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He said that it would be more effective to means-test investor tax subsidies and cap the number of properties that can be negatively geared.
Mr Driscoll also said that Labor has erred in suggesting that all investors are higher-income earners.
“I’m hearing from agents and brokers across markets popular with first home buyers that approximately 30–35 per cent are rentvesting,” the CEO said.
“They are often purchasing a property, living in it for six to 12 months, then putting it on the rental market.”
He said that Labor is trying to help middle and working-class families.
“But let’s not forget that many nurses, teachers and policemen are also purchasing investment properties; they make up the investor profile, too. The opposition’s proposed policy could inadvertently disadvantage many of the people it is trying to help.”
Instead, Mr Driscoll said that there are more effective strategies that would appease investors and nurture first home buyers.
“From what I can tell, this policy is a regurgitation of Labor’s previous election manifesto. What puzzles me most is that if it didn’t curry favour in the lead-up to the last election when investors made up the majority of the market, then how is it going to garner support now that their numbers have decreased considerably?”
He said that cooling house prices shows that the government’s macro-prudential measures are working, but he agreed that more could still be done.
“Instead of limiting negative gearing, as Labor has suggested, Aussies that want to claim tax subsidies could be means-tested.
“This would ensure that higher-income earners are not benefitting the most, and tip the balance in favour of those that need the subsidies the most. Alternatively, capping the volume of properties an investor can negatively gear will reduce the number of negatively geared properties, without limiting it to a subset of homes.”
He said that any existing properties should be grandfathered.
“Labor has got it right to grandfather existing investment properties, a policy I strongly stand by. Without this, it could lead to property Armageddon.”
[Related: The top 10 Australian cities that Chinese buyers are flocking to]
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