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PIPA And Investors

PIPA And Investors

I recently attended the annual national conference in Sydney of PIPA, the Property Investment Professionals of Australia.

In many ways this is the most important organisation in Australia in terms of finding solutions to one of the nation’s most pressing problems, the rental shortage.

PIPA comprises people who deal every day with the people who supply over 90% of the homes that people rent in Australia – private investors.

They’re often referred to as mum-and-dad investors, because most of the people who own investment real estate are ordinary households on average incomes who own just one investment property.

This very important cohort provides the product which is in short supply and it would make sense for politicians to encourage them in any way possible to solve the shortage crisis.

But the opposite is happening. Private investors are being massively discouraged and they’re leaving the real estate market in droves, as the new PIPA survey graphically illustrates.

And that, in essence, is why we have the rental shortage crisis.

But whenever politicians decide to have a talkfest to give the impression of doing something constructive about the shortage, they invite all the usual suspects – such as the developer lobby and social housing advocates who argue their vested interests – but organisations which represent the coalface of the rental supply industry are usually not included, rather remarkably.

It’s another example of the way in which governments at all levels are failing to engage with the people who are the solution to this enduring problem.

Instead, governments collectively are working really hard on alienating the people who are the only real solution.

Investors are being scapegoated, demonised and vilified – by politicians, by academics and by journalists – and more and more of them are opting out.

Media tends to characterise investors as a privileged class with benefits that others don’t enjoy, like negative gearing.

But the opposite is true. Property investors are punished and penalised in myriad ways.

They pay higher interest rates than home buyers.

They pay higher stamp duty than home buyers.

They pay higher council rates than home owners.

They pay higher rates of insurance than home owners.

They pay taxes that others don’t pay, including land tax and capital gains tax.

And yet they’re portrayed as people who are pampered and privileged.

In fact they are a demonised and heavily punished cohort.

And if some politicians – notably the Greens – had their way, they would be penalised even more by scrapping negative gearing, increasing capital gains tax and preventing investors from ever increasing their rent, regardless of how much their costs rise.

Hopefully none of this will happen because it would be a disaster for everyone, especially for tenants. A rental cap is no use to people who can’t find the rental property at any price, because there is such a chronic shortage.

Hopefully, organisations like PIPA can get a seat at the table with government and make the case for policies that no longer punish investors.

Hotspotting is a platinum sponsor of PIPA because we think they’re the most important of the industry bodies operating in the real estate space.

It’s an organisation that needs to supported and listened to, so that meaningful solutions to Australia’s housing problems can be created and implemented.




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