Tenants will be going to the polling booths on July 2 knowing the rental payments on their next lease could increase. This is a point that has been overlooked during the current debate about negative gearing.

It could be assumed the opponents of negative gearing for investment properties don’t appreciate how negative gearing contributes significantly to rental affordability, which is vital to the budgets of many households. One in four dwellings is owned by an investor adding to the pool of properties available to tenants. The majority of these are not luxurious, but ordinary homes with the median capital city rent currently sitting at $485 per week. If negative gearing is restricted, there is a risk that investors will be discouraged from purchasing property, thereby reducing the number of rental options for those who choose or must rent their home. And when you reduce supply, demand continues to increase, and pricing adjusts accordingly.

Furthermore, landlords that currently negatively gear will need to raise rents to cover the loss of income, adding further budgetary pressures on tenants.

Historically, investors have made up around 30 percent of housing finance commitments; over recent years, in Sydney, this has passed the 50 percent market. During this period, rents have remained flat - around one percent - confirming the availability of supply is more than matching the demand for a rental property. A positive outcome for tenants looking to save for their own home!

In fact, recent LJ Hooker Research found that 27 percent of tenants rent a property to save and then purchase their own home. If rents rise by 10 percent, as expected, this will severely impact their ability to save.

Furthermore, regional and rural towns are expected to be severely impacted if investors drop out of the market. These towns attract less new construction than metropolitan areas but have a high proportion of the population relies on rental accommodation. A strong level of investor demand is crucial to deliver new housing stock and lift the supply of rental accommodation across the country to keep rents affordable.

Likewise, strong investor demand in the existing market, which is more characterised by free standing homes better suited to a growing family, is equally as important to keeping rental accommodation affordable, as well as offering a choice of rental stock in communities where families would like to live.