The wealthy investor myth | The Real Estate Wrap with Leanne Pilkington

May 6, 2019 |
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Welcome to this week’s Real Estate Wrap with Leanne Pilkington, Managing Director of Laing+Simmons and President of the REINSW. ATO data debunks the myth that negative gearing is for wealthy investors, showing almost 80% of taxpayers claiming a deduction for property earn less than $80,000 per annum. It also shows the majority of investors own one property. Less than 4% of investors have more than three.

Download The Real Estate Wrap for this week by clicking here.


Hi everyone, Leanne Pilkington here with the Real Estate Wrap for Monday, the 6th of May. Week commencing May 6.

We had 535 properties go to auction on Saturday with a 66..6 per cent prelim clearance rate, which is actually a lot higher than what we’ve been saying in previous weeks and even months. So that’s really an interesting reflection on where the market’s at right now.

But the most important thing we need to be thinking about right now is we are less than two weeks away from the election on May 18, and we need to be very, very clear on the impact that some of these policies that the opposition are talking about and going to have on real estate.

We’re being told that property investors are very wealthy people. The reality of the situation is that 80 per cent – and this is data from the ATO – 80 per cent of investors actually earn less than $80,000 a year. So certainly not wealthy people.

The other interesting thing is only 4 per cent of property investors around the country actually own more than three rental properties. So it’s a very different picture than the one that we’re being told.

And the other really interesting thing is, because they know if they take away negative gearing, they understand that there won’t be as many people investing in property. So do you know what they’re doing instead?

They’re going to encourage the big end of town to actually build properties to rent and they’re going to double the tax incentive from 15 per cent to 30 per cent for the big end of town to build the rental properties to make up the shortfall that’s going to happen when the normal mum-and-dad investors get out of the market.

It absolutely seems crazy to me. We know what will happen is that rental prices will go up but the actual property prices are likely to go down and that is the last thing we need when we are already seeing reducing prices around the country. It’s not just here in Sydney.

I would encourage all of you to actually investigate and delve a little bit deeper into the policies that we’re being told so you actually understand what might happen with those if they do get implemented.

Anyway enough for me. Lots of more information on the link. Click through and I’ll see you next week.

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