From the Desk of our CEO

miltonrendell

Milton Rendell, Real Estate Plus CEO

There certainly has been some interesting policies put out by the political parties in recent weeks, and no doubt there will be a few more before the 2nd July when we all vote to decide our new federal government.

One of the big topics being discussed is negative gearing, this is a topic that pops up every few years and I think personally again is a distraction but something that does cause a lot of debate. Obviously as a real estate agent I would like to see it stay and I think it will. There are too many down sides if it doesn’t.

Investors will retreat for a while and people building their super will look elsewhere in the short term at other investments which may affect prices with lower demand. What will that mean to the rental market? Well could mean a lot of things but the one that maybe is there will be less rentals, now today that may not be an issue but later it will be, with a growing population and more people depending on government assistance. There are many who rent all their lives and many who have the government support to help them pay their rent. Now with a shortage of rentals the supply demand rule will apply, usually that means rents going up now some will say more people will buy but what about the ones who will never be able to, what do they do? Then will the shortage struggling families who will look to the government to supply more housing, does that mean the government wants to be building housing estates? Locals don’t like it and the holding costs are one hundred percent the governments. Where will the money be found? Then there is the maintenance of the properties as they age and the list goes on. So maybe helping the people who invest to help our economy and community may deserve something in return.

So there are social issues on top of financial with higher density of government owned property and I think many of us are aware of the past issues of suburbs built for government housing not all have been bad but the potential is there. With interests so low, the actual negatively geared properties I would suggest potentially are far fewer in any case so is it not as big an issue as being made out. With the slowing of markets also introduces less sales, so less stamp received for state government. I think the ripples are far larger than people understand. Anyway we will see come 2nd July what we can do going forward, but with interest rates so low it is a great time to buy.

Milton Rendell, CEO

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