In case you missed it, NG stats all wrong

The Property Couch exclusive
Episode 227 | Exposed: “Dodgy Data” Driving Labor’s Negative Gearing Policy - The Property Couch

AFR story broke
ALP's negative gearing policy based on 'dodgy data'

ALP stats and financial modelling turning to dust on NG changes. Will we see a back track by ALP. Everyone starting to admit they got it wrong.
ABS thought 4% of investment was on new dwellings, turns out to be closer to 43%. All credit to Ben Kingsley.

Fun to watch!

 

Nothing like a bit of BS from BS, policy based on a misnomer (of course the bulk of recent purchases for investment has been driven by overseas OTP investors.

Sad tge OTP market matures and these settle, new activity will revert to established dwellings.

 

Same data that was always used afaict. Small difference (around 8B).

 

Any big jump in construction activity for residential property will see the numbers move around a bit for a few years.
With the sheer amount of apartments being built in our 2 biggest cities there will probably be some big movements in the numbers for a few more years
But there only a new apartment once .
Once there sold again in a few years time they are established property.
Then you get a big oversupply followed by a big construction downturn until the next boom

 

When it comes to apartments, my (no data to prove) impression is that the majority of sales go to overseas buyers. For most of the massive developments in the ten years I've lived here in Melbourne there seems to have been little marketing pitched at local buyers (perhaps because they've got older and wiser). And for the vast majority of overseas buyers NG is probably a non issue since they've not got other earnings to set their losses against.

My first Melbourne property purchase was a Central Equity apartment bought OTP 2000 when I was living in UK (in those days CE ran 4-5 sales tours to UK each year) and as a UK taxpayer I could only roll forward my Aus property losses against future foreign property earnings, not even UK rental earnings (if I'd had any).

 

I think the point here is ALP signalling to stop the bad wealthy investors from ripping off the battlers on the back of a loser. They look to save only a percentage (that which is NG) of the 67% of investment purchases on established properties. They’ve already promised to allow NG on new properties. Regardless of real impact on housing prices and market which has been debated; the policy will make nothing like the difference they thought it would. Will they admit it?

 

False from the figures bandied around that would indicate the difference is 8B but overwhelming still in positive position for removing loss of revenue through negative gearing again wages for existing properties.

Interesting Nick by the way. Is koolies a red to the dog?

 

I think we should get rid of NG. But I think even if labor gets in it will be hard.

Politicians don’t like to kick a dog when it’s down. Well, they do acruallly, but not when it’s the economy.

 

Revealing these figures as false also completely weakens the criticism that resi investors do not "add value" to the economy

 

Perhaps Labor realises the economy is stuffed and they kinda want to get out of stuffing it any further, but they need to find a way to save face. They can now blame the dodgy data if they think reneging on their NG policies might win them more votes next month.

 

@Ben Kingsley - thoughts?

 

The only thing still keeping our economy ticking along is the high price of commodities, especially iron ore.
Any big downturn in China would send us straight into a recession ,especially in the current environment with the high levels of debt in many housholds and years of no real wage growth. .
Encouraging more people to take on bigger debt, was never going to solve the problem.

 

The figures will be surprising as I understand it the data blowing the story is coming from Australian mortgage lending. Therefore I’d expect it to not be affected by foreign OTP apartment purchasing as other have stated. It sounds to me like the NG policy as it stands is effective in achieving what ALP want to achieve by changing it.

 

When I bought (from UK) my two Melbourne OTP apartments in 2000 and 2003 the finance came from CBA - they sent a lending manager as part of each Central Equity sales mission to London. My understanding was that banks don't generally finance property purchases in other countries?

 

I have not seen any mention of this on ABC website this week. Have any other media outlets raised it?

 

I have seen coverage from The Aus & AFR. Preaching to the converted with that readership.

 

Be interested to know what the policies are for banks like hsbc or bank of china.

 

These clowns think they are competent enough to restructure a major sector of the economy when they can't even get their most basic of stats right on the number of investors who are buying new vs existing dwellings. Bowen went on TV and stated that only 4% of investors are buying new properties ("96% failure rate") when it is closer to 45%. They are making massive changes to industries they know nothing about.

 

Labor deletes negative gearing policy information

More from AFR. ALP dropped the detail from their site. Its simply a case of now there’s no detail (there were lots of gaps before), there’s nothing to be picked apart. We’ll see what they come up with.

Property losses that are claimable against future profits will be a lot more palatable than adding to the cost base.

 

Your not joking about details being wiped. Check this out

https://www.chrisbowen.net/media-releases/positive-plan-to-help-housing-affordability/

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