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Bill Shorten, Labor’s “prime minister-in-waiting”, has set his negative gearing policy in stone, the REIA has said, and it is going to hurt the property industry big time by driving up rents and even costing some agents their jobs.
REIA president Malcolm Gunning said that he believes Labor is without doubt going to go to next year’s general election with its policy to halt negative gearing.
“They are of the opinion that it will resonate out there,” Mr Gunning told REB.
“I met with the prime minister-in-waiting about two weeks ago and he said ‘we’re taking this to the next election’. So, from REI’s point of view, we’re saying be wary because look at what happened under the Keating government.
“We have an economy that is staring to tighten, the construction industry is one of the biggest employers. It helped us transition out of the mining boom and while the economy is going pretty well now, construction is a big employer so that pipeline of work will pull back.”
Mr Gunning said that there is no question that rents will increase if negative gearing is eliminated.
“Rent is about supply and demand,” the REIA president said.
“So, if our unemployment stays the way it is, our economy continues the way that it is, our immigration stays the way it is at 130,000 a year and we don’t have this supply of property, of course, it is going to drive rents up.
“And then, you have never heard a group of lobbyists squeal louder than the tenant union. They will be baying, saying bring in rent control because people can’t afford the rent.”
Mr Gunning also said that some real estate agents will go out of business.
He said that it’s already happening, and that it is a consequence of having too low a barrier to entry.
“The less the investment you have in your career, the quicker you’ll change your job,” Mr Gunning said.
“Because you don’t have the investment in yourself. If you have spent three years at uni and you are looking to get into the property industry, you will hang on for dear life.”
But Mr Gunning said that there is currently a “very low” entry level to get a job in real estate.
“There are a lot of very, very good residential real estate agents, wonderful people who contribute towards the community. But there are a lot of people who fall into it because they think there is a lot of money and they can drive a fast car and dress in a smart suit and, really, have only one week of education.”
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