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PIPA Welcomes Negative Gearing Decision, Urges Government To Tackle Affordability "Sensibly"

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Property Investment Professionals of Australia (PIPA) has welcomed the federal government's decision to rule out changes to negative gearing, while also urging the government to take a sensible approach to housing affordability policy.

The latest housing finance figures show that house prices are on track to continue to rise faster for at least another six months, while a speech by the treasurer suggests the government will shy away from touching negative gearing in the May budget.

The latest housing finance figures from the Australian Bureau of Statistics showed a big drop in investor finance in February of 5.9%.

The size of the drop was largely unexpected and suggested that the measures to limit investor lending by the Australian Prudential Regulation Authority have had an impact.

Prime Minister Malcolm Turnbull said land supply was the key influence on housing affordability, rather than negative gearing tax exemptions.

PIPA chair Ben Kingsley held discussions on housing affordability with government representatives in April. He said the association welcomed the federal government’s decision to rule out changes to negative gearing and "hoped" this was reflective of a well-considered approach to addressing affordability issues both on the buying and renting sides.

“Housing affordability is challenging, but there’s no easy fix. We welcome the government’s focus on this issue but urge them to adopt sensible measures that reflect the national market needs, rather than any of the radical changes that have been floated by some corners of the market such as axing negative gearing and SMSF property investment."According to data from CoreLogic, residential housing stock alone is estimated to be worth $6.9 trillion, which is more than three times Australia’s total share market capitalization of $1.7 trillion and our total superannuation pool of $2.2 trillion.

“Any policy changes that could impact the value of this asset class, need to be thoroughly considered,” Mr Kingsley said.

“The residential property cycle plays a significant role in the country’s overall economic performance, as we’ve seen by the recent strong stamp duty receipts in New South Wales which have helped to fund the state’s robust infrastructure program.”

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Article originally posted at: https://theurbandeveloper.com/articles/pipa-welcomes-negative-gearing-decision