The Issue that government needs to solve is housing supply and innovation in Australia

The proposed changes to negative gearing and capital gains tax appear less about solving the core housing supply crisis — and more about increasing government revenue. (Treasurer, Jim Chalmers  expects the changes to raise around $40 billion over a decade. )

If the real issue is housing affordability, then the key question is:

Will this policy materially increase housing supply?

Removing negative gearing on established properties may reduce investor demand at the margins, but unless there is a major increase in new housing construction, planning reform, infrastructure, and productivity in the building sector, affordability pressures will continue to exist.

The policy allows for negative gearing on existing homes and investments , and reducing incentives for those entering the market , which will further reduce supply as it is not in anyone’s interest to sell their existing properties .

This will cause 

• rental supply could tighten

• rents could rise further

Is  the government trying to solve a housing tax problem… or a housing supply problem?

Interested in other views.

this is the Afr article

The Hidden Forces Driving Australian House Prices

Australian property prices don’t just rise because of “demand.”

They rise when a powerful mix of:

• higher incomes

• equity growth

• easier access to credit

• investor confidence

• population growth

• limited supply

• tax incentives

all collide at the same time.

And the latest data reveals something many people misunderstand:

The Australian property investor is not usually a billionaire developer.

It’s often a 45–64 year old professional couple building long-term wealth and retirement security through 1 investment property. 

The graphs highlight several major trends shaping Australia’s housing market:

1. Property investment skews older
2. The largest cohort of investors are aged between 45–64.
3. This makes sense:
4. • they’ve built equity
5. • their incomes are typically highest
6. • they understand leverage
7. • and many are thinking about retirement income. 
8. Higher income earners dominate investing
9. The top income quintiles hold the majority of investment property debt and ownership.
10. But contrary to public perception, many investors are still “mum and dad” investors with only one property.
11. Over 71% of Australian investors own just a single investment property. 
12. Credit availability drives prices
13. When banks lend more money, prices rise.
14. The RBA data shows investor lending has surged strongly again, with investors now accounting for more than 40% of some banks’ new home loans. 
15. Investors are often less constrained than first-home buyers
16. Why?

Because many already own property and can:

• leverage existing equity

• borrow against appreciating assets

• use tax benefits like negative gearing

• absorb short-term market volatility better. 

1. Australia still has a structural supply problem
2. Population growth continues while housing construction struggles to keep up.
3. That imbalance supports long-term price pressure upward. 

One of the biggest misconceptions in the property debate is that “investors” are a tiny wealthy elite.

The data suggests otherwise.

Most are ordinary Australians trying to:

• create passive income

• reduce reliance on pensions

• build intergenerational wealth

• and protect themselves against inflation.

The real drivers of rising property prices are broader:

• supply shortages

• access to finance

• population growth

• wage growth over time

• and confidence in Australian property as a long-term store of wealth.

Property is no longer just shelter.

For many Australians, it has become the country’s largest wealth creation system.

It’s all about the relationship , trust and adding value !!! Lesson 1 - Listen with a view to understand vs listen with a view to respond

Jen Gaudet - has written a post that has hit me square on the eyes!!

- It’s all about the relationship , trust and adding value !!! 

Which is what #referron and referring and giving warm introductions is about . There is seldom something better that you can offer a person - than a warm introduction to a relevant person in your network that you know like and trust 

Sometimes I get so enthused about #referron - and who I can refer them to - and the value I can add to someone ….. it seems as if I’m trying to sell the product and its uses - vs stopping and listening to what the other party actually wants and what they are trying to say!!!

It’s so Importment to listen 👂 first with a view to understand vs to just launch into your pitch or what you are trying to sell .

It’s a big lesson that I as a person need to remind myself every day 

It’s the L in leadership 

Listen 

And listen and silent have the same letters !!

Here is a link to Jen’s article! https://www.facebook.com/share/p/1CvNMBGsem/

🏦 Rates, Refinancing & Property: What Smart Borrowers Are Doing Right Now

With the next Reserve Bank of Australia decision on May 5 approaching, borrowers aren’t waiting… they’re reassessing.

Here are the 4 shifts happening right now 👇

• The refinancing question everyone’s asking

• How to unlock real value from your offset

• Why property prices aren’t falling

• A realistic path from renting → owning

1. The Refinancing Question: Act Now or Wait?

Between global tension, rising costs and recent rate hikes… many borrowers are feeling the squeeze.

So they’re asking one thing:

👉 “Should I refinance now… or wait?”

Refinancing now could mean:

• Lower repayments immediately

• Better structure for current conditions

• Improved cash flow

Waiting could mean:

• Potentially better rates later

• Avoiding switching costs too early

There’s no perfect timing — only the right strategy for your situation.

👉 Want to see if you’re overpaying right now?

Connect with me instantly: https://rfrn.link/ivank

2. The Offset Account Advantage (Most People Underuse This)

Here’s something most borrowers don’t fully optimise:

If you’ve got:

• Loan = $700,000

• Offset = $40,000

You’re only paying interest on $660,000

Simple. Powerful.

But here’s what changes in a rising rate environment:

The value of your offset increases automatically

That means:

• More interest saved (without doing anything)

• Faster loan reduction

• Better return than many savings accounts

But not all setups are equal. Structure matters.

👉 Want me to review if your offset is actually working for you?

Tap here to connect: https://rfrn.link/ivank

3. Why Property Prices Haven’t Fallen

Most people expected prices to drop when rates rose.

That hasn’t really happened.

Here’s why:

• Prices still rose 0.7% in March

• Listings up slightly — but still below last year

• Construction is slowing

The real issue?

👉 Supply is still tight

Driven by:

• Population growth

• Labour shortages

• High building costs

Translation:

Prices may slow… but a major drop isn’t guaranteed.

👉 Want to understand what this means for your borrowing power?

Let’s connect: https://rfrn.link/ivank

4. Renting → Owning: Still Possible (With a Strategy)

Right now:

• Rents are rising faster than wages

• Affordability is at its lowest in years (per realestate.com.au)

• Saving feels harder than ever

So what are smart buyers doing?

They’re not waiting.

They’re adapting 👇

• Buying more affordable properties

• Looking in different locations

• Rentvesting

• Using government schemes

The biggest shift?

👉 taking action now

Even knowing your borrowing capacity can bring your timeline forward.

👉 Want a clear path based on your numbers?

Connect with me here: https://rfrn.link/ivank

Final Thought

Rates are moving.

Rents are rising.

Opportunities are still there — if you’re proactive.

Most people stay stuck because they don’t act.

👉 The ones who win? They get clarity early.

Let’s Make It Practical

If you’re thinking about:

• Refinancing

• Improving cash flow

• Buying your first (or next) property

👉 Let’s look at your situation together

Connect instantly via my business card:

https://rfrn.link/ivank

Ivan Kaye

BSI Finance