The real estate industry has raised concerns over potential changes to negative gearing, following comments from Prime Minister Anthony Albanese. While the Prime Minister has since backtracked, the industry remains vigilant about this crucial policy.

The Real Estate Institute of Western Australia (REIWA) and the Real Estate Institute of Australia (REIA) have both strongly opposed any alterations to negative gearing. They argue that such changes would deter investment, exacerbate the already strained rental market, and ultimately harm housing affordability.

REIWA CEO Cath Hart emphasized the negative consequences of tampering with negative gearing:

• Reduced Investment and Rental Supply: Changes would discourage investors from entering or remaining in the market, leading to a decrease in rental properties available.
• Rising Rents: A reduction in rental supply would inevitably drive up rents, putting further financial pressure on tenants.
• Impact on Middle-Income Earners: Many investors are middle-income earners who rely on negative gearing to offset rental property expenses. Changes could have a significant impact on their financial situation.

REIA National President Leanne Pilkington echoed these concerns:

• Exacerbated Rental Market: Discouraging investment would worsen the already tight rental market, leading to rent increases of up to 12%.
• Fewer Housing Options: A reduction in rental property availability would leave renters with fewer choices, intensifying competition and driving up rents.
• Impact on Small Investors: Changes would particularly harm small investors, who rely on negative gearing to participate in the market.

Both organizations stressed the importance of maintaining a stable legislative and regulatory environment that supports and encourages investment in housing. They urged the government to focus on policies that promote investment and enhance housing affordability, rather than taking actions that could have detrimental consequences for the real estate market and renters.