Where to invest before Labor’s negative gearing deadline

With Labor looking as if it might win this weekend’s election, prospective property investors are considering making a move before the end of the year.

That’s because if Labor does proceed with its proposal to restrict negative gearing to new property and to reduce the capital gains tax concession to 25%, investment properties owned before January 1, 2020 will be unaffected by the changes.

While savvy investors never buy properties just so they can use negative gearing, it is still helpful in the early days of ownership when outgoings are generally quite high.

Our new research has uncovered 34 city markets that smart investors should consider before changes to negative gearing are potentially implemented at the start of next year.

Perhaps unsurprisingly, the research found that the best properties on the list were established houses with strong capital growth prospects in more exclusive suburbs.

The research identified locations that are likely to produce solid annual price growth next year because of a number of factors, including greater demand than supply.

The suburb with the highest annual growth forecast is Parkside in Adelaide, where house prices are predicted to increase by 7.8% next year.

Parkside is only a few kilometres south of the CBD, and it borders the southern parklands, so this might be the reason its houses are in strong demand.

Belmont in Brisbane had the second highest forecast annual growth of 7.6%, perhaps due to its desirable bushland as well as large home sites located about 12 kilometres from the city centre.
Two other Brisbane suburbs recorded forecast annual capital growth of more than 7% – Mansfield and Stafford Heights.

Mansfield State High is always in demand from parents wanting their children to attend the well-regarded public school, which might underpin that suburb’s price performance.

Stafford Heights, located about eight kilometres north of Brisbane, has also been a suburb in demand for a while now partly due to gentrification, with many homeowners renovating postwar properties.

While Sydney and Melbourne generally have experienced price softening over the past two years, the analysis clearly shows there are plenty of suburbs where buyers are keen to purchase – now and in the future.

From Money Magazine

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