hike, yet Labor’s policy could potentially reverse the situation and exacerbate renters’ pain all over again.
Firstly, owners of existing properties who are already using a negative gearing strategy will be reluctant to sell, knowing they will not be able to access the same tax treatment any longer unless they buy something new.
But this would be problematic, as prices for new stock would naturally inflate as demand is heightened among those investors looking to access negative gearing. As such the strength of investment may soften further.
This could lead to a scenario where vacancy rates drop even further, on top of the most recent tightening trend, putting renewed pressure on rents and jeopardising the ability of tenants to accumulate a deposit for their first home.
We see too many what-ifs associated with this policy at this stage so caution seems to be the most appropriate approach.
Labor’s negative gearing policy, designed to unlock flow-on economic benefits associated with supporting new supply, will nonetheless have a variety of other impacts perhaps not yet fully explored with the appropriate modelling.
No major reform should be implemented without comprehensive and detailed modelling, and the various unknowns with this Labor policy seem to warrant further investigation.
History is clear on the importance of comprehensive planning. For instance, when the vendor exit duty tax was introduced some years ago, without the appropriate consideration and number-crunching, it had a significantly detrimental impact.
The vendor exit duty stalled economic activity and failed to reward those who had taken the intiative to invest for their future security.
This is the reason most people invest in property in the first place, so we should ensure we don’t make the same mistake again with negative gearing.
 
 Leanne Pilkington is managing director, Laing+Simmons and can be contacted <a href="https://lsre.com.au/home" target="_blank">here.</a>
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Negative gearing policy raises prickly questions: Leanne Pilkington

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Investors overwhelmingly put money into established housing, some 90 percent plus of the recent annual total of $154 billion of property investment last year, according to CoreLogic RP Data head of research Tim Lawless.
The Sydney buyers' agent Rich Harvey, CEO of propertybuyer.com.au, suggest the Federal Labor proposal that herds investors towards buying buying brand new homes was flawed.
"It was not necessarily the best investment strategy," he told the Australian Financial Review.
"It's really hard to find good quality developments that stack up from an investment perspective,"  he said.
"For our business, it would be a very negative thing because 90-95 percent of our clients invest in established property."
His comments were backed up by Destiny investment adviser, Margaret Lomas, who said negative gearing should not be tampered with because it would reduce the ability of ordinary baby boomers to create retirement income.
"Brand new properties come at a premium, but existing property is affordable and achievable," she said.
Ms Lomas warned the Labor proposal would open the flood gates for more spruikers selling over-priced property. 
{mijopolls 129}
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