ONE of Australia’s most outspoken property experts has issued a dire warning for Labor, insisting the party could “destroy the property market”.
Last week, Prime Minister Scott Morrison told news.com.au the ALP’s vow to limit negative gearing to newly built homes would actually “invite a housing market crash”.
The policy is at the core of the Labor’s housing proposals â€” and negative gearing policy is expected to be one of the major issues at the heart of the next federal election.
Now, property investor and author Bushy Martin has weighed into the divisive debate, claiming Labor’s plan could end up decimating our already ailing housing market.
“This is an economic disaster in the making and is the only real current threat that has the potential to destroy the property market and slash the value of everyone’s homes,” he told news.com.au.
“Given that over 50 per cent of the average Australian’s wealth is in their home, this will kill the long-term financial future of most hardworking Aussies.
“The naivety of Labor … is staggering in its ignorance â€” this is more surprising given that former Labor Prime Minister Paul Keating made the same mistake in removing negative gearing back in the ’80s only to overturn and reinstate it 18 months later when property values fell and rents started rising rapidly. It appears the only thing we learn from history is that we don’t learn from history.”
Mr Martin said the policy would have serious consequences for the majority of Australians.
“I implore the Labor Party to stop pursuing ill-conceived kneejerk policies aimed at satisfying the squeaky wheel few that will have unforeseen impacts on the many,” he said.
“The Labor Party needs to stop dancing to the tune of the politically correct vocal minority and get out and actually talk to a broad cross-section of the industry which will quickly educate them on the myopic madness of their proposed tax changes which will be equivalent to a tax revolution.
“If the Labor Party pursues this kamikaze path, property values will plunge and trigger the economic ‘recession we did not have to have’.”
But the ALP has hit back at Mr Martin’s claims, with Shadow Treasurer Chris Bowen slamming the investor for promoting a “doom and gloom” scenario.
“Mr Martin appears unaware that Labor announced this policy in 2016 and the doom and gloom scenario he is predicted has been widely rejected, including by the Treasury,” he said in a statement provided to news.com.au.
“Every existing investment is grandfathered under Labor’s carefully designed policy and negative gearing will continue to be allowed for new properties, encouraging new supply.
“Mr Martin may choose to describe young people struggling with an unaffordable housing market as ‘the squeaky wheel few’ but we don’t.”
Mr Bowen said Labor’s plan was all about fairness.
“I understand Mr Martin wants (to) continue to be subsidised by the most generous tax concession for investment in the world, but Labor’s grandfathered policy will put first homebuyers and investors on a more level playing field and is fair for all,” he said.
In recent weeks, the Opposition’s promise to limit negative gearing and halve the 50 per cent capital gains tax discount has ignited fierce debate among leading property experts and everyday Aussies alike.
According to the recently released 2018 Property Investment Professionals of Australia (PIPA) Property Investor Sentiment Survey, despite the current housing downturn, more than 77 per cent of respondents think now is a good time to invest in property, with 52 per cent looking to purchase a property in the next six to 12 months.
However, 48 per cent say changes to investor lending policies have impacted their ability to secure finance for an investment property, with potential changes to negative gearing and capital gains tax policies also a growing concern.
Alexis Carey, News Corp Australia, 26 September 2018