{"id":20061,"date":"2018-02-01T01:00:53","date_gmt":"2018-01-31T14:00:53","guid":{"rendered":"https:\/\/www.realestatetalk.com.au\/?p=20061"},"modified":"2018-02-01T01:00:53","modified_gmt":"2018-01-31T14:00:53","slug":"stop-negative-talk-about-negative-gearing-brian-white","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/stop-negative-talk-about-negative-gearing-brian-white\/","title":{"rendered":"Stop negative talk about negative gearing \u2013 Brian White"},"content":{"rendered":"

Federal Labor is attacking negative gearing again with assertions about how it is responsible for growing property prices.\u00a0 Brian White<\/strong> joins us to set the record straight.
\nTranscript:<\/strong>
\nKevin:<\/strong>\u00a0 Here we go again, more talk about negative gearing and fiddling around the edges. We really need to address this as a very serious issue because at the end of the day, it just seems to me as if this is just a bit of political low-hanging fruit as a popular move for the Labor Party.
\nI was staggered to see some recent comments made by the Grattan Institute, which at the end of the day, I have to point out is really Kevin Rudd\u2019s $50 million think tank. It was quoted as saying about the Grattan Institute that it would be absolutely amazed if it could actually accommodate an opinion that\u2019s critical of the Labor Party, and this is absolute proof of it.
\nI want to get a little bit more comment on this issue from Brian White who is the chairman of the Ray White Group in Australasia.
\nBrian, thank you for your time.
\nBrian:<\/strong>\u00a0 Good morning, Kevin.
\nKevin:<\/strong>\u00a0 Brian, I\u2019m just wondering your comment. You were actually in the same story on the ABC. What are your comments about what the Grattan Institute is saying here?
\nBrian:<\/strong>\u00a0 The best contribution I can make to this debate is the experience that my company went through, and the industry, of course, went through back in 1987 when the Hawke government introduced the elimination of negative gearing.
\nAt that time, there was enormous buildup. All the research had said this was going to be good, that there would be minimal disruption, it was going to make everything so much more affordable, and so forth. So, I\u2019ve been through that experience, and it\u2019s not that wasn\u2019t long ago.
\nWhat I\u2019m finding disappointing at the moment is no one is actually going back and saying \u201cWhat did go wrong?\u201d because it was brought in with all of the fanfare and inside two years, it was abandoned by the same government. How many major policies that are brought in with fanfare and \u201cAren\u2019t we brave? Aren\u2019t we courageous? And aren\u2019t we doing a wonderful thing for the country?\u201d and then within a couple of years, they have to abandon it?
\nOne of the elements in this debate is there are far more people owning properties than not owning properties at the moment. There\u2019s a massive number of homeowners who don\u2019t live in Sydney and Melbourne where price growth has been quite constrained, even in quite a buoyant overall market.
\nThe psychology that came in in 1987\u2026 Is there now an attack on properties? Is property not going to be a good thing to invest in? And Kevin, what percentage of Australians see property as their core asset, their core financial structure? The terror that was going through in that 1987 period after this was introduced is just so memorable. It\u2019s probably the more memorable part of my entire career.
\nKevin:<\/strong>\u00a0 Like you, I\u2019m probably a little bit dumbfounded that the Conservative Party are not using this experience, not talking about it, because we have to learn from our past experiences.
\nBrian, I think the other point, too, is that many people think that negative gearing is there just to benefit the rich, wealthy landlords. Who are the main beneficiaries of negative gearing? Who is actually using it?
\nBrian:<\/strong>\u00a0 Once again, it\u2019s just a normal, average Australian. People go about their lives. They seek to maximize the opportunity to be able to comfortable in their retirement. The first ambition is ownership of a property and a home, and it\u2019s always been difficult.
\nI can remember when I was in my early twenties, \u201cHow could we afford to buy a home?\u201d It was one of the cheapest homes imaginable, and gradually, we were able to trade that. Many people think \u201cI should be able to buy my final home from day one.\u201d We\u2019ve never had that.
\nBut the thing is once people have got on top of their own home, their payments, and so forth, the potential then to buy an investment property and then have that work for them is so strong. The great majority of people who are involved in this negative gearing are the normal mom and dad. It\u2019s almost as if the negative gearing was introduced to encourage people to invest, encourage people to take ownership of their long-term financial needs.
\nKevin:<\/strong>\u00a0 I think another point, too, Brian is that yes, all of those things are very, very true, that this has encouraged people to invest. But it also is increasing the amount of stock that\u2019s available for people who want to rent or who need to rent.
\nThe question I would ask you is without investors, where are these properties going to come from? They\u2019re going to have to come from the government, and in my opinion, they do not have a good track record of providing rental accommodation.
\nBrian:<\/strong>\u00a0 Of course. When those properties are provided, they\u2019re often sub-standard, they\u2019re in locations that don\u2019t work for people. People are renting in suburbs where they need to be. They need to be either close to aging parents, a particular school, or a particular job. I think investors have done a great thing for our housing population. Eliminate that and pressure on rent is going to be massive. That was beginning to happen right back in 1987.
\nKevin:<\/strong>\u00a0 This is the part that dumbfounds me, too. Listening to the Grattan Institute in the ABC program, without negative gearing tax benefits, rents would have to rise \u2013 a natural consequence, isn\u2019t it?
\nBrian:<\/strong>\u00a0 Absolutely. The first thing that happened is that prices dropped, and you think \u201cIsn\u2019t that a good thing, more people are going to be able to acquire?\u201d But what we\u2019ve found is that first-home buyers, they were leaving the market even when properties became more affordable because they kept fearing the prices will keep dropping further and further.
\nOver my career, it has never been easy for people to own their first home, irrespective of prices. It\u2019s one of the great ambitions that individuals have and when they stick at it, it happens.
\nKevin:<\/strong>\u00a0 By itself, can tax changes solve Australia\u2019s problems with housing affordability, Brian?
\nBrian:<\/strong>\u00a0 No, I think Australia is blessed with the structure that we currently have. I don\u2019t understand why there\u2019s this obsession with \u201cWe have to make everything more affordable.\u201d Well, more affordable means dropped prices.
\nYou only have to remember the bravado and the confidence, and the \u201cLook at us\u201d that the Hawke government had when they introduced this policy, \u201cIsn\u2019t what we\u2019re doing wonderful for the country?\u201d and inside two years, they had abandoned it.
\nThe psychology of the whole thing was so strong, and it\u2019s the psychology of \u201cOwning property is probably not a good thing. We don\u2019t know when the next hit might come.\u201d There was a message out that we probably should steer clear of property.
\nWhen I interviewed the average Australian, no matter where they\u2019re living \u2013 in a capital city, in a regional city, or anywhere \u2013 fundamentally, their key pride possession is the property they\u2019re living in.
\nKevin:<\/strong>\u00a0 Let\u2019s hope those memories will stay with us, Brian, as we continue this debate, and hopefully, it won\u2019t go on for too much longer and they\u2019ll resist that temptation to trim around the edges. Thank you for your thoughts. They\u2019re well thought-out. I can hear the frustration in your voice, and I share that with you, Brian.
\nBrian White has been my guest. He\u2019s the chairman of the Ray White Group. Brian, thanks for your time.
\nBrian:<\/strong>\u00a0 Thank you, Kevin.<\/p>\n","protected":false},"excerpt":{"rendered":"

Federal Labor is attacking negative gearing again with assertions about how it is responsible for growing property prices.\u00a0 Brian White joins us to set the record straight. Transcript: Kevin:\u00a0 Here we go again, more talk about negative gearing and fiddling around the edges. We really…<\/p>\n","protected":false},"author":176692471,"featured_media":20062,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[34,10,11,13,36,22,25],"tags":[101],"class_list":["post-20061","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-finance-topic","category-kevin-turner-sponsored-channels","category-kevin-update","category-latest-story","category-property-investment-topic","category-research-topic","category-sponsored-channels","tag-podcast"],"yoast_head":"\nStop negative talk about negative gearing \u2013 Brian White - Realty Talk<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/channels.realty.com.au\/realtytalk\/stop-negative-talk-about-negative-gearing-brian-white\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Stop negative talk about negative gearing \u2013 Brian White - Realty Talk\" \/>\n<meta property=\"og:description\" content=\"Federal Labor is attacking negative gearing again with assertions about how it is responsible for growing property prices.\u00a0 Brian White joins us to set the record straight. 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