Aย reportย released last week by the Australian Housing and Urban Research Institute (AHURI)ย joins others in confirming that negative gearing is not responsible for high home prices.
The report undertakes an in-depth review of the private rental market in Australia and nine other comparable countries, considering tax and finance settings, demand and supply and regulation of landlords and tenants.
Property Council Chief Executive Ken Morrison said the report adds to the growing body of credible research that dispels common myths around negative gearing.
โWe welcome this new AHURI report which finds that Australiaโs negative gearing settings are neither out of kilter with those of other comparable countries, nor are they the driver of escalating house prices across much of Australia,โ Mr Morrison said.
โAHURIโs peer-reviewed report compares Australia and Germany, which has the same negative gearing tax settings. However, Germanyโs housing supply is more closely matched with its lower population growth.
โThis comparison highlights the need for a lot more supply-side policy levers in Australia to ensure our supply matches demand.
โThe AHURI report underscores the requirement for more variety in Australiaโs rental stock, including the role institutional investment can play. This matches the Property Councilโs calls for the government to support the emergence of a build-to-rent sector in Australia.
โAHURIโs inquiry also flags the important role the community housing sector plays in providing and supporting social and affordable housing, and this is an important element in overall housing policy settings.โ
The AHURI report recommends that policy settings and any future strategy for rental markets should consider not only tax settings, but also the availability of finance, population and other demand levers, and the variety and volume of supply, as the review of negative gearing shows this one setting of itself does not drive overall housing outcomes.