{"id":6497,"date":"2012-12-15T17:34:34","date_gmt":"2012-12-15T22:34:34","guid":{"rendered":"http:\/\/goldstocksforex.com\/?p=6497"},"modified":"2012-12-15T17:34:34","modified_gmt":"2012-12-15T22:34:34","slug":"australia-negative-gearing-and-its-impact-on-the-housing-market-rp-data-research-blog","status":"publish","type":"post","link":"https:\/\/thepatientinvestor.com\/index.php\/2012\/12\/15\/australia-negative-gearing-and-its-impact-on-the-housing-market-rp-data-research-blog\/","title":{"rendered":"Australia: Negative gearing and its impact on the housing market &#124; RP Data Research Blog"},"content":{"rendered":"<p>Cameron Kusher extends the following argument in favor of negative gearing:<\/p>\n<blockquote style=\"background-color:#ddddff;\"><p>Many in favour of removing negative gearing from property say that it should occur due to the fact that housing is an unproductive asset class. My argument is that given that housing provides shelter, if investors don\u2019t purchase these assets, it would then be the responsibility of the Government to provide this shelter. Ultimately, that would mean that anyone that pays taxes would be funding housing for those who can\u2019t afford it themselves.<\/p><\/blockquote>\n<p>What happened to individuals being responsible for their own housing? A large part of rental demand is due to poor housing affordability. If we made housing more affordable, the rental market would shrink.<\/p>\n<p>Kusher highlights that in September 1985 the government quarantined negative gearing interest expenses on new transactions.<\/p>\n<blockquote style=\"background-color:#ddddff;\"><p>The reason why negative gearing was reinstated in September 1987 was that it was proclaimed that rents rose sharply on the back of a fall in housing market investment.<\/p><\/blockquote>\n<p>The following chart shows that rental growth accelerated between September 1985 and September 1987:<br \/>\n<img data-recalc-dims=\"1\" decoding=\"async\" class=\"aligncenter\" alt=\"Rental Growth\" src=\"https:\/\/i0.wp.com\/blog.rpdata.com\/wp-content\/uploads\/2012\/12\/Annual-change-in-CPI-Rent.jpg?w=525\" \/><\/p>\n<p>But no explanation is given for the earlier peak in rental growth rates &#8212; 13% in 1982 &#8212; prior to restrictions on negative gearing.<\/p>\n<p>And what is not mentioned is that interest rates were rising. Standard variable bank mortgage rates peaked at 15.5% in 1986\/1987. That would account for any decline in new housing investment, even though this is not evident from investor finance commitments.<\/p>\n<p>via <a href=\"http:\/\/blog.rpdata.com\/2012\/12\/negative-gearing-and-its-impact-on-the-housing-market\/\">Negative gearing and its impact on the housing market | RP Data Research Blog<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Cameron Kusher extends the following argument in favor of negative gearing: Many in favour of removing negative gearing from property say that it should occur due to the fact that housing is an unproductive asset class. My argument is that given that housing provides shelter, if investors don\u2019t purchase these assets, it would then be &hellip; <\/p>\n<p class=\"link-more\"><a href=\"https:\/\/thepatientinvestor.com\/index.php\/2012\/12\/15\/australia-negative-gearing-and-its-impact-on-the-housing-market-rp-data-research-blog\/\" class=\"more-link\">Continue reading<span class=\"screen-reader-text\"> &#8220;Australia: Negative gearing and its impact on the housing market &#124; RP Data Research Blog&#8221;<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_mo_disable_npp":"","_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[40,5],"tags":[1733,1858,2428],"class_list":["post-6497","post","type-post","status-publish","format-standard","hentry","category-australia-nz-countries-regions","category-economy","tag-housing-affordability","tag-interest-rates","tag-negative-gearing"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.2 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>Australia: Negative gearing and its impact on the housing market &#124; RP Data Research Blog - the patient investor<\/title>\n<meta name=\"robots\" content=\"noindex, follow\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Australia: Negative gearing and its impact on the housing market &#124; RP Data Research Blog - the patient investor\" \/>\n<meta property=\"og:description\" content=\"Cameron Kusher extends the following argument in favor of negative gearing: Many in favour of removing negative gearing from property say that it should occur due to the fact that housing is an unproductive asset class. My argument is that given that housing provides shelter, if investors don\u2019t purchase these assets, it would then be &hellip; Continue reading &quot;Australia: Negative gearing and its impact on the housing market &#124; RP Data Research Blog&quot;\" \/>\n<meta property=\"og:url\" content=\"https:\/\/thepatientinvestor.com\/index.php\/2012\/12\/15\/australia-negative-gearing-and-its-impact-on-the-housing-market-rp-data-research-blog\/\" \/>\n<meta property=\"og:site_name\" content=\"the patient investor\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/profile.php?id=61572934660810\" \/>\n<meta property=\"article:author\" content=\"https:\/\/facebook.com\/people\/The-Patient-Investor\/61572934660810\/\" \/>\n<meta property=\"article:published_time\" content=\"2012-12-15T22:34:34+00:00\" \/>\n<meta property=\"og:image\" content=\"http:\/\/blog.rpdata.com\/wp-content\/uploads\/2012\/12\/Annual-change-in-CPI-Rent.jpg\" \/>\n<meta name=\"author\" content=\"Colin Twiggs\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Colin Twiggs\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"1 minute\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/thepatientinvestor.com\/index.php\/2012\/12\/15\/australia-negative-gearing-and-its-impact-on-the-housing-market-rp-data-research-blog\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/thepatientinvestor.com\/index.php\/2012\/12\/15\/australia-negative-gearing-and-its-impact-on-the-housing-market-rp-data-research-blog\/\"},\"author\":{\"name\":\"Colin Twiggs\",\"@id\":\"https:\/\/thepatientinvestor.com\/#\/schema\/person\/d42b18d516a80149d739845749ac6454\"},\"headline\":\"Australia: Negative gearing and its impact on the housing market &#124; 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I feel it is worth repeating here because of the current debate around negative gearing. Axe negative gearing for a healthier property market Apr 25, 2011: Saul Eslake The property market would look a lot healthier without it, writes Saul Eslake.\u2026","rel":"","context":"In &quot;Australia &amp; NZ&quot;","block_context":{"text":"Australia &amp; NZ","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/countries-regions\/australia-nz-countries-regions\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":8385,"url":"https:\/\/thepatientinvestor.com\/index.php\/2013\/09\/03\/saul-eslake-50-years-of-housing-policy-failure-macrobusiness\/","url_meta":{"origin":6497,"position":1},"title":"Saul Eslake: 50 years of housing policy failure | | MacroBusiness","author":"ColinTwiggs","date":"September 3, 2013","format":false,"excerpt":"Leith van Onselen quotes Saul Eslake: Research by Judy Yates of the University of NSW shows that home ownership rates among younger age groups declined dramatically between the 1991 and 2011 Censuses \u2013 from 56% to 47% among 25-34 year olds; from 75% to 64% among 35-44 year olds; from\u2026","rel":"","context":"In &quot;Australia &amp; NZ&quot;","block_context":{"text":"Australia &amp; NZ","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/countries-regions\/australia-nz-countries-regions\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":15045,"url":"https:\/\/thepatientinvestor.com\/index.php\/2017\/03\/27\/is-the-coalition-prepared-to-die-defending-the-housing-bubble\/","url_meta":{"origin":6497,"position":2},"title":"Is the Coalition prepared to die defending the housing bubble?","author":"ColinTwiggs","date":"March 27, 2017","format":false,"excerpt":"I don't always agree with David Llewellyn-Smith but love his pithy style. Here he takes the Turnbull government to task over their housing and immigration policies. Cross-posted with kind permission from Macrobusiness: ....Because that\u2019s what it looks like. We all know that the Coalition hearts the housing bubble. Everything it\u2026","rel":"","context":"In &quot;Australia &amp; NZ&quot;","block_context":{"text":"Australia &amp; NZ","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/countries-regions\/australia-nz-countries-regions\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":15091,"url":"https:\/\/thepatientinvestor.com\/index.php\/2017\/04\/04\/sorry-folks-this-aint-no-property-bubble\/","url_meta":{"origin":6497,"position":3},"title":"Sorry folks, this ain&#8217;t no property bubble","author":"ColinTwiggs","date":"April 4, 2017","format":false,"excerpt":"I have been predicting the collapse of the Australian property bubble, so feel obliged to also present the opposite view. Nothing like confirmation bias to screw up a good investment strategy. Here Jessica Irvine argues that the property bubble will not burst: Believe me, no one is keener than me\u2026","rel":"","context":"In &quot;Australia &amp; NZ&quot;","block_context":{"text":"Australia &amp; NZ","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/countries-regions\/australia-nz-countries-regions\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":9542,"url":"https:\/\/thepatientinvestor.com\/index.php\/2014\/03\/23\/australias-housing-affordability-crisis\/","url_meta":{"origin":6497,"position":4},"title":"Australia&#8217;s housing affordability crisis","author":"ColinTwiggs","date":"March 23, 2014","format":false,"excerpt":"This private submission by Michael Dromgool to Australia's Housing Affordability Inquiry identifies supply restrictions as the key cause of the current housing affordability crisis: Traditionally the flexible forces of demand and supply in the property market self-managed the development of land for housing. Development occurred in locations where and when\u2026","rel":"","context":"In &quot;Australia &amp; NZ&quot;","block_context":{"text":"Australia &amp; NZ","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/countries-regions\/australia-nz-countries-regions\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]},{"id":15280,"url":"https:\/\/thepatientinvestor.com\/index.php\/2017\/05\/14\/rba-stuck\/","url_meta":{"origin":6497,"position":5},"title":"RBA stuck","author":"ColinTwiggs","date":"May 14, 2017","format":false,"excerpt":"Great slide from the NAB budget presentation: The RBA is in a cleft stick: Raising interest rates would increase mortgage stress and threaten stability of the banking system. Lowering interest rates would aggravate the housing bubble, creating a bigger threat in years to come. The underlying problem is record high\u2026","rel":"","context":"In &quot;Australia &amp; NZ&quot;","block_context":{"text":"Australia &amp; NZ","link":"https:\/\/thepatientinvestor.com\/index.php\/category\/countries-regions\/australia-nz-countries-regions\/"},"img":{"alt_text":"","src":"","width":0,"height":0},"classes":[]}],"_links":{"self":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts\/6497","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/comments?post=6497"}],"version-history":[{"count":0,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/posts\/6497\/revisions"}],"wp:attachment":[{"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/media?parent=6497"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/categories?post=6497"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/thepatientinvestor.com\/index.php\/wp-json\/wp\/v2\/tags?post=6497"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}