Refer a Friend

Busting Property Myths

Busting Property Myths

Busting Property Myths

Residential real estate holds significant value for Australians. Financially, it is the country’s largest asset class, with a valuation of over $7 trillion. Emotionally, it defines the Great Australian Dream.

house of money - Busting Property MythsThe average cost of buying a house in Australia is 7.2 times the annual income of a typical household, up from 4.2 times annual household income 15 years ago.

The information in our Myth Busting below, was put together in September 2017 by 12 Certified Practising Accountants (CPAs) in Melbourne and Sydney. Known as the CPA ChangeMakers, their aim is to develop a series of recommendations to address housing affordability in Australia.

Their discussions were informed by data and insights from Peter Munckton, chief economist at Bank of Queensland, Greg Dickason, chief technology officer at CoreLogic, and Andy Gooden, chief operating officer of Little Real Estate.

There are many myths attached to housing affordability. The CPA ChangeMakers examined three common misconceptions. Read about them below!

Myth #1 Foreign Investors are Buying up Property

Property purchases by foreign investors are regulated by the Foreign Investment Review Board (FIRB). Non-residents can only buy new or off-the-plan properties. People who live here for less than 12 months can buy one existing property, but they must live in it and they have to sell it when their visa expires. According to the FIRB annual report, foreign investment in residential property totalled $13.5 billion for the 2015- 2016 year – just 4.4% of the $303.8 billion in transactions.

Myth #2 Investors Own Multiple Properties

Multiple property ownership is less common than some media stories may suggest.

“Less than 8% of Australians (1,764,924 people) own an investment property and around 18% of those own two investment properties and only 2% own four 1.”

Myth #3 Negative Gearing is Driving Up Prices

Negative gearing allows property investors to claim a tax deduction for the amount of loss their property incurs. However, it plays a minimal role in housing affordability – it is a tax benefit, not an investment strategy.

Less than 13% of Australian taxpayers were negatively gearing investments in 2014-15 2

1 RP Data and 2011 Census Data
2 Australian Taxation Office 2014-15

Free Consult Registration
close slider

Find out more about Investing in Property

If you have considered investing in property, our educational 1 hour Financial Freedom Information Evening (when available) or a meeting with a Property Strategist is invaluable.

We educate people interested in protecting and growing their wealth via smart property investments so they can take control of their future and make their own decisions.

Obtain knowledge and make an informed decision... Book a 1:1 presentation to find out more!

The information provided is purely to educate you on the in's and out's of property investment. It will help you make an informed decision on whether investing in property is right for you.