‘A coup de grâce for the property market’: Labor’s negative gearing crackdown slammed
Labor has confirmed it will stand by a proposed crackdown on negative gearing, despite the cooling property market.
The Opposition insists its negative gearing policy will make things easier for first-home buyers. But Treasurer Josh Frydenberg says pursuing it in the current market climate is reckless and will compromise those with equity in their home.
More then 100,000 first-home buyers picked up loan approval last year, the highest figure since 2009. First-home buyers’ share of the total number of owner-occupier loans was 18% in 2017, a big jump form 12.9% in 2016. Given this, a growing chorus of commentators say Labor’s proposal is unnecessary.
Economist Terry McCrann agrees.
“This would be the coup de grâce potentially for the property market,” McCrann tells Luke Grant.
“It would be so destabilising for the market. It would be very destructive right across the board.”
“The key thing here is timing. If the market was how it was two-years-ago, it wouldn’t have been necessarily a coup de grâce. Where as coming into this environment, when interests rates have gone up and people are finding their loan repayments going up, to introduce this policy at this time could really have a very dramatic impact and one that is not positive.”
“It would not help owner-occupiers going forward.”
Click PLAY below to listen to the full interview: