‘Poison chalice’: The Block serial buyer and one of Australia’s biggest investors issues stark warning on negative gearing debate

Multi-millionaire investor Danny Wallis has warned a negative gearing move could be a “poison chalice” for Anthony Albanese, and why he’s selling homes off nationwide.

Danny Wallis is the multi-millionaire Victorian entrepreneur that's become a staple in Australian households ever since he became Danny from the Block, at home with his dog Herby Picture: Jake Nowakowski.

One of Australia’s biggest property investors has labelled any fiddling with negative gearing as akin to drinking from a “poison chalice” for the government.

Rich lister Danny Wallis has investment properties in almost every state and has publicly announced he is selling a number of them in response to government policy changes, including higher land tax and giving tenants greater control of homes, in Victoria.

The Block regular is also now selling off a Brisbane investment property, over concerns the Queensland government will follow the approach taken by Victoria’s Andrews and Allan Governments towards investment properties.

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Mr Wallis said for many Australian investors, a federal government change to negative gearing might result in them investing their money in their super, rather than in providing rental homes. He also noted it could provoke an electoral backlash.

“Their standing in the polls aren’t good and it seems like a poison chalice,” Mr Wallis said.

“But they have been trying to fiddle around with it for a decade. So they are going to do something.

“If they do fiddle with negative gearing, they are going to lose rentals. They have to. There comes a point where it’s better to just put your money in super. They (governments) are just making it so difficult.”

Wallis is selling homes around the country as government housing policies make being a landlord too hard. Picture: Jake Nowakowski.

If other investors follow Wallis’ lead and choose to sell, it could have dire consequences for tenants.

PropTrack figures show the average vacancy rate across the nation’s capital cities is just 1.47 per cent in August.

That figure is well below the 3 per cent threshold at which the firm’s economists say rental cost growth is likely to normalise. In regional areas, just 1.19 per cent of rental homes were available to tenants.

Mr Wallis added that the federal government might well consider negative gearing changes in response to the actions of the Victorian government, with investors impacted by increased land tax likely to be seeking to claw that back as a deduction on their annual tax bill.

The hundred-plus millionaire, best known for his random number bidding at auctions on hit TV show The Block, said he was looking for opportunities to sell Victorian properties and would in the next few weeks list a Queensland home he’d bought six years ago.

21 Raeburn St, Manly, when Danny Wallis bought the home in 2018.

The Melbourne-based Mr Wallis said he had bought the home to help out a friend who didn’t have anywhere to go, but after six years rent free in the property she was now back on her feet and had moved out.

“I did look at renting this one, but when they are talking about the same laws as Melbourne in Queensland, I don’t want touch it,” Mr Wallis said.

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“The money is good, but there’s too much hassle renting it out. It’s one thing to have a friend in there, when you can rely on them to look after it, but otherwise you don’t know what you are getting.”

The Manly property he is selling in Brisbane may yet attract an investor, with records showing Wallis paid $790,000 for it in 2018 and modern valuations putting it at $1.4m.

The classic Queenslander is expected to be worth as much as $1.4m today.

The three-bedroom Queenslander-style home with a pool out the back and walking distance to trains and the suburb’s waterfront.

Most of the home’s living spaces are located on its second floor, with carparking and a recreation room, laundry and workshop located at ground level.

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Originally published as ‘Poison chalice’: The Block serial buyer and one of Australia’s biggest investors issues stark warning on negative gearing debate