FHBs will bear the brunt of housing reforms
The federal Labor opposition’s proposed changes to negative gearing would lock first home buyers out of new homes, according to a property advisory firm.
PUBLISHED IN ‘THE ADVISOR’ ONLINE
The Australian Labor Party’s (ALP) policy proposal to limit negative gearing to purchases of new homes has come under scrutiny from various segments of the property industry, with Crave Property Advisory the latest to weigh in.
The firm’s managing director, Debra Beck-Mewing, has claimed that the policy would restrict access to new homes from first home buyers (FHBs) by placing upward pressure on prices.
“Current commentary on this issue is missing the point in that most economists are focusing on how the changes will impact existing property values,” Ms Beck-Mewing said.
“However, the proposed changes will see first home buyers bear the brunt of the change, which will push the price of new property up.
“New property prices will be hyped as the only way investors can utilise negative gearing, and property spruikers will be in their element as they draw in unsuspecting buyers.”
Ms Beck-Mewing added that the proposed changes to negative gearing would “carve out” a new property classification that would “slant” profits to developers and spruikers.
The managing director’s comments follow the recently released Housing Finance data from the Australian Bureau of Statistics, which revealed that, in seasonally adjusted terms, FHB market share increased to a six-year high of 18.3 per cent of the mortgage market in November 2018.
Further, Ms Beck-Mewing warned that this new property class would be critically unstable and a major trap for FHBs and inexperienced or unwary investors.
“Applying negative gearing only to new property will energise spruikers who receive massive commissions from developers. The spruikers target inexperienced investors and entice them to buy property simply because of the negative gearing treatment,” she said.
“Areas or developments where investors outnumber home owners are prone to instability because investors have a greater tendency to react to changing market forces. Therefore, Labor’s proposed changes will have another negative flow on by putting unsuspecting investors at risk.”
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Crave Property Advisory is a unique property strategy and buyers agent service. As the only independent and unbiased advisory that can help you use any property strategy Australia-wide, Crave’s services extend to home, investment and commercial property. A highly client focused organization, Crave developed the Modular Investing System (MI System) to provide clients with the ability to use a tailored mix of strategies and efficiently build profitable portfolios that create lifetime income.
Debra Beck-Mewing is the CEO of Crave Property Advisory, and has more than 20 years’ experience in property investing, Australia-wide. She has used a range of strategies to build her property portfolio including renovating, granny flats, sub-division and development. Debra is skilled in identifying development opportunities, and sourcing properties that have multiple uses and multiple exit strategies. She is a Qualified Property Investment Advisor, licensed real estate agent and also holds a Bachelor of Commerce and Master of Business.
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