New data from the Australian Bureau of Statistics shows that the percentage of properties bought by first home buyers in January was 17.9%, which is higher than the 10 year average.
This is great news and highlights that the regulatory and government policy changes over the last two to three years have taken affect, making it easier for first time buyers to get into the market.
The current cost to purchase property is in line with the long term average when you look at the income to interest ratio.
Our partner in education and our upcoming Podcast, Peter the Property Professor Koulizos, waxes lyrical on why this underlines the risks associated with the Labor tax policy on negative gearing.
He contends that the flow on negative wealth effect to all existing home owners could have a disastrous impact to consumer spending and the economy.
In his view, there are other ways to assist First Home Buyers entering the market that doesn’t undermine all existing home owner’s wealth position in their largest asset!
This is a complex and vexed issue with many layers. I largely agree with Peter’s pontifications.
However, the framework for an amended policy to negative gearing could be more nuanced. I think, limiting the number of properties that can be negatively geared has merit.
I’ll share more detailed thoughts with you on why soon!
For further insights into the Chairman of the Property Investment Professionals of Australia views, that’s our good friend Peter.