79% of Investors Would Abandon Property if Negative Gearing Scrapped

Survey of 14,000 REIQ members

79 per cent of property owners to switch if negative gearing ditched: REIQ

 

If this does happen, can someone please tell me where to invest my money in shares? As this will bubble and I would like to get in before it does.

 

Talking their book...

93% of loans were to buy existing homes. Investors leaving this market doesn't mean those homes vanish, so no rising rent.

Wonder if the 14% difference is investors who develop/renovate?

 

REIQ Chairman Rob Honeycombe said the findings of the survey sent to more than 14,000 members confirmed that changes to negative gearing would be disastrous for the Queensland property market.

"We now know for a fact that 79 per cent of respondents will get out of property and find an alternative investment strategy that works more effectively and yields a better return," Mr Honeycombe said

So they had a 100% response rate?

That's never happened before in a survey.

Nor do we know what question they asked (whether it was a leading question or even factually correct as to the possible law changes under an ALP government).

But hey it was an REIQ survey - of course it wasn't skewed.

And that's the thing...

Taking new builds (new supply) out of the equation - the stock of housing does not change.

The people who rent now will still need a place to rent under an ALP government - either that or they buy a PPOR (zero sum game).

And why would an investor sell an existing IP that is eligible for NG and isn't impacted upon by the changed law? (knowing that the new law from 2017 will only apply to new builds)

To me probably the only thing we do know for a fact is that the REIQ is running scared.

 

I'm reasonably certain that the number of property investors that hold a portfolio that is overall negatively geared is substantially less than 79%.

 

If as a result, people sell their property to buy shares then they have no idea what they are doing and you shouldn't follow them.

 

I have no idea what I'm doing in property but still made money. Same same

 

Awesome!!!!!

 

Why do they even print this rubbish?

 

This election, focus will be on NG and housing affordability. Articles on these topics appear everyday on newspapers and will continue to do so until election and shortly after election. Another hot topic would be the banks' behaviour...like this one: Sabrina was five months pregnant when she found her bank account had been cleaned out and Sydney market will soon look like New York

 

Actually, nothing is wrong with Honeycomb's statement. He is referring to the 79% of respondents not 79% of investors.

However, though there may have been 14,000 respondents, it is not a random, weighted survey (so we don't know if they represent the actual population of property investors) so he would be wrong to extrapolate to any group outside the group of respondents.

 

I don't want to comment on the credibility of the data, the methodology etc., but the inference that large swathes of investors will 'abandon ship' from EXISTING properties they already own, pre-Jul-2017, sounds a bit ridiculous...

 

I wish that would transpire...........just sensationalist datasphere rubbish...............lies, damn lies and statistics.

I wonder what number/sample of respondents that 79 % refers to.

 

selection bias

 

And by the way, if labor get in and the policy enacts, I believe there will still be opportunities for property investors. Just different kinds of opportunities.

 

That's different. In property there is basically nothing to know, buy and hold. Your profit will be made by inflation and cheap credit. In shares or trading as a whole - you got to know what you are doing. The knowledge can come only after years and sometimes decades of practice.

 

I can see it now. It'll be just like the lead up to the 1929 stock market crash. Everyday people with no idea how to invest but they did. Australians will do the same.

 

That's correct. When an average housewife tells you the difference between swap and spread it's time to get to the sidelines ASAP.

 

Not unusual for the CBA...their claim to be the most unethical bank is true!

They seem to have scandal after scandal!!

 

I don't agree with the policy but couldn't agree more with this statement.

Its not just ordinary mums and dads, the performance of "some" so called professional fund managers also leaves a lot to be desired.

I agree "trading" can take a long time to master, and very few do, But "investing" in markets can be quite simple. If you can grasp the concepts of property investment you are more than capable of share investing. A buy and hold principle can also be applied to share investing. An easy strategy for those wanting to make the step into shares is using ETF's. By setting up a simple/diversified all ETF portfolio, holding long term and applying a dollar cost average strategy.

This strategy is currently being put to the test by W. Buffett who has bet a Million dollars against some fund managers that buying the market through a single ETF (S&P 500) will beat an active stock picking strategy. The term of the bet is over a ten year period and Buffet is well ahead so far.