Sunday, September 11th, 2011 - Onyx

“Australia has the means to solve its housing supply crisis by a relatively small increase in property investment participation. The Government is providing substantial financial incentives to increase participation but it is failing to promote these incentives and the media is ignoring them,” says Ruby Janssen, Partner at Onyx - a leading property advisory and professional services company.


  • The National Housing Supply Council estimates a cumulative shortfall of 178,400 dwellings between total underlying demand and total supply. 
  • This imbalance drives up housing costs, increasing both housing prices and rent.
  • Almost 100% of Australian income earners participate either directly or indirectly in the share market, but only 13.3% participate in property investment.
  • Overcoming the housing shortage could be achieved if only an additional 1.5% of Australian income earners invested in property.
  • NRAS, the National Rental Affordability Scheme, can help solve this problem, but knowledge of NRAS is low amongst existing and most importantly would-be property investors. 


The shortage of housing is a major infrastructure imbalance in Australia, with the National Housing Supply Council in its last State of Supply report estimating the cumulative shortfall between total underlying demand and total supply to be currently 178,400 dwellings.

This imbalance drives up housing costs, increasing both housing prices and rent for all Australians.

While almost 100% of Australian income earners participate in the share market, either directly or indirectly through their superannuation funds, only 13.3% participate in property investment. Of that 13.3%, only one in four have more than one property.

“In spite of what the doomsayers try to tell us, most Australians have a large amount of equity in their homes, with the average mortgage being only 28% of the property value,” says Ruby Janssen.

“This represents 72% in untapped equity against which homeowners can borrow in order to invest.”

Mortgage Insurer Genworth reports that nearly half of Australia’s mortgages are being paid off faster than the bank requires, while recent figures from the Australian Bankers’ Association (ABA) indicate that the average Australian has 59% more on deposit with banks than four years ago. This has resulted from Australians saving more than they have been at any time in the past 20 years.

All this demonstrates a capacity for increased property investment, especially when combined with the tax deductions that property investment delivers.

Property investors typically 100% finance their property purchases through borrowing 20% of funds against their home with the balance coming from a loan on the new property.

So why then is there under participation in property investment?

“The main reason is that most residential investment properties have negative cash flow in their early years,” says Ms Janssen. “This requires investors to pay money each month to cover ongoing costs, reducing the investor’s discretionary income.”

Ms Janssen also notes that the professional financial planning industry has an inbuilt bias against property and in some cases planners are not permitted by their dealer group to recommend direct property.

Thankfully, in order to overcome these obstacles, the Government has introduced a program called the National Rental Affordability Scheme (NRAS), which provides property investors with an ongoing incentive that is up to 15 times that of the First Home Owners Grant (FHOG).

While the FHOG is designed to overcome the major barrier for First Home Owners, a lack of savings for a deposit, NRAS helps property investors overcome negative cash flow concerns.

Unfortunately, knowledge of NRAS is limited amongst existing and most importantly would-be property investors, so they are not aware of how to take advantage of the tax free incentive estimated to be $113,817 over 10 years.

NRAS encourages people to invest in the affordable sector of the market which, according to Owen Donald, the Chair of the National Housing Supply Council, is where significant potential lies for investors and where new dwellings are needed most.

“If awareness for NRAS can be raised amongst potential property investors, we could begin an easing of the acute housing shortage,” says Ms Janssen.

Contact Profile


Onyx helps its clients create wealth through property investing. Onyx provides holistic professional advice to new and experienced property investors in the same way that share market investors have come to expect.

The Onyx team includes real estate agents, mortgage consultants, lawyers, financial planners, developers and researchers. Onyx also assists property investors to access NRAS Incentives and identify and purchase investment properties.
Ruby Janssen
P: 1300 1400 15
M: 0412 309 571


NRAS, National Rental Affordability Scheme, Property Investment, Property Investing, Property Market, Australia, Housing



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