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Negative gearing proves its worth

By Kevin Kelly

Negative gearing has existed within the property market for some time, but only over the past few years has it really started to be in the headlines. Some experts believe it creates unnecessary price pressures across the real estate sector, while others think it has quite the opposite effect.

Needless to say, it's an issue that has caused significant divisions. The Real Estate Institute of Western Australia (REIWA) is the latest group to have thrown its hat into the ring, suggesting that negative gearing is essential for encouraging people to invest in real estate in Eaton.

The benefits of negative gearing

President of the REIWA Hayden Groves explained that many people use negative gearing as a means of funding their retirement – not the fat cat investors that some groups would have everyone believe.

"A survey of investors debunked the myth that property investment is just for the wealthy with most respondents having small portfolios of just one or two properties and earning a gross salary of less than $100,000," commented Mr Groves.

It's not the only group to think this way, either. The Property Council of Australia has also made its case for negative gearing, suggesting that any significant changes to the arrangement could cause problems for the entire property market.

Renters reap the benefits

Property Council chief executive Ken Morrison said rents have fallen by around 0.2 per cent across Australia over the past 12 months. This has helped make housing more affordable, while not to mention giving people an incentive to invest in Bunbury East real estate if they're in the position to do so.

The Real Estate Institute of Australia (REIA) warned that changing negative gearing would mean fewer people invest in housing, which could have ripple-through effects for other areas of the economy. People need to be given an incentive to invest, and removing this option could have quite a different effect.

Many cities have seen their lowest rental increases in years, showing just how much of a positive impact negative gearing has had. Can policymakers really justify making changes across the board?

Find your next investment property in Bunbury

Whether you intend to negatively gear your investment property or not, it pays to have a real estate agent in Bunbury on your side to steer you in the right direction. We're on hand to help you find a property that suits your individual requirements, no matter what they might be.

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