A new report commissioned by the Australian Institute of Superannuation Trustees (AIST) indicates there is strong support for changing current negative gearing policies, with support highest among non-investors.
Conducted by Essential Media, the report’s data was drawn from a mixture of family interviews and an online survey completed by 649 respondents (including 259 who owned negatively geared investment property).
According to respondents, the primary motivation for investing in property is retirement planning, as well as the belief that the super and pension alone cannot support a comfortable retirement.
Amongst property investors, 52% believe that an investment property is a better way to save for retirement than superannuation. Of those without an investment property, there’s a more favourable view of superannuation.
“Only 35% believe that investment properties are superior to superannuation,” AIST said. “Among the interviews conducted with negative gearers, there was a near-uniform view that property is a lower risk and higher yield investment than superannuation.”
The majority (79%) of property investors with children treated housing as an asset that could be passed down to their children. Sixty-three percent said worries about their children getting into the housing market was an important driver for investing in property.
“The interviews followed a similar pattern, with investors commonly suggesting that, while they intend for their children to benefit from their investments, this may only be as an inheritance,” AIST said.
More than half (55%) of non-investors said they would support changing negative gearing even if it meant house prices would drop slightly. In contrast, only 35% of investors supported such changes.
“The interviews revealed a spectrum of views on negative gearing policy, from those who supported restricting or abolishing negative gearing, to those who staunchly opposed any change to negative gearing whatsoever,” AIST said.
“Those who supported changing negative gearing policy felt that it would make it easier for their children to enter the housing market in the future, while those who opposed tended to argue that it would have adverse consequences for the entire housing market and broader economy (rather than simply their own personal financial situation).”
