A new survey has uncovered the way Australian investors are structuring their property portfolios, with respondents indicating just how hard a change to negative gearing policy would hit them.
New research conducted by LJ Hooker show almost one third of property investors would consider selling some or all of their investment properties should the federal government axe negative gearing.
Thirty-one per cent of respondents in LJ Hooker’s 2015 Investor/Tenant survey indicated they would sell some or all of their investment properties if there was a policy change.
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Fifty-five per cent of respondents indicated negative gearing was either “very important” or “important” in their investment strategies, while 16 per cent indicated that it was “not important”.
Commenting on the results, LJ Hooker national research manager Mathew Tiller said it highlighted the broader economic implications such a policy change could have.
“The negative gearing [issue] receives significant debate because of the perceived impost on the tax base, but it’s evident to see how important it is for investors. It is also important for the economy, encouraging investors to inject money into the economy, driving jobs and supporting local communities,” Mr Tiller said.
Among the other interesting results arising from the survey is the prioritisation of capital gains over cash-flow when formulating an investment strategy.
Twenty-seven per cent of respondents indicated capital growth was their priority, with 15 per cent indicating their prioritisation of rental income.
Fifty-eight per cent indicated their preference for a balanced combination of capital growth and rental income.
It would appear many investors have opted to branch out when it comes to selecting the location of their properties, with 16 per cent of respondents indicating they own an investment property within five kilometres of where they live.
Twenty-eight per cent of respondents indicated they have an investment property “more than 20 kilometres but in the same state” of where they live, while 14 per cent invested in a different state to the one where they live.