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Property and wealth creation continue to be intertwined with one another among Aussies.
For Gen Zs who have grown up surrounded by this mindset, these opinions are even more prevalent.
A recent report from Great Southern Bank revealed that 28 per cent of home owners consider their home as a source of income. This rises to 58 per cent of Gen Z home owners.
Among this cohort, 24 per cent would like to turn their home into an investment property, 19 per cent would rent out a room to increase cash flow, and 16 per cent would like to run a business out of their home.
This research brings forward the constant debate of the ethics involving property as a source of wealth.
Negative gearing continually enters these discussions. The public is divided on whether this policy is a positive or negative for the housing market.
Speaking to Broker Daily earlier this year, Dr Diaswati Mardiasmo, chief economist at PRD Real Estate, said that negative gearing has become “ingrained” in the way Australians build wealth.
Any changes would “require a mindset change”, she said, and any plans to abolish it would generate passionate push-back from the public. The main argument for keeping negative gearing in place is the consequence of pushing out investors, creating a deficit of rental properties.
Both Labor and Coalition have made it clear that negative gearing won’t be reformed, while the Australian Council of Trade Unions (ACTU) and the Greens have called for restrictions.
The recent economic reform roundtable discussed negative gearing, with the ACTU’s recommendations for reform including limiting negative gearing and the capital gains tax benefits of housing to just one investment property.
Attendees of the roundtable reportedly disputed over negative gearing reform, with the tax portion of the event creating more division than any other.
Among those present at the roundtable, the main representative for housing-related issues was Susan Lloyd-Hurwitz, National Housing Supply and Affordability Council chairwoman.
Last year, at a National Press Club address, she identified seven constraints that are hurting supply:
- Limited suitable land.
- Complex planning systems.
- Under-investment in social housing.
- Financing constraints.
- Inefficient use of existing stock.
- Low construction productivity.
- Insufficient construction capacity.
Interestingly, negative gearing and wider tax policy is absent from the list.
The debate, pitting the desire for individual wealth building against concerns of housing market fairness and inequality, remains a potent political stalemate with no clear resolution in sight.
[Related: Why politicians won’t touch negative gearing]
