It’s a difficult housing market for both renters and buyers.
And as with every issue that needs to be weaponised for political gain, there must be a scapegoat.
The Greens have decided that’s landlords – dirty, money-grubbing, property-hoarding fat cats who rent homes out for ever-increasing prices.
Small-time property investor Ann-Maree Eastman was in the Q&A audience on Monday night and asked the panel why landlords are so demonised when she is just trying to fund her retirement and has no issue with her tenants.
She and husband Philip own four properties.
In response, Greens MP Max Chandler-Mather essentially told her to suck it up, said negative gearing was unfair and that “if renters lose they are sleeping in their car on the street” but “if a property investor has to sell their home, that might be bad but they get a huge sale price out of that home”.
It might be easy to demonise landlords who you assume are locking you out of the housing market. But it’s not that simple.
I am both a landlord and a tenant. I bought my first home and moved interstate a year later for work, so that property is tenanted and I rent where I live.
My property is negatively geared. I am not turning a monetary profit, particularly after interest rates rose so sharply.
For the uninitiated, negative gearing simply means writing off losses on property against taxable income. Writing off loss on tax is entirely legal and common practice elsewhere in the business world.
For me, negative gearing means I don’t have to sell my first home and sole property and it ensures there’s a house available in the rental market.
I am not a property mogul hoarding real estate – and nor are most landlords.
About 70 per cent of landlords in Australia rent out just one property. They’re often referred to as “mum and dad investors” – ordinary Australians who have saved up to buy an investment property that will hopefully help fund their retirement.
They’re not greedy and they’re not rich. They’ve made modest investments.
Less than one per cent of landlords own six or more properties.
So cut the nonsense that landlords are knocking back bottles of Grange every night.
Abolishing negative gearing would, of course, force many of these small-time investors to sell their properties – and some think that’s great.
But who do they think will buy those properties?
Tenants already living hand to mouth won’t just be able to turn around and magically scrounge together a deposit because I’ve been forced to sell my lone house.
A portion would be sold to people who have already saved up to enter the property market. But most, I am sure, would be snapped up by much richer investors who can afford to soak up the short-term loss in the hope of long-term capital gains.
So you’d simply concentrate the rental market even further, putting even more properties in the hands of corporate sharks and big-time owners. Yay for housing equality – in this case, equally shared misery.
The real issue is not the vast number of landlords with one property – it’s a lack of housing supply and mass immigration that keeps putting pressure on the market.
The more rental properties you have available the cheaper rent is because there’s more competition in the market. More people vying for fewer properties in an inflated economy drives rents up by pure market forces.
That has nothing to do with landlords.
Caleb Bond is a Sydney-based commentator and host of The Late Debate on Sky News Australia.
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