The chairman of a prominent real estate network has spoken out against constant and incorrect claims about negative gearing, suggesting attention should be directed elsewhere.
Charles Tarbey, chairman of C21, has said that the tightening of credit policy is not being given the attention it deserves, with “false” expectations of a market crash taking the spotlight instead.
He said discussions surrounding predicted declines of up to 50 per cent have been “false and misleading predictions”.
“The so-called ‘property experts’ have not helped our industry over the last 12 months with numerous and widely publicised predictions of an impending market crash in the vicinity of 30 per cent to 50 per cent,” Mr Tarbey said
“Whilst such headlines may have brought some buyers into the market (first home buyers in particular), the reality is that these enormous drops simply didn’t eventuate.”
He also said that the predictions being made from the property experts have been eclipsed by the gains being made in the market over the last half a decade.
“Expert predictions fail to mention that despite property prices falling over the last 12 months (and are forecast to do so again in 2019 across most states), the decline in value is nowhere near the gains achieved over the preceding five years,” Mr Tarbey said.
“This should be a fact that should be publicised rather than focusing on the inaccurate property price predictions that are driving negative sentiment.”
Citing the recent CoreLogic-Moody’s Analytics Australia Home Value Index Forecast, the chairman said house prices are predicted to fall in Sydney and Melbourne by 9.3 per cent and 11.4 per cent, respectively.
“These figures reflect the most accurate representation of the current market and are in striking contrast to those thrown around by property pundits who do little but disrupt consumer knowledge and confidence,” he said.
The focus should be instead be on the environment of tightening finance, he said, especially after a consequence of the banking royal commission being that even stricter lending requirements have made it even more difficult for Australians, especially investors, to secure a loan.
“This is causing most of today’s problems and is disrupting our industry far more than the upcoming federal election,” Mr Tarbey said.
“Until we see some flexibility return to the banks’ lending criteria, the housing market will continue to remain flat, regardless of the outcome in the upcoming election. Understanding and awareness of this issue must be given more prominence within the industry.
“House prices escalated well beyond where they should have in the last growth phase due to the prolonged low interest rate environment and availability of credit, which spurred on the market. I have always held the view that prices will fall and then stabilise at a similar level to where they were about two years ago.”