The Property Investment Professionals of Australia (PIPA) welcomes the federal government’s well-considered measures to addressing housing supply and demand side issues as revealed in the 2017-18 Federal Budget.
As the peak body for the property investment industry, PIPA has long campaigned for greater education around property investment as well as regulation of property investment advice and remains dedicated to supporting a healthy, sustainable property investment industry.
PIPA chair Ben Kingsley said the association welcomed the federal government’s decision to continue the sensible approach to negative gearing and retain capital gains tax discounts for Australians.
“We think it is an improving and sensible approach to stabilise the housing market. These measures also give confidence to people who invest in property to provide rental housing and to their family in terms of future financial wellbeing,” Mr Kingsley said.
While the government avoided any wholesale changes to negative gearing, Mr Kingsley said the decision to tighten some negative gearing deductions had the potential to create confusion among property investors.
“We are not completely happy with all aspects of this budget, specifically in regard to travel costs and depreciation deduction changes. We think the government needs to provide more details on this.
“Investors factor in wear and tear costs at the time of purchase to cover the replacement of these plant and equipment items. Given each item claimed is annualised based on age, we don’t understand the government’s concerns around possible additional deductions and double-dipping if the property is later sold,” Mr Kingsley said.
Mr Kingsley said that while the budget has unveiled measures to continually support infrastructure across the country, more investment was needed in transport to encourage affordable housing supply.
“You will never be able to make inner-city value less expensive due to strong demand versus limited supply. The fast-train concept could help affordability for generations to come given public transport remains the best way to improve the accessibility of satellite cities to major centres,” he said.
He added that property investment advice should also be regulated to tackle housing affordability issues.
“This would remove spruikers and speculators from the market. Educating investors about the real and current risks of property investment and ensuring they are not pressured into poor investments would help to moderate demand and avoid budding investors getting their hands burned,” he said.
Staff Reporter,The Bull.com.au, 10 May 2017