Here is an interesting story from the AFR:
Labor has deleted substantial detail on its negative gearing and capital gains tax policies from its housing policy website.
The changed information comes less than a week after The Australian Financial Review revealed that Labor’s negative gearing could be overstatedby between $2.5 billion to $8 billion due to inaccurate assumptions on the level of investment in new housing stock.
To be clear – what the ALP don’t want us to see anymore is here.
What is particularly interesting is this segment.
Recall Chris Bowen has gotten into trouble with that particular statistic.
Looking at the Source for that graph I have been able to replicate it and update it.
So the ALP have been looking at housing finance data not individual purchase data. Okay – as a rough and ready proxy that would be fine in an academic study with heaps of qualifiers and robustness checks. But the ALP are doing tax policy.
So what have they done precisely? They divided the data for “Investment housing – Construction of dwellings for rent and resale” by the sum of “Investment housing – Purchase for rent or resale by individuals” and “Investment housing – Purchase for rent or resale by others”. On the assumption that all investment properties were homogeneous that might be useful information.
That just tells us that Landlords (as a business class) tend not to buy off the plan – not surprising, that is quite risky. I suspect it would be quite difficult to get a loan to do that for a small unincorporated business.
But let’s have a look at all new construction housing finance data. In the graph I show the data for all construction housing finance data and then investment construction housing finance data.
It seems to me – eyeballing the graph – that the investment construction housing finance data has been fairly stable over time. Since about 2000-01 the gap between the two series has been stable at about a third. Unsurprising given that the home ownership rate in Australia is about two-thirds.