Scrapping negative gearing tax breaks will not ease housing affordability, one industry pundit has claimed.
Yesterday ANZ Bank’s chief executive Phil Chronican called on the federal government to review whether negative gearing tax breaks foster “an unhealthy focus on housing as an investment”.
But the Urban Taskforce’s chief executive Aaron Gadiel has rubbished Mr Chronican comments, claiming that 70 per cent of landlords rely on negative gearing tax benefits and the removal of such could damage market activity.
“Small investors are an important source of funding for new home construction,” Mr Gadiel said.
“Investor activity in the residential housing market boosts housing supply, by funding the construction of new homes that renters cannot afford to own outright.”
With the national housing undersupply now exceeding 200,000 homes, it is vital public policies focus on increasing investor activity in the residential property market, Mr Gadiel said.
“Policies that try to force down home prices, without also reducing the cost of supplying new homes, will only kill-off new home construction."