11/05/2026
Something worth thinking about before 'celebrating' tonightβs budget.
Removing negative gearing and the CGT discount for property investors is being sold as a win for renters and first home buyers.
But the people cheering the loudest will end up hurt by it.
When you push individual investors out of the housing market, the prices don't magically drop 15% so FHB's or young family's can afford them on their current salaries.
They get absorbed by the buyers with enough capital to hold them long-term: large companies, institutional funds, private equity.
Unlike a 'greedy landlord' Mum and Dad investors, these groups don't sell. They hold permanently, set rents with data and algorithms, and treat housing as an asset class.
Mum and Dad investors - the largest 'beneficiaries' (I say loosely) of Negative Gearing - are emotionally invested in their properties, tenants, and communties they invest in.
I say that loosely, because the actual largest beneficiaries of these tax breaks are the tenants - because reduced holding costs for owners, means more competitive rents for tenants.
The US has been through this after the GFC. Institutional investors decimated housing stock. Many younger Americans who supported those changes are now stuck renting in markets dominated by large institutional landlords.
The same thing happened in manufactured housing through instituional capital investment firms. They build the homes, finance them, insure them, and if buyers default, they repossess and resell. The entire system stays under one corporate umbrella.
In our country, the ALP and industy bodies tout this as 'Build to Rent' - and it's put up on a pedestal as a great way to increase housing supply and affordability. Maybe - but the incentive is there for corporates that can, by design, hold the asset forever.
Australia is moving in the same direction. And the removal of NG and CGT is a freight train in that direction.
How come concern about institutional ownership is one of the few issues where both the left and right largely agree?
Different reasoning, same concern: once institutions own the housing stock, ordinary people lose leverage.
Before celebrating any housing policy, the real question is simple: Who will own the homes 10 or 20 years from now?
The landlords people complain about will have sold eventually. The price will get tempting enough - and the buyer with capital will snap it up.
And that buyer? It will be Woolworths or Coles. Not FHB's 'lucky enough to catch a break'.
And the worst part about that? The institution replacing them will take that asset out of the 'purchase pool' forever.
