{"id":8252,"date":"2016-06-16T10:00:42","date_gmt":"2016-06-16T00:00:42","guid":{"rendered":"http:\/\/realestatetalk.com.au\/?p=8252"},"modified":"2016-06-16T10:00:42","modified_gmt":"2016-06-16T00:00:42","slug":"john-symond-sounds-off-over-negative-gearing","status":"publish","type":"post","link":"https:\/\/channels.realty.com.au\/realtytalk\/john-symond-sounds-off-over-negative-gearing\/","title":{"rendered":"John Symond sounds off over negative gearing"},"content":{"rendered":"

John Symond<\/strong> from Aussie Home Loans takes a big stick to all politicians over the debate on negative gearing.
\n 
\nTranscript:<\/strong>
\nKevin:<\/b> \u00a0Interested to read during the week that John Symond, founder and Executive Chairman of Aussie Home Loans, made the comment that property prices would fall 10% to 20% under Labor government. John joins me.
\nJohn, thank you for your time. Is this all around negative gearing?
\nJohn:<\/b> \u00a0Yes, it\u2019s around the proposed policy of the Labor government, or Labor, if they were to form a government, to effectively abolish negative gearing on existing properties going forward, so if you were to buy a property, you won\u2019t be able to claim negative gearing benefits.
\nI\u2019ve made it very clear that totally hitting it on the head is insane and can cause property falls. I\u2019ve previously said that there are improvements can be made. Improvements can be made to anything, including negative gearing, but there\u2019s a big difference between making improvements and abolishing it. Of course, my concern is Labor is looking at abolishing it, not improving it.
\nKevin:<\/b>\u00a0 I guess what concerns me and what concerns a lot of people is the lack of research around this issue and really getting an understanding about it, John. Your figures of 10% to 20%, where do they come from?
\nJohn:<\/b>\u00a0 Look, that\u2019s anecdotal, Kevin. Who knows? All I can say is I\u2019ve been in this business of property and home loans for 50 years. I\u2019ve seen governments come and go. I\u2019ve seen a lot of good policies. I\u2019ve seen a lot of crazy policies. I have a reasonably good knowledge of housing, and it is my opinion \u2013 and my opinion only \u2013 that if Labor was to abolish negative gearing going forward, you would create an oversupply of properties hitting the market, an undersupply of buyers, and that can only mean one thing for properties, and that\u2019s properties dropping value on existing properties.
\nFor the government to say, \u201cOh, but you\u2019ll get negative gearing benefits on new properties,\u201d well, a day after you settle that new property, it becomes an established property, and who\u2019s going to buy that property when you don\u2019t get any negative gearing benefits going forward?
\nI just feel very frustrated when politicians don\u2019t consult industry players who might know more than they do and might know more than academics who study statistics only, so I\u2019m very critical about it. I\u2019m not talking up my own game, because I\u2019m someone who always says what I really do believe in, and I believe that this is fundamentally potentially a disastrous policy if ever it was implemented.
\nKevin:<\/b>\u00a0 Yes, they seem to be treating it very much like a black-and-white issue: it\u2019s either there or it\u2019s not. You mentioned earlier in our chat that maybe they should do some enhancements around negative gearing. What would you recommend they look at, John?
\nJohn:<\/b>\u00a0 Well, they could possibly put a ceiling cap. Look, you see, probably 80% of investors are PAYG, hard-working moms or dads earning less than $80,000 a year. If they want to protect them that\u2019s fine, but put a ceiling <\/b>limit where you might not be able to claim above a certain dollar threshold, and anything over that goes in as a capital cost, so that in the future if ever you sell the property and if you sell it for a profit, you can then add those capital costs to the cost base.
\nThere are many ways you can improve it, and that\u2019s what I was saying when I made comments on Q&A three years ago, but to go and totally abolish it just makes no sense whatsoever. Labor says, \u201cWe want to help first-home buyers.\u201d No one wants to help first-home buyers better than I do. We all want our kids to be able to go out there and achieve the great Australian dream of home ownership.
\nBut you don\u2019t go and smash the other 80% and hurt those, particularly, as I said, most of them are moms and dads just doing their best to build up a nest egg for their later years in retirement.
\nKevin:<\/b>\u00a0 There is a school of thought as well that if Labor do, in fact, win government and implement their policy that it will likely have the reverse effect where there will be a rush of investors wanting to get in before negative gearing does actually shut down. In fact, there are some agents around Australia reporting that that is already happening, John.
\nJohn:<\/b>\u00a0 Well, that can happen, as well. Again, any surge \u2013 up or down \u2013 is not a good thing to ensure we have a healthy housing market. We have to remember the housing industry has underpinned the Australian economy the last four years while we\u2019re transitioning from a commodities country to a non-commodities country, and why play with fire? Why take a huge risk to destabilize the one thing that\u2019s propping up the Australian economy?
\nAgain, I can\u2019t see any logic, and it\u2019s crazy, and whether this policy came from Liberals, Greens, Labor, I don\u2019t care; I would still make those comments, because I think it\u2019s crazy and it\u2019s dangerous and it will hurt all Australians.
\nKevin:<\/b>\u00a0 Yes, once again, it gets back to what you said earlier, too: they should really be consulting with the industry, people like yourself, and it\u2019s interesting to see that real estate agents around Australia have actually banded together, as well, to come out and also echo the concerns that you\u2019ve just said.
\nJohn:<\/b>\u00a0 Let\u2019s hope that Labor wakes up to themselves, do some homework, and as you say, talk to the industry, talk to property developers, real estate agents, real estate industry, lenders, banks.
\nAll they have to do is talk to banks and say, \u201cWell, how will this impact bank balance sheets?\u201d You have big Australian banks, half their balance sheet is housing loans. If all of a sudden the value of their balance sheets drop by X percent, the ratings agencies aren\u2019t going to be too happy, and that might cause banks to lend less money. Is that what we want?
\nThere are always unintended consequences. I\u2019m not suggesting for one minute Labor is going out with not honorable intentions; what I\u2019m saying is they haven\u2019t done their homework and it could have catastrophic repercussions, and they have to be very, very careful, particularly when the world globally is in a very uncertain state. We\u2019re hanging onto the Australian economy, doing the best we can. Don\u2019t do anything so extreme to tip it over. That\u2019s my concern.
\nKevin:<\/b>\u00a0 John, great talking to you. Thank you very much for your time today.
\nJohn:<\/b>\u00a0 Good, Kevin.
\nKevin:<\/b>\u00a0 Thank you.<\/p>\n","protected":false},"excerpt":{"rendered":"

John Symond from Aussie Home Loans takes a big stick to all politicians over the debate on negative gearing.   Transcript: Kevin: \u00a0Interested to read during the week that John Symond, founder and Executive Chairman of Aussie Home Loans, made the comment that property prices…<\/p>\n","protected":false},"author":176692471,"featured_media":8253,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[32,34,10,11,13,25,27],"tags":[101],"class_list":["post-8252","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-buying-a-property-topic","category-finance-topic","category-kevin-turner-sponsored-channels","category-kevin-update","category-latest-story","category-sponsored-channels","category-trends-topic","tag-podcast"],"yoast_head":"\nJohn Symond sounds off over negative gearing - 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\/john-symond-sounds-off-over-negative-gearing\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"John Symond sounds off over negative gearing - 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