Finance Revealed: Australia’s negative gearing hot spots

Revealed: Australia’s negative gearing hot spots

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Australian Taxation Office (ATO) data obtained and analysed by The New Daily has revealed the regional Qld town of Mackay as Australia’s negative gearing capital.

Taxpayers spent $50.3 million compensating investors for losses incurred on their rental properties in that suburb in the 2013-14 financial year, the most recently released year of ATO data.

Queensland proved to be Australia’s leading state for negative gearing expenditure. The Gladstone region was the state’s next biggest hotspot $43.1 million in losses.

Around Mackay, 5073 people reported negative gearing losses to the ATO and around Gladstone, the number was 4120.

Those two regions ranked first and third respectively in the national tally of people who negatively gear their investment properties.

Gladstone and Mackay are centres of Queensland’s massive energy industries. If those regions are topping the charts, it is likely that highly paid resource workers bought up big in local housing during the resources boom.

In Victoria, the area around Werribee and Derrimut on Melbourne’s western fringe reported $47.1 million in negative gearing losses spread among 5090 investors. Second in Victoria was the eastern Melbourne suburb of Glen Waverley and its surrounds, which recorded $41.2 million in losses spread among 4098 people.

Surprisingly Australia’s most populous state, NSW, failed to top the negative gearing loss chart.

North-western Sydney is the state’s most negatively geared area, with Baulkham Hills, Bella Vista and Winston Hills lodging $35.4m worth of claims.

The priciest suburbs weren't listed. Photo:AAP
The priciest suburbs weren’t listed. Photo:AAP

This is less than the top gearing areas in Queensland and Victoria, despite the fact Sydney plays host to the country’s most expensive houses.

In fact the Hills Shire makes up a large amount of the top-three negatively geared postcodes in New South Wales – with suburbs like Kellyville, Rouse Hill and Castle Hill all posting substantial deductions.

Top priced suburbs are largely absent

One surprising thing noticeable in most cities was that the high priced and most prestigious suburbs did not show up among the top five in negative gearing.

This could be because sophisticated investors in those areas use trusts and companies to hold their investments and they would not show up in the ATO tables for ‘individuals’.

Western Australia’s undisputed negative gearing champions are the southern Perth suburbs of Canning Vale and Willeton, with just over $40m worth of deductions between the two.

It’s a long way back to the next group, the city’s fast-developing southern corridor in the Beeliar region ($31.8m), including Jandakot and Success.

The Peel region made $31.6m worth of claims, with suburbs like Mandurah, Halls Head, Falcon and Dawesville among that group.

Miners are buying

Hedweld Engineering said Australian businesses must start training staff in automation technology if they are going to survive.
The resources boom may have spawned a negative gearing boom. Photo: AAP

The Pilbara, given the heavy investment in the area during the resources boom, is still a negative gearing hotspot, with the region – comprising Karratha and surrounding towns – logging $27m of claims.

And the gentrifying southern Perth suburbs of Hamilton Hill, Hilton and Collbellup lodged $23.4m worth of deductions.

The northern Canberra suburbs around Franklin and Palmerston are the ACT’s leaders – with $29m worth of claims between them.

Moving west, areas like Charnwood, Kippax and Macgregor are also rife with investors.

In the Northern Territory, suburbs north of Darwin like Rapid Creek, Alawa, Nightcliff and Wagaman lead the way.

South Australia is something of a laggard with its top region around Happy Valley, in Adelaide’s south, reporting $14.2 million in losses among 1841 people.

Tasmania’s second city, Launceston, came out on top in the island state with $10.5 million in losses among 1759 investors.


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