This is the most opinionated episode of Confessions of a Property Investor so far. Catherine Andrews and Michelle White from Chase Wealth Australia go straight at government policy, national debt and what both are doing to property investors, and they say up front that they are not softening it.
Underneath the politics is a history lesson worth having. Negative gearing was abolished once before, in 1985, and had to be reversed when fewer investment properties meant less rental supply and rents climbed. That mechanism has not changed. The conversation traces the same pattern through the recession of the early nineties, the GST years, the GFC that barely touched Australian residential property, and into the debt position the country carries now, which Catherine argues is why property investors keep being treated as the ones who can pay for it.
The second half is practical. Why Chase Wealth Australia pushes new dwellings rather than established ones, how depreciation, warranties and running costs actually stack up, and why a strategy has to pivot when the rules pivot. It closes on the clients who went ahead through COVID while everyone else waited: around 80 per cent of them are now paying their mortgages off, while the ones who waited two years came back to a market that had moved without them.
Yes. Catherine Andrews walks back to the mid 1980s, when negative gearing was restricted at the federal level and the restriction was reversed roughly two years later. That is the single most useful fact in the episode, because it turns an argument about what might happen into a question about what did happen. Anyone weighing the current discussion has a completed example to look at rather than only a forecast.
It runs in a chain, and the episode sets it out in order. Reduce the incentive to hold an investment property, and fewer investment properties are held. Fewer investment properties means less rental stock. Less rental stock against continued population growth means competition for what remains, and rents rise. The conclusion drawn is that a measure aimed at making housing cheaper to buy can make it more expensive to rent, which is why the 1980s change did not survive.
Because supply is a category, not a single number, and the categories behave differently. Michelle White makes the point that a national shortfall and a local shortfall are separate problems with separate causes, and that some states sit well behind others on the same measure. Treating the whole country as one market produces a single answer to a set of questions that do not share an answer.
A dwelling that exists but is not tenanted counts in one and not the other. The episode raises vacant dwellings specifically, because they sit inside the housing stock figure while contributing nothing to the rental pool. It is the gap between those two numbers that decides what a renter or a buyer actually encounters, and headline supply figures usually report the larger one.
Because the rate is a response to inflation, and spending feeds into inflation. The episode places rate movements at the end of that sequence rather than the start of it. The practical consequence for an investor is that a rate decision is a symptom to plan around rather than an event to predict, which is the same conclusion the interest rate episode reaches from the other direction.
Because it changes what a policy headline means. A proposal is not a law, a law is not permanent, and the last comparable measure was reversed. That does not make a change impossible, and it is not a reason to ignore one. It is a reason to hold the position through the announcement rather than act on the announcement, and to build a plan that survives the settings moving in either direction.
"If you abolish negative gearing and you abolish the perks of becoming a property investor, you then have less investment properties, which then causes low supply."
Catherine Andrews, 7:05
"It's not just as simple as looking at the supply component. It's about looking at the bigger picture."
Michelle White, 5:32
