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NRAS property investment stacks up and shouldn’t be demonised: Ruby Janssen
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Have you ever wondered why politicians are so universally distrusted when so many of them work 24/7 for the benefit of their communities? It’s because they use 90% of their media time telling us that other politicians are not to be trusted. As a result we don’t trust any of them.
I find it really disappointing when this attitude spills over into other areas of our lives, and so it is with this in mind that I write in response to the article by Margaret Lomas on Property Observer entitled “NRAS is a tax scheme”.
Lomas’s article has sought to demonise NRAS and people associated with NRAS by the use of inflammatory language like “greedy developers”, “flippant claims”, “prostituted for gain” and “misleading in the extreme”. It is this approach to commenting on property investing that leads to people distrusting property investment in general. The result is that many Australians may miss out on potential investment benefits through analysis paralysis and “whom do I believe?” syndrome.
Like many other areas of business, and indeed our lives, NRAS and the property investment field in general may have its share of people who do the wrong thing, but there are also many professionals working for the benefit of not only investors but also the NRAS tenants. Lomas's pen portrait of NRAS is inconsistent with the fact the 57% of all NRAS allocations have been made to endorsed charities that are not-for-profit organisations.
My company has specialised in NRAS property services for well over two years. We have sold property from most of the major NRAS-approved participants to clients throughout Australia and have provided mortgage broking, financial planning, self-managed superannaution fund and legal services related to NRAS purchases. We are better placed than any other company or organisation in the country to know the facts of NRAS. So let me address some facts relevant relating to Lomas's article.
She asserts that “It’s pretty easy to counter the flippant claims of NRAS marketers” and uses three points to support her argument but all three are inaccurate and poorly researched. Let me take each in turn:
There are only a small number of areas where 100 or more NRAS allocations have been made. Official government figures show that NRAS allocations have been made across 849 postcode areas. Of these 639 areas have less than 50 allocations. There are some postcode areas with large allocations, for example, in Bruce in the ACT, but these allocations have been made to large institutions such as the Australian National University and will not be available to individual property investors.
The conclusion is that there is no evidence that NRAS properties are being released in large enough numbers into individual markets to push down market rents.
Here are Lomas's hotspots and the number of NRAS allocations in each: Ballarat (443 NRAS allocations), Bendigo (267), Gladstone (243), Mackay (313) and Toowoomba (146). I think there is fair opportunity for hotspot buying.
Lomas claims NRAS is purely a tax scheme. If this is the case then so too is superannuation and non-NRAS property investing. The provision of tax incentives by the government for superannaution and property investing in general underlie investing in these areas. We saw when Paul Keating removed negative gearing incentives for property investors that the effect was so dramatic that he had to quickly reinstate them.
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