Huge profits as 20-year home move expires
That means their rental income has met or exceeded their expenses, including loan repayments. As a result, they've been pocketing extra income each year on top of any capital gains. This is a significant shift given the previous 20-year trend of most investors being negatively geared.
The trend is revealed in FY23 tax data released by the Australian Taxation Office (ATO) last month.
Based on all our tax returns, the ATO reports there were 2,261,080 Australians with an interest – either sole ownership or joint or part-ownership – in one or more rental properties in FY23. Among them, 51% – or 1,143,905 – reported net positive or neutral rental income.
This is the third consecutive year in which more investors came out ahead after expenses. In FY22, 58% of investors reported positive or neutral net rental income. In FY21, it was 53 per cent. This follows a two-decade history prior to FY21 when the majority of investors were negatively geared each year.
The fact that interest rates were at record lows in FY21 and FY22 is the most obvious reason why more investors were positively geared in those years. But what about FY23?
The Reserve Bank of Australia raised interest rates 10 times (albeit from a low base) in FY23. The cash rate rose rapidly from 0.85 per cent to 4.1 per cent between July 2022 and June 2023, and yet most property investors remained positively geared. How is that so?
I think several factors are contributing to what I hope might become a lasting trend. The biggest one is a huge surge in weekly rents that began in FY21 and continued into FY22 and FY23.
Data shows annual rental growth of about 7 per cent in FY21, 9 per cent in FY22, and another 9 per cent in FY23.
Additional rental income would have certainly offset the impact of rising interest rates in FY23. (The pace of rental growth has since slowed but remains above inflation, with annual increases of about 8 per cent in FY24 and 3.4 per cent in FY25.)
Another contributing factor is the ageing profile of property investors. According to the data, the largest cohort of Australian investors are aged 60 years or older. The FY23 data shows more than one in four investors, or 27 per cent, are in this age group.
This is relevant because older people typically have more wealth, after a lifetime of work and decades of owning their homes, and therefore have more scope to pay down investment debt.
Retirement would also provide a new motivation to pay off debt, as would turning 60, since that's when many Australians can access their superannuation in a lump sum under certain conditions.
Additionally, a rising number of baby boomers have been downsizing in recent years, which is freeing up funds to pay off loans or fund the purchase of a new property investment with cash.
Owning property mortgage-free virtually guarantees strong positive cash flow, since loan repayments are by far the biggest cost for most landlords.
I'm also mindful that since the pandemic, we have seen a significant trend in investors choosing to buy cheaper properties with higher rental yields in regional areas or investing in capital cities in states or territories that are more affordable than Sydney and Melbourne. This may also be contributing to the trend in more property investors being positively geared.
Affordability is a key driver of this trend, but the pandemic also facilitated it. Lockdowns led to rapid changes in the industry, including enhanced online marketing tools and the provision of private inspections via video. Documentation like loans and property sale contracts went digital, making the financing and conveyancing processes more streamlined, and reducing the barrier of distance.
I also think more investors are employing buyers' agents to do all the legwork for them, and this helps people access other states and territories to diversify their portfolios. Buyers' agents are readily available across the country, so investors can buy in the best-performing markets with confidence. For example, there is plenty of anecdotal evidence that East Coast investors have been buying in both the capital cities and regional areas of Western Australia and Queensland over the past few years. These states have been among the top performers in terms of home value growth for several years now.
The best thing about more property investors being positively or neutrally geared is that it makes it easier for them to hold on to their investments for the long term.
The real wealth from property investment comes from capital gains, and we know that the longer you hold your investment, the higher your capital growth is likely to be.
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There are more than 30,000 Australians employed in clean energy generation, storage and transmission. Rooftop solar is cutting bills and creating work for electricians and engineers. Renewable energy zones and battery hubs are supporting new projects and new careers, particularly in regional areas. This is just the beginning. With the strongest possible 2035 climate target - one that aligns with a cut of at least 75 per cent to climate pollution - we can unlock hundreds of thousands of jobs in clean industries. These are jobs in construction, advanced manufacturing, critical minerals, green hydrogen and clean exports. Jobs that will underpin our economic future and help Australia remain competitive in a decarbonising global economy. We have the ingredients: world-class solar and wind, critical minerals, skilled workers, and trusted trade relationships. What we need now is policy certainty. 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We must use the abundant electricity we create to transition manufacturing and industrial processes to an emission-free future, further enhancing Australia's resilience and economic strength. Accelerating action now means stronger economic growth, and more employment opportunities for communities on the frontlines of change. READ MORE: We cannot avoid all that projected climate changes will bring, but we can and must build resilience in our communities, infrastructure and economy by identifying weaknesses and investing in strengthening or eliminating where possible those weaknesses. This is a strategic imperative. We cannot afford to aim low. A weaker target risks locking Australia out of new markets, putting regional jobs at risk, and burdening our children with even greater climate and economic disruption. A strong 2035 climate target is entirely achievable, economically sound, and in line with the direction our trading partners are heading. This isn't just about reducing pollution. It's about creating good, lasting jobs and securing a fairer, safer future for all Australians. The decisions we make in the next few months will define the opportunities for the coming decades. Let's make them count. The Australian government is about to make one of the most consequential economic decisions of the decade: setting our national climate target for 2035. This is about shaping the kind of economy we want in the years ahead. Do we want to remain shackled to geopolitically volatile fossil fuel markets? Or do we want to build a cleaner, more resilient economy that delivers secure, skilled jobs in every corner of the country? As someone who's spent decades working across energy systems in Australia and abroad - from oil and gas to wind and solar - I've seen how strong, clear targets drive investment and job creation. And I've seen the costs when governments do too little. The economic damage from climate pollution is already here. According to the Insurance Council annual average cost of extreme weather has more than doubled in the last 30 years. Marine heatwaves are battering fisheries, aquaculture and tourism. Back-to-back floods have devastated regional communities. Drought is hitting farmers hard. The risks are rising, and they are being felt on the ground - in jobs lost, bills rising, and industries under pressure. But there's another side to this story: if we act decisively, we can turn this challenge into one of Australia's biggest economic opportunities. We're already seeing signs of what's possible. There are more than 30,000 Australians employed in clean energy generation, storage and transmission. Rooftop solar is cutting bills and creating work for electricians and engineers. Renewable energy zones and battery hubs are supporting new projects and new careers, particularly in regional areas. This is just the beginning. 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Climate damage is already undermining key industries, from farming to tourism to insurance. But cutting climate pollution, and doing it faster, can keep us safer and provide a boost to our economy. We've made good progress over the last few years. But after a lost decade, we have catching up to do. We must accelerate the growth of our renewable energy-based resources, for that is where our comparative advantage lies. We must electrify our transport and strategically couple the grids and vehicles, delivering massive battery energy storage and further consolidating resilience. We must use the abundant electricity we create to transition manufacturing and industrial processes to an emission-free future, further enhancing Australia's resilience and economic strength. Accelerating action now means stronger economic growth, and more employment opportunities for communities on the frontlines of change. READ MORE: We cannot avoid all that projected climate changes will bring, but we can and must build resilience in our communities, infrastructure and economy by identifying weaknesses and investing in strengthening or eliminating where possible those weaknesses. This is a strategic imperative. We cannot afford to aim low. A weaker target risks locking Australia out of new markets, putting regional jobs at risk, and burdening our children with even greater climate and economic disruption. A strong 2035 climate target is entirely achievable, economically sound, and in line with the direction our trading partners are heading. This isn't just about reducing pollution. It's about creating good, lasting jobs and securing a fairer, safer future for all Australians. The decisions we make in the next few months will define the opportunities for the coming decades. Let's make them count. 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Drought is hitting farmers hard. The risks are rising, and they are being felt on the ground - in jobs lost, bills rising, and industries under pressure. But there's another side to this story: if we act decisively, we can turn this challenge into one of Australia's biggest economic opportunities. We're already seeing signs of what's possible. There are more than 30,000 Australians employed in clean energy generation, storage and transmission. Rooftop solar is cutting bills and creating work for electricians and engineers. Renewable energy zones and battery hubs are supporting new projects and new careers, particularly in regional areas. This is just the beginning. With the strongest possible 2035 climate target - one that aligns with a cut of at least 75 per cent to climate pollution - we can unlock hundreds of thousands of jobs in clean industries. These are jobs in construction, advanced manufacturing, critical minerals, green hydrogen and clean exports. 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A weaker target risks locking Australia out of new markets, putting regional jobs at risk, and burdening our children with even greater climate and economic disruption. A strong 2035 climate target is entirely achievable, economically sound, and in line with the direction our trading partners are heading. This isn't just about reducing pollution. It's about creating good, lasting jobs and securing a fairer, safer future for all Australians. The decisions we make in the next few months will define the opportunities for the coming decades. Let's make them count.
The Advertiser
43 minutes ago
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Renault says it's a challenger brand, but won't chase Chinese brands with its pricing
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So we're never going to be in that bottom 30 per cent, so to speak, but we will be in the fat, or the spike, of the segment, and we will be in the premium part of the segment. "And you will see that with all our products, whether it is the small SUV segment, whether it is the van segment, you will see that displayed all the way through." While unclear, that "bottom 30 per cent" likely encompasses many of Australia's newest small SUVs – particularly from newer Chinese challenger brands. The cheapest of these is the Chery Tiggo 4, priced from $23,990 drive-away, followed by the GWM Haval Jolion and MG ZS, both priced from $26,990 drive-away. There's also the base Mahindra XUV3XO at $23,990 drive-away, another brand looking to put its stamp on the small SUV segment. Still, arguably the most direct rival to Renault's Duster is the Suzuki Jimny, which costs $30,490 before on-roads in its base form. "We always operate as a challenger brand, because our volume is relatively low compared to the market. So we always see ourselves as a challenger brand," Mr Sealey added. "But the reality of life is we are able to command – as long as the product's good enough – a premium position within that segment." Mr Sealey's statement that Renault is a challenger brand is certainly backed up by relatively low sales, with 2871 so far this year – 958 of which were passenger vehicles. For context, the Tiggo 4, Jolion, and ZS have each outsold that figure by more than 10 times. Renault's current best-seller isn't a passenger vehicle; it's the Master van with 1210 sales. MORE: Renault Duster targeted at Jimny, Crosstrek buyers MORE: Everything Renault Content originally sourced from: Renault may be off the radar of many Australian buyers, but its local boss insists the brand won't slash prices to shift the status quo. Talks of budget-minded Renaults were sparked at the local launch for the new Duster small SUV, which is now the brand's cheapest model and starts at $31,990 before on-roads. Despite cheaper segment competition, Renault Australia general manager Glen Sealey says the brand isn't interested in the "bargain basement area". "If you look at how typically the market is spread out today, that SUV segment that we talked about with Duster, and how 30 per cent sits below $30,000 – that's not us," he told media at the Duster launch. "We're not in that bargain basement area, but with Duster, we're not in that very premium end either, $40,000 to $45,000. CarExpert can save you thousands on a new car. Click here to get a great deal. "But we do have cars that sit there, which is Arkana, and we do have cars that sit above that, which is Megane E-Tech. So we're never going to be in that bottom 30 per cent, so to speak, but we will be in the fat, or the spike, of the segment, and we will be in the premium part of the segment. "And you will see that with all our products, whether it is the small SUV segment, whether it is the van segment, you will see that displayed all the way through." While unclear, that "bottom 30 per cent" likely encompasses many of Australia's newest small SUVs – particularly from newer Chinese challenger brands. The cheapest of these is the Chery Tiggo 4, priced from $23,990 drive-away, followed by the GWM Haval Jolion and MG ZS, both priced from $26,990 drive-away. There's also the base Mahindra XUV3XO at $23,990 drive-away, another brand looking to put its stamp on the small SUV segment. Still, arguably the most direct rival to Renault's Duster is the Suzuki Jimny, which costs $30,490 before on-roads in its base form. "We always operate as a challenger brand, because our volume is relatively low compared to the market. So we always see ourselves as a challenger brand," Mr Sealey added. "But the reality of life is we are able to command – as long as the product's good enough – a premium position within that segment." Mr Sealey's statement that Renault is a challenger brand is certainly backed up by relatively low sales, with 2871 so far this year – 958 of which were passenger vehicles. For context, the Tiggo 4, Jolion, and ZS have each outsold that figure by more than 10 times. Renault's current best-seller isn't a passenger vehicle; it's the Master van with 1210 sales. MORE: Renault Duster targeted at Jimny, Crosstrek buyers MORE: Everything Renault Content originally sourced from: Renault may be off the radar of many Australian buyers, but its local boss insists the brand won't slash prices to shift the status quo. Talks of budget-minded Renaults were sparked at the local launch for the new Duster small SUV, which is now the brand's cheapest model and starts at $31,990 before on-roads. Despite cheaper segment competition, Renault Australia general manager Glen Sealey says the brand isn't interested in the "bargain basement area". "If you look at how typically the market is spread out today, that SUV segment that we talked about with Duster, and how 30 per cent sits below $30,000 – that's not us," he told media at the Duster launch. "We're not in that bargain basement area, but with Duster, we're not in that very premium end either, $40,000 to $45,000. CarExpert can save you thousands on a new car. Click here to get a great deal. "But we do have cars that sit there, which is Arkana, and we do have cars that sit above that, which is Megane E-Tech. So we're never going to be in that bottom 30 per cent, so to speak, but we will be in the fat, or the spike, of the segment, and we will be in the premium part of the segment. "And you will see that with all our products, whether it is the small SUV segment, whether it is the van segment, you will see that displayed all the way through." While unclear, that "bottom 30 per cent" likely encompasses many of Australia's newest small SUVs – particularly from newer Chinese challenger brands. The cheapest of these is the Chery Tiggo 4, priced from $23,990 drive-away, followed by the GWM Haval Jolion and MG ZS, both priced from $26,990 drive-away. There's also the base Mahindra XUV3XO at $23,990 drive-away, another brand looking to put its stamp on the small SUV segment. Still, arguably the most direct rival to Renault's Duster is the Suzuki Jimny, which costs $30,490 before on-roads in its base form. "We always operate as a challenger brand, because our volume is relatively low compared to the market. So we always see ourselves as a challenger brand," Mr Sealey added. "But the reality of life is we are able to command – as long as the product's good enough – a premium position within that segment." Mr Sealey's statement that Renault is a challenger brand is certainly backed up by relatively low sales, with 2871 so far this year – 958 of which were passenger vehicles. For context, the Tiggo 4, Jolion, and ZS have each outsold that figure by more than 10 times. Renault's current best-seller isn't a passenger vehicle; it's the Master van with 1210 sales. MORE: Renault Duster targeted at Jimny, Crosstrek buyers MORE: Everything Renault Content originally sourced from: Renault may be off the radar of many Australian buyers, but its local boss insists the brand won't slash prices to shift the status quo. Talks of budget-minded Renaults were sparked at the local launch for the new Duster small SUV, which is now the brand's cheapest model and starts at $31,990 before on-roads. Despite cheaper segment competition, Renault Australia general manager Glen Sealey says the brand isn't interested in the "bargain basement area". "If you look at how typically the market is spread out today, that SUV segment that we talked about with Duster, and how 30 per cent sits below $30,000 – that's not us," he told media at the Duster launch. "We're not in that bargain basement area, but with Duster, we're not in that very premium end either, $40,000 to $45,000. CarExpert can save you thousands on a new car. Click here to get a great deal. "But we do have cars that sit there, which is Arkana, and we do have cars that sit above that, which is Megane E-Tech. So we're never going to be in that bottom 30 per cent, so to speak, but we will be in the fat, or the spike, of the segment, and we will be in the premium part of the segment. "And you will see that with all our products, whether it is the small SUV segment, whether it is the van segment, you will see that displayed all the way through." While unclear, that "bottom 30 per cent" likely encompasses many of Australia's newest small SUVs – particularly from newer Chinese challenger brands. The cheapest of these is the Chery Tiggo 4, priced from $23,990 drive-away, followed by the GWM Haval Jolion and MG ZS, both priced from $26,990 drive-away. There's also the base Mahindra XUV3XO at $23,990 drive-away, another brand looking to put its stamp on the small SUV segment. Still, arguably the most direct rival to Renault's Duster is the Suzuki Jimny, which costs $30,490 before on-roads in its base form. "We always operate as a challenger brand, because our volume is relatively low compared to the market. So we always see ourselves as a challenger brand," Mr Sealey added. "But the reality of life is we are able to command – as long as the product's good enough – a premium position within that segment." Mr Sealey's statement that Renault is a challenger brand is certainly backed up by relatively low sales, with 2871 so far this year – 958 of which were passenger vehicles. For context, the Tiggo 4, Jolion, and ZS have each outsold that figure by more than 10 times. Renault's current best-seller isn't a passenger vehicle; it's the Master van with 1210 sales. MORE: Renault Duster targeted at Jimny, Crosstrek buyers MORE: Everything Renault Content originally sourced from:
Sky News AU
an hour ago
- Sky News AU
Trump administration pressures Albanese government over defence budget, warning AUKUS goals at risk without 3.5 per cent of GDP
The United States has issued its most forceful warning yet to Prime Minister Anthony Albanese, with the Pentagon urging Canberra to significantly increase defence expenditure or risk undermining its AUKUS commitments and overall military readiness. In what shapes as a critical test for the Labor government, senior US defence officials are now calling for Australia to adopt a spending benchmark of 3.5 per cent of GDP, labelled by Washington as the new international norm in the era of strategic competition and rising global instability. 'For Australia in particular, it is vitally important that they are able to raise defence spending to 3.5 per cent of GDP,' a US Defence official told The Australian. 'That will allow them to generate and field the kind of forces required not just to defend themselves but work together closely with us to maintain deterrence in the region.' The comments come ahead of a demanding period of international diplomacy for Mr Albanese, who is set to attend the United Nations General Assembly in New York next month and is working towards an in-person meeting with US President Donald Trump. There's growing speculation that the planned Quad leaders' summit may be shifted from India to the US to align with the UN gathering. While the AUKUS pact promises to deliver at least three Virginia-class nuclear-powered submarines to Australia in the 2030s, that arrangement is contingent on US national security assessments and whether the transfer would erode America's own naval capabilities. Washington now signalling frustration at what it sees as underwhelming fiscal commitment from Canberra. 'It is not an abstraction. This is a concrete objective. AUKUS is an expensive thing. Increasing defence spending is going to be vitally important for Australia to achieve its stated objectives under AUKUS while also modernising the rest of the ADF,' the US official continued. 'At a certain point, it's just maths. They need to spend more on defence.' Australian Treasurer Jim Chalmers' most recent budget forecasts military spending reaching nearly $59 billion this financial year, equivalent to just over 2 per cent of GDP. However, only about a third of that funding is allocated to acquiring new weaponry and systems. The government's long-term plan includes an increase of $50.3 billion in defence spending over the next 10 years, but the bulk of that funding is deferred until 2028–29 and beyond. 'I think we can say with confidence that if Australia does not raise defence spending it is going to struggle to field the forces required to defend Australia but also to make good on its commitments to others,' the Pentagon official warned. 'But we are hopeful that Australia will be able to lean in and make these decisions - 3.5 per cent of GDP on defence spending; that is the new global standard.' The US call echoes recent developments in NATO, where member states agreed in June to boost collective defence outlays to 5 per cent of GDP. Mr Albanese has expressed reluctance to pad out Australia's defence numbers by including civilian infrastructure, despite some of those investments directly supporting military capability. He has instead highlighted Australia's direct contribution of over $US1 billion to the US submarine industrial base as a clear signal of commitment to the AUKUS framework. The pressure from Washington arrives just as Pentagon policy chief Elbridge Colby leads a review of the trilateral security pact, with concerns mounting that Australia's budget settings may fall short of what's needed to deliver on the ambitious goals of AUKUS and meet the demands of a changing Indo-Pacific region.
