Facts About Australian Housing And Negative Gearing

Table of Contents

1. Preamble
2. Stability and reliability create sustainability
3. What’s the plan?
4. Case Study (negative gearing and capital gains tax)
5. What is ‘negative gearing’?
6. What is ‘capital gains tax’?
7. Does negative gearing cause property prices to increase?
8. History of negative gearing
9. Is it a special policy for property investors?
10. How many properties are ‘negative’ versus ‘positively’ geared?
11. Who are Australia’s property investors?
12. What does negative gearing cost Australia?
13. Global housing rankings
14. About the Author

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Preamble

Australia has arguably the best living standards in the world. That said, 1 in every 3 Australian households have depended on rental accommodation throughout the 70-years subsequent to the 1950’s.

That ratio is highly unlikely to (ever) get any better than that.

Governments fund just 300,000 properties in the national rental pool, meaning that 91 percent of Australia’s 3,142,378 rented homes (2021) are funded by the private sector.

1 in 6 people in the workforce are property investors.

Collectively, 2.45 million Australian property investors fund homes for 8.5 million people.

These rental suppliers are everyday Aussies.

According to the latest available government statistics, 67 percent of property investors in the 2020-21 financial year had a taxable income of less than $100,000.

24 percent of these everyday Aussies are aged 40 or less.

For much of the last decade, 60 percent of properties in the national rental pool produced an annual operating loss of $5,000 to $10,000 per year.

The other 40 percent produced a modest annual profit of (say) $3,000 per year, and the owners of those properties paid tax on their profit.

In 2022/23 and 2023/24, operating costs increased significantly more than rental incomes. It is estimated that 70 percent of properties in the national rental pool are now producing annual operating losses.

A standard house in most locations across Australia now has a before tax cost to the landlord of between $25,000 and $40,000 per year. Read that again!

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A rental supplier’s ability to continue to offset an operating loss against personal wages (commonly referred to as ‘negative gearing’) typically reduces the size of their operating loss by about a third.

Anyone who thinks people are ‘attracted’ to absorbing an extra household budget expense of between $16,000 and $26,000 per year is a financially illiterate fool.

The pressure being absorbed by rental suppliers is a serious risk to an already shallow national rental pool.

Moreover, suggestions from some segments of society that ‘negative gearing costs the government money’ is ignorant to the truth.

This publication illustrates that the ‘average’ property investor pays $1.7 million more tax than the ‘average’ tenant.

In addition to the $100’s billions annual income tax paid by rental suppliers, property investors pay $45 billion per year (and growing) in property-related taxes. That includes capital gains tax, land tax, stamp duty and local government tax (city council rates).

For perspective, $45 billion covers 75 percent of the $60 billion annual cost for governments to run Australia’s entire education system (schooling).

You’re welcome!

The financial discipline of these goal-driven people is to pursue a lifestyle which does not depend on the taxpayer purse.

One person’s aspiration to purchase their first home is no more (or less) important than another’s aspiration to upgrade their home or to invest in their future.
A healthy society is one which rewards effort, that supports all aspirations.

Of the Australians who are currently aged 65 or more, less than 3 out of 10 have actually achieved financial independence.

The $51 billion of taxpayer funds spent to provide aged pensions for 2.6 million people for just one (1) year is sufficient to fund the combined sum of Australia’s 3 biggest infrastructure projects of the last 50-years – the Western Sydney airport ($10 billion), the Inland Rail Project ($30 billion) and Snowy Hydro ($10 billion).

The consequences of a system which fails to acknowledge the importance of financial literacy are significant.

If not for the 2.45 million everyday Aussies investing in their future and providing rental accommodation, governments would need to find $2 trillion to become the ‘replacement supplier’ (or landlord). That is equivalent to the cost of 740x brand new Gabba stadiums.

Good luck with that!

The government would also need to fund an estimated $10 billion per year to cover the shortfall between annual rents and the operating expenses associated with providing rental accommodation.

That’s as much money as what the federal government spends each year on infrastructure projects such as hospitals, highways, airports and rail.

Stability and reliability create sustainability

Those who supply rental housing are worthy of as much respect and support as those who supply hospitals and schools.

Over the last decade, that respect and support has been non-existent from all 3-levels of government.

For sufficient and reliable supply of rental accommodation to be delivered year-after-year, stable and reliable policy support is required in the following areas:

• policies relating to fundamental asset ownership controls (rental legislation and city council policies),
• costs in the form of taxes to acquire, retain and sell property (property tax policies),
• housing finance which acknowledges the RBA’s admission that residential investor credit is lower risk and higher quality than personal credit (credit policy), and
• operating costs of all types of income-producing assets being treated equally, including the ability to offset annual losses from one asset against other income sources (income tax policy).

Today’s horrible rental market is a creation of no respect and no support.

‘Exhibit A’ (below) is undeniable.

For the rental market to return to equilibrium in 2024, Australia would need to miraculously add circa 200,000 homes to the rental pool.

Plus, another 70,000 extra rental homes must be added to the pool every year to keep pace with growing demand.

Generations of historical evidence suggests governments will be flat out supplying more than 5 to 7 percent of what’s needed.

Australia’s housing system will always depend almost entirely on the private sector.

While politicians are good at standing on podiums and pretending to have done something to improve a situation, the official statistics confirm that the 300,000 rental properties collectively owned by state and federal governments in 2021 was the same volume as way back in 1976.

Over the 45-year period from 1976 to 2021, Australia’s population increased by 10 million, the national housing stock increased by 6.25 million, the homeownership rate held firm at 70 percent, but governments failed to add any extra supply to the rental pool.

If that does not qualify for the definition of ‘useless’, I don’t know what does.

So, what’s the plan?

When the federal and all state governments convened for their first talkfest for the National Housing Accord in October 2022, they came out with all sorts of grandiose numbers and promises.

Those of us who spent time to scratch beneath the surface understand that the ‘plan’ to build 1.2 million homes in 5-years is nothing more than a number on a chalkboard.

Pushing their rhetoric aside, the federal and state governments collectively will spend circa $4 billion per year for a grand total of about 8,000 extra homes per year.

Whoopee do!

The indisputable facts are that federal and state governments do not build homes, they do not provide rental supply for tenants, and they do not support private sector rental suppliers.

Other than tell lies and play games, the only thing that governments really do is make it harder for everyone (first home buyers, upgraders, investors and tenants) by taxing the bejesus out of housing to the tune of $100 billion per year (and growing).

Governments must stop pretending. Above all, stop treating housing as if it were a poker machine that never stops ringing.

Now, which poison do you choose?

Option 1:

Governments assume the role of landlord to 8.5 million people. That means finding $2 trillion to purchase the entire rental pool from the private sector, plus an additional $10 billion per year to cover operating losses.

Option 2:

Governments swiftly turn all tenants into homeowners. That would require ‘gifting’ tenants the properties at an expense to taxpayers of $2 trillion. Or governments fill tenant’s boots with cash so that they can satisfy deposit hurdles, plus waive the stamp duty barrier, and flex their muscle to force banks to approve the 3 million home loans. Simples!

Option 3:

Governments start behaving responsibly and show gratitude for the incredibly important contribution that everyday Aussie property investors make to society. That means encouraging aspirational behaviour and channelling the important post-war core values which propelled Modern Australia into a globally admired country. Sadly, those core values have been increasingly neglected over the last 10+ years.

Case Study (negative gearing, CGT, investor, tenant)

Ian (a 45yo teacher) and Sarah (a 45yo nurse) made the life choice of being a ‘lifter’ in society.

They each earn a gross annual wage of $100,000 (^*).

In 2024, as part of a long-term goal to one day retire without being reliant on a miserly taxpayer-funded aged pension, they decided to use $80,000 of their post-tax savings to purchase an investment property worth $800,000.

Their investment property was rented at the 2024 market rate of $560pw for 48 weeks of the financial year.

After paying all operating expenses, including loan interest at the rate of 6 percent, the property produced a net loss in each of the first 19-years (starting at $26,500 in Year 1).

Ian and Sarah absorbed each annual loss on the rental property.

As with every other owner of an income-producing asset, they declared 100 percent of their income, they claimed all expenses, and they offset the net loss against the personal wage that they earned (commonly referred to as ‘negative gearing’).

On a year-to-year basis, the large pre-tax loss of $26,476 in year 1 (scaled down to a $4,893 loss in year 17) is reduced to a more manageable, although still significant, $20,500 in year 1 ($4,700 loss in year 17).

20-years after buying the property, Ian and Sarah enter retirement and decide to sell their investment property.

The sale price of $2.56 million equates to an average annual capital growth rate of 6 percent, which is consistent with a typical property over the previous 20-years.

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The capital growth of $1.76 million (less transaction costs) triggers a capital gains tax.

The choice to live life as a ‘lifter’ as opposed to a ‘leaner’ resulted in Ian and Sarah enjoying 20-years of retirement life without putting their hand out for a taxpayer-funded pension.

Below is a back-of-the-beer-coaster calculation of Ian and Sarah’s tax contribution over the 40-years in this scenario (20-years in the workforce, followed by 20-years of retirement).

The comparison is that of a couple with the same wage, but they made different choices, they did not save, they did not invest, they depend on others (aka ‘leaners’):

Notes:
^* $100,000 wage for each person, increasing by 3% per year
^ $1,000 land tax, increasing by 6% per year
# $2,500 council rates, increasing by 3% per year
^^ $2,400 depreciation claimed in year 1, reducing by 5% per year
** includes negative gearing benefit
+ $1,650pf aged pension, increasing by 3% per year

The life choice of Ian and Sarah (a ‘lifter’) provided them with a better-quality retirement lifestyle, they contributed $1,735,025 more tax than the ‘leaner’.

Ian and Sarah also prevented the government having to use taxpayer funds to supply the community with the same rental property.

Incredibly, ABS data confirms that the principal occupant of 1.25 million households in 2020 (13 percent of Australia) were people aged 35 to 54 years who still depended on rental accommodation.

The obvious question regarding this large cohort is if they have not acquired homeownership after spending between 18 and 36 years in the workforce, when will they get it all together?

While everyone is aware of the various challenges to get the first foot on the property ladder, there were 1,074,200 first home buyers who had a strong enough will to find a way during the 10-years ending 2023.

And there were 538,198 Australians aged 39 or younger in 2021 who had demonstrated their ‘lifter’ outlook on life and already become property investors.

What is negative gearing?

Dating back to before Australian Federation (1901), tax laws have required owners of all types of income-producing assets to declare all income while also being eligible to claim all expenses.

If an Individual’s net annual trading result is positive, the asset owner pays tax on the profit.

If the asset produces an annual net loss, the individual/s may offset the loss against other income (such as personal wages).

In real estate parlance, the term ‘negative gearing’ started to get commonly thrown around when a large portion of rental properties began running at an annual loss (negative), largely due to sizeable interest expenses (gearing).

The tax policies for individuals who invest in the provision of rental accommodation are the same for individuals in all other business types (suppliers of transport, food, fashion, health services, tradespeople, etc).

Any proposal to change tax policy must not discriminate among occupation types and must carefully consider the broader, knock-on consequences of policy change, including diminished investor participation, tightening vacancy rates, distressed tenants and economic fractures.

Blind Freddy can see that Australia has a dire shortage of suppliers of all sorts of services, especially rental accommodation providers.

Lots of support, encouragement and incentives is required.

If the currency of choice for policymakers was ‘carrots’ as opposed to ‘sticks’, there would never have been a shortage of suppliers.

What is capital gains tax?

A capital gains tax (CGT) event is triggered when an income-producing asset is sold.

This includes general businesses, a rental accommodation business – investment property – and shares in a business.

The sale of a family home is exempt from CGT.

According to the latest statistics, the federal government collected $27 billion capital gains tax from the sale of real estate assets in 2020-21.

That is more than double the amount of money which the federal government invests each year on new infrastructure projects.

It is hypocritical for anyone to suggest that investors are somehow ‘advantaged’ by CGT provisions. And it takes a vicious person to suggest that CGT should be increased (refer to Ian and Sarah Case Study).

The globally admired ‘Modern Australia’ was born out of a post-war embracement of a free economy, encouraging people to have financial aspirations, to save, and to invest as much of their after-tax income as possible.

Whether investing their savings into a business or a variety of other income-producing assets, including real estate, chasing dreams creates positive energy, produces more opportunities for the community and reduces society’s reliance on taxpayer-funded welfare support.

In one of his many famous speeches, Australia’s longest serving Prime Minister, Sir Robert Menzies, described two types of attitudes – the ‘lifters’ (aspirants) and the ‘leaners’ (those who take from society).

At its core, Modern Australia was developed through a strong spirit based on goal setting, personal discipline, work ethic and chasing dreams.

Those who are prepared to take an educated risk with their own capital create potential for the longer-term reward of the value of their capital growing (capital gain). And they contribute to society.

That ‘was’ the Modern Australia way.

Effective from 20 September 1985, and wholly and solely motivated by revenue raising, the Hawke government introduced a new tax on gains realised from selling income-producing assets, which included rental properties.

As expected, many people were opposed to the new tax. Criticism at the time included:

• setting a poor example to society by punishing people for exercising financial discipline,
• creating a shift to inward-looking decisions, such as redirecting money into creating more elaborate family homes as opposed to outward-looking investing into one’s future and assets which other members of the community benefit from (job creating businesses and rental properties),
• the longer-term consequences of fewer people becoming financially independent, and
• the economic opportunity cost from less private sector investment in businesses and real estate.

In 1999, the Howard government streamlined the CGT calculation method by getting rid of the initial (very messy) indexation adjustment for inflationary pressures.

There was also a desire to discourage people from participating in short-term property flipping, so the 1999 legislation resulted in people who sold an asset after less than 12-months of buying it being charged CGT at twice the rate of those who held an asset for more than a year.

There are some people who (selectively) spin the spirit of the 50 percent ‘discount’ to imply that property investors are getting preferential treatment. Only a vicious ‘leaner’ who is not subjected to paying CGT could possibly suggest that an aspirational ‘lifter’ should be subjected to an even bigger CGT than the existing 6-figure sum.

CGT is a ridiculously restrictive tax. For the same reasons that CGT was criticised in 1985, serious consideration must be given to significantly reducing it, not increasing it.

Does negative gearing cause property prices to increase?

As certain as sunshine and rain every year, the value of a standard house will continue to increase from one decade to the next, with or without negative gearing.

When the national population was 3.7 million in 1900, before colonies became states, a standard house cost $1,000. 124-years later, with a national population of 27 million, a standard house is worth $1 million (combined capital city average).

Several generations of evidence confirm that the average annual rate of capital growth in different decades ranged between 5 and 9 percent.

EXAMPLE:

Over the first 23-years of this millennium, Australia’s biggest city, Sydney NSW, produced 7x calendar year *declines* in median house values (2004, 2005, 2006, 2008, 2011, 2018 and 2022). In the same years that house values declined in Sydney, the change in value in Launceston TAS was +35%, +15%, +8%, +2%, -2%, +14% and +17%. Bearing in mind that negative gearing is part of national tax law, it is nonsensical to imply that it is responsible for forcing asset values higher.

As illustrated in the below graphic, the rate of change to the value of homes has always varied widely from one year to another, including declines in some years.

But the tax policy regarding declaring all income, claiming all expenses and offsetting losses has been constant throughout the last 130+ years. So, clearly negative gearing was not the cause of house value variations.

What has changed frequently from year to year is credit policy, credit supply, infrastructure investment, monetary policy, political stability, migration policy, major events and job creation initiatives.

What has changed frequently from one city to another city is housing supply, the cost of housing, local confidence, local events, local population patterns, local employment opportunities and local levels of confidence.

For complete voidance of doubt, during the 2-years when negative was scrapped by the Hawke government (1985 to 1987), the combined capital city median house value increased by 28 percent (from $70,000 to $90,000) and the rate of growth accelerated.

Prolonged public speculation surrounding the introduction of significant tax increases usually weighs down public confidence for a period of (say) 12 to 18 months. Then normal market forces produce what the produce.

A recent example of the impact of waning confidence is when the RBA began its sharp increase of the cash rate from May 2022. Short-term buyer fear resulted in asset value declines for about 8-months. Throughout 2023, while interest rates were much higher, there was a 9 percent increase in the combined capital city house price in that calendar year.

Anyone with an agenda to change negative gearing under the guise of ‘improving housing affordability’ is clearly ignorant to evidence and completely uneducated on property market machinations. A gazillion people fall into this category.

History of negative gearing

Given that ‘negative gearing’ is not an official term or a specific policy, it has not been possible to define the exact date when ‘negative gearing’ first commenced.

We do know that taxation legislation permitting asset owners to offset annual cash flow losses against other personal incomes was first introduced some time before Australian Federation (1901).

We also know this:

• prior to Federation in 1901, all six colonies had their own laws for everything, including taxation,
• no individual’s income was taxed until South Australia became the first colony to introduce income tax in 1884,
• progressively during the late 1880’s, different colonies introduced a land tax on all property owners (owner-occupied and rented properties),
• the primary source of taxation revenue for each colony through to Federation was customs duty (levies charged on goods traded between the colonies),
• 14-years after Federation, out of necessity to rapidly raise money to fund Australia’s involvement in World War 1, the Federal government introduced a national income tax policy in 1915,
• states and the federal government both charged income tax through to 1942,
• real estate editorials in newspapers from the 1920s refer to investors offsetting investment expenses, including depreciation, against rental income,
• the 1936 (Australian) Income Tax Assessment Act notes that owners of income-producing assets, which includes investment properties, were authorised to claim all expenses associated with earning that income, including interest on loans for that asset.

Anecdotal evidence collected while studying Australian history and real estate archives confirms that rental yields at the beginning of the 1900s were in excess of 11 percent and that a standard rental property was always cash flow positive through to the late-1970s. That meant that the asset owner paid tax on the annual net profit.

From one decade to the next, as asset values consistently increased, the size of investment loan balances rose and rental yields progressively reduced.

And, with interest rates consistently above 10 percent, it became more common that suppliers of rental accommodation were absorbing losses.

Related article: 100+ years of Australian real estate history

By the early 1980’s, the instances of rental properties producing an annual operating loss increased to 10 percent of the national rental pool.

The full extent of the loss was diluted by offsetting it against other income sources (usually their personal wage).

The term ‘negative gearing’ did not pop up in community discussion until circa 1984, a year in which the median house value increased by more than 20 percent in Melbourne, Canberra and Adelaide, while Sydney, Brisbane and Hobart markets each had circa 6 percent growth.

To generate more taxation revenue, the Hawke government introduced new taxes in 1985. Real estate assets were Numero Uno on the tax hit list.

Effective 1 July 1985, the ability for a property investor to offset income losses against wages (aka ‘negative gearing’) was abolished. And a new tax on the sale of income-producing assets (capital gains tax) was also introduced from September 1985.

The commentary associated with the introduction of these controversial policies propelled the term ‘negative gearing’ into mainstream vocabulary. But the policy has been in place in Australia since circa 1890.

At the time of introducing the policies, as is always the case, local conditions (local economic strength, population patterns, housing supply, etc) were very different from one city to another.

One thing which large parts of Australia had in common was very tight rental supply (REIA vacancy rates confirm that 7 of 8 capital cities had vacancy rates below the 3 percent equilibrium in mid-1985). Many parts of regional Australia were even tighter.

Factoring in the lag time for the public to consider policies and to make and execute decisions, the participation rate of property investors progressively waned, tenants were forced to compete harder to rent a home and, within just 3-years, rent prices increased by between 10 and 70 percent in large parts of Australia.

Common sense eventually prevailed with negative gearing provisions being restored in September 1987.

Consequently, investor participation rates in 1988 and 1989 picked up, the depth of the rental pool increased, vacancy rates returned to equilibrium, and tenant stresses subsided.

By 1989, 6 out of 8 capital cities had vacancy rates of 3 percent or higher.

In the Federal Budget of May 2017, then Treasurer Scott Morrison surprised all with legislation that disallowed property investors to claim depreciation on used fixtures and fittings associated with a rental property.

Other than when they purchase brand new plant and equipment, landlords can no longer claim depreciation on stoves, air conditioners, hot water systems, dishwashers, etc.

Is negative gearing a tax policy designed for investing in real estate?

Contrary to naïve perceptions, ‘negative gearing’ is not a tax policy for property investors. ‘Negative gearing’ is merely a term.

The tax treatment for individuals providing rental accommodation is no different to providing other goods and services. That is, declare every dollar of income earned, claim expenses and offset net losses from one asset against another different income source.

The compelling evidence in the earlier Case Study proves that investors are neither given ‘handouts’ nor cost governments lost revenue. Only a narrow-minded simpleton, or a brat, could think otherwise.

How many properties are ‘negatively’ versus ‘positively’ geared?

In 1982-83, 100,000 of the then 1.2 million properties in the rental pool (about 8 percent) produced an annual operating loss.

The ratio of rental properties running at annual losses progressively increased to about 50 percent by the beginning of the millennium.

In 2024, as many as 90 percent of rental properties that were purchased across Australia subsequent to (say) 2010 will be producing an annual loss. Rental incomes are well short of investment expenses.

During a 2-year window of emergency-level interest rates (2020 and 2021) more than 50 percent of properties generated a small net profit.

While much gets said about the significant increase in rent prices in recent years, the even bigger increase in investment expenses gets (conveniently) omitted from most of the commentary.

At the start of the 2024 calendar year, the 4.35 percent cash rate was significantly higher than the 1.5 to 2.5 percent cash rate range throughout the 6-years prior to when the economically necessary rate cut cycle commenced.

During 2023-24, an overwhelming majority of landlords across Australia were required to absorb annual trading losses of between $20,000 and $35,000.

Approximately 2.3 million rental properties (close to 70 percent of the national rental pool) now receive less rental income than investment expenses each year.

To avoid tenant stresses, the rental pool must increase by circa 70,000 (net) properties each year just to maintain pace with demand.

For an everyday Aussie investor to purchase a standard $800,000 house in 2023-24 and add it to the rental pool, they will have an (after tax) shortfall of approximately $20,000.

That annual (after tax) loss on a standard house in Melbourne or Canberra is closer to $27,000, while it is circa $40,000 per year in Sydney.

Australians will never be able to purchase a cash flow positive (or neutral) property again. Generally speaking, a standard rental house will take circa 15-years to approach a cash flow ‘neutral’ position. The exception to the new norm will be if there are future periods of ‘emergency-level’ interest rates or if a rental property is purchased with a (say) 40+ percent cash deposit.

Now and forever into the future, Australia’s housing, tax and economic policy makers absolutely must be kind to those who fund this nation’s rental pool.

To support an already depleted national rental pool, serious consideration should be given to easing the cash flow pressures on rental suppliers. Policies worthy of consideration might include reversing the (May 2017) removal of depreciation deductions on plant and equipment, along with city council rates being the financial responsibility of the primary occupant of each property (including tenants).

Who are Australia’s property investors?

The lag period for people to lodge tax returns and for data to be analysed means that the most recently published official data is for the 2020-21 financial year.

The official statistics confirm that 2 out of every 3 property investors have an annual income of less than $100,000 and they are between 30 and 60 years of age.

Ian and Sarah, referred to in the earlier Case Study, are that ‘typical’ property investor.

How much does ‘negative gearing’ cost the government each year?

In the 2020/21 financial year, 3.28 million Australians declared having a share of ownership in investment properties.

47 percent of them recorded a net income loss in that year.

When all loss-making and all profit-making properties are bundled up, the total privately-owned national rental pool produced a combined net profit of $3.13 billion. Tax was payable on those profits.

Fast-forward to the reality of today, when the government eventually processes everyone’s tax return and publishes results for 2023-24, it is likely to confirm that circa 70 percent of rental properties in this country absorbed substantial losses.

I anticipate the ‘lifters’ of society absorbed an annual loss of between $11 and $14 billion. Once tax returns are processed, they might recoup about 30 percent of their original cash flow loss (say $3.5 to $4.5 billion).

Those with a vicious streak in their personality will (selectively) focus solely on that last figure. Tax refunds of between $3.5 to $4.5 billion is chump change in the context of the full picture.

As mentioned earlier, the people in question collectively pay $45 billion+ in (annual) property-related taxes on top of saving the government from funding a $2 trillion asset portfolio to provide shelter for 8.5 million fellow Australians.

In the overall scheme of things $3.5 to $4.5 billion is a miniscule cost of doing business.

The biggest concern of all for this country of 27 million people should be the flat line in the below graph.

The compounding effect of the actions of governments over the last 10 years continues to squash people’s aspirations and, as each year goes by, there are fewer and fewer ‘lifters’ like Ian and Sarah.

As demonstrated in the Ian and Sarah Case Study, the real cost to taxpayers from being a ‘leaner’ instead of a ‘lifter’ is $1.75 million per household.

Global housing rankings

There are numerous components to assessing housing. It is totally pointless to compare one isolated housing component with that of other countries.

Every country has unique cultures, unique property taxes, unique property laws, unique income tax and business tax policies, unique credit policies, unique economic profiles and unique cultures.

Some countries have tax policies with a similar version of Australia’s negative gearing, some don’t. Some countries have taxes on capital gains, some don’t. Some countries still tax the estate of the dead, some don’t.

From a homeownership rate perspective, the current ratio of 7 out of every 10 Australian households has held firm at this level since the late 1950’s.

For as long as governments continue to charge stamp duty and attack financial aspirants, Australia’s homeownership rate will never be better than 70 percent.

There are some countries with homeownership rates of circa 85 to 90 percent. They include Hungary, Vietnam, China, Russia, Lithuania, Singapore and India.

The quality of housing, the congestion, housing density, pollution, general lifestyle and climate are different to Australia.

Mexico, Thailand, Egypt and Spain have homeownership rates of 75 to 80 percent.

The UK, France, Sweden and the USA have homeownership rates of 60 to 65 percent, inferior to Australia’s.

Roughly 1 in 2 households are rented in countries such as Japan, Switzerland, Austria and Germany.

Different countries have very different cultures.

Some cultures include multiple generations living under the same roof.

The culture in other countries include that the family home is never sold nor bought, instead the home is passed on from one generation to the next.

Whether living in one’s own home or renting, Australia has among the very best living standards in the world.

The history of real estate in Australia confirms that real challenges associated with acquiring homeownership existed in every single decade since colonisation.

History also proves that, regardless of what the specific challenges are, if the individual’s will is strong enough they will always find a way.

1,074,202 Australians became first home buyers during the 10-years ending June 2023. That’s a spectacular achievement for a country which took 230+ years to accumulating the current total housing stock of 11.2 million.

Conversely, government statistics confirm that, of the 3.1 million rented households, the principal occupant for 2 million of them has been in the workforce for 20 or more years. That would suggest that the more pressing issue for some people is attitude (financial discipline, goal setting, etc).

About the AUTHOR

Simon Pressley’s 35-year career began in commercial finance, evolved into mortgage broking (2004 Australian Mortgage Broker of the Year Award) and transitioned into a professional property investor.

Awarded Australia’s Buyer’s Agent of the Year in 3-consecutive years (2012 to 2014), Simon is a Hall of Fame Inductee of both the Real Estate Institute of Australia and the REIQ.

Tertiary qualifications include being a graduate of Australian Institute Company of Directors, property investment advisory, financial planning and finance broking.

Having devoted a lifetime towards studying Australian real estate history to the deepest possible level, Simon has an intimate understanding of the complexities associated with the cause and effect of property market performance.

As the founder of Propertyology, Simon has recruited, trained and developed a team which has helped everyday Aussies to invest in real estate in twenty-three (23) individual cities and towns across 6 Australian states.

The below graphic contains a visual summary of some of Simon’s thought-leading forecasts across the last decade.

Propertyology are national buyer’s agents and Australia’s premier property market analyst. Every capital city and every non-capital city, Propertyology analyse fundamentals in every market, every day. We use this valuable research to help everyday Aussies to invest in strategically-chosen locations (literally) all over Australia. Like to know more? Contact us here.