Finally, someone telling it as it is....

[BHDOGS]

Here ya go


According to the Grattan Institute, quarantining negative gearing losses would save the budget around $4 billion per year initially, falling to a saving of around $2 billion per year over the longer term. It would also remove some speculative demand from the housing market, taking the pressure off prices, improving housing affordability and increasing the rate of home ownership.

The Housing Industry Association’s claim that the removal of negative gearing would reduce the supply of rental affordability is also complete bunkum. Reserve Bank of Australia data clearly shows that the overwhelming majority of investors — almost 95% — buy pre-existing dwellings, not newly built dwellings, and that the proportion of investors buying new dwellings has fallen spectacularly since negative gearing was re-introduced in September 1987 …

[ford man xf]

Originally Posted by BHDOGS

thats the whole point to get people to buy there first house in the first place not rent from investors who are trying to do tax dodges isnt that a good thing.

Were talking about "overvalued" house prices. Those renters that could now afford houses would create a supply vs. demmand issue which would cause inflationary pressures on the real estate market and then the next lot of people that are trying to buy a house would suffer the same problem of housing affordability. It's a cruel cycle, but that is the real estate cycle in Australia. My parent's managed to buy property in there early twenties, but they sacrificed a lot.

And how is negative gearing a tax "dodge"? It's a legal form of taxation reform.

[ford man xf]

Originally Posted by danzvtil

IF this magical ban on investors was implemented, and pretend property values SOFTENED, maybe by 10 or 20%, heres what would happen:


1-No incentive to invest and provide rental accommodation. Less houses available to rent=more competition=RENTS WILL RISE.

2-The people renting my house wont suddenly go out and buy like they have been sprinkled with some magical prosperity dust, they A) Cant afford it even at a cheaper price B) Will have NO chance of saving any deposit C) No financial institution will loan to these people in a market where home values are falling.

3-Property values are tied into superannuation investment, so the average aussie battler will have LESS money to retire on

4-Governments will NOT increase public housing availability, they are broke, and seriously, we should all know by now that the private sector is better at providing goods and services (housing) than the bloated public sector.

Get rid of negative gearing, people will still buy property as an investment, house prices will always rise.

[BHDOGS]

I know its not illegal what there doing its just a drain on the system the government chooses to ignore as to fix it would be to hard if they insist on keeping it atleast make it only on new properties so the investors are atleast adding to the housing stock not locking people out of buying the existing ones in a decent area that isnt 5 hours from work.

[BENT_8]

Originally Posted by danzvtil

1-No incentive to invest and provide rental accommodation. Less houses available to rent=more competition=RENTS WILL RISE..

I love this angle, like all the houses being negative geared would all disappear leaving everyone on the street.
Hey at least vacant land prices would fall..
.

Originally Posted by danzvtil

2-The people renting my house wont suddenly go out and buy like they have been sprinkled with some magical prosperity dust, they A) Cant afford it even at a cheaper price B) Will have NO chance of saving any deposit C) No financial institution will loan to these people in a market where home values are falling..

Some people will always be renters, it sounds like you've got them where you need them.

Originally Posted by danzvtil

3-Property values are tied into superannuation investment, so the average aussie battler will have LESS money to retire on.

So sad.

Originally Posted by danzvtil

4-Governments will NOT increase public housing availability, they are broke, and seriously, we should all know by now that the private sector is better at providing goods and services (housing) than the bloated public sector.

So let me get this right, the Governments broke and cant provide society in general with decent services but its ok to syphon billions in funds from the revenue bank to provide a tax break for a few.

I guess we'll have to agree to disagree.

[BHDOGS]

Lets break it down to what it is a drain on the government coffers that is restricting housing supply inflating prices and punishing future generations for the greed of the current one do i personally suffer because of it? does it affect me in anyway? no. But it will directly affect my children in 30 years and there children in 60 to the point owing your own home will be impossible. Where talking almost 500percent increase in some areas some even high as a 1000 percent increase in just my life time and im not even 30 years old yet imagine in another 30 or 60 its absolutle madness.

[ford man xf]

Originally Posted by BHDOGS

Lets break it down to what it is a drain on the government coffers that is restricting housing supply inflating prices and punishing future generations for the greed of the current one do i personally suffer because of it? does it affect me in anyway? no. But it will directly affect my children in 30 years and there children in 60 to the point owing your own home will be impossible. Where talking almost 500percent increase in some areas some even high as a 1000 percent increase in just my life time and im not even 30 years old yet imagine in another 30 or 60 its absolutle madness.

It does seem unfair, but we live in a capitalist society, and we all benefit hugely from this society in many different ways. Housing can be affordable, you just have to be smart about you lifestyle and can't expect the best of everything at the start.

[BENT_8]

We seem to have gone down the negative gearing tangent, but to be honest I believe foreign investment is a bigger problem for Australia and Australians.

At first I thought, why doesn't Australia stand up and say no, who wants their Country to be sold off to foreign investors.
I couldn't understand the relative silence on the matter.

Then I came around and realised, they stimulate the market which improves capital gains for Aussies with homes, no wonder nothing is said, those on the ladder benefit from it.

That's right, Aussies stay silent and sell out their Country today for capital gains tomorrow.

How wonderful.

[BHDOGS]

Yes at the moment it is still affordable aslong as you move far away enough away aslong as you have a job thats stable but there all disappearing aswell aslong as you dont have kids youll be fine this is the whole point were all robbing future generations of there choices. Where buying cheap **** from china sending there jobs offshore, shutting there jobs down to feed more profits for super funds. investing in houses to secure ourselves locking them out capitalism is stealing our future. Its making people rich while robbing our souls.

[ILLaViTaR]

The problem I find (besides it being open to the foreign market) is we're cutting essentials like healthcare and even the dole before cgt/negative gearing handouts.

Priorities are all screwed up, people are indulging on the tax dollar while others are suffering and struggling and we can't afford to support it all. It would be nice if we could but we can't in this day and age.

[steve.zissou]

Supply and demand!!!

Supply - Govt is too slow at opening up new areas for development. Main reason for this is most of the population has a vested interest in keeping house prices going up. More supply will mean prices will fall and mr and mrs jones will not be happy (and other impacts mass reduction in home equity would have on the economy).

Demand - Sorry, but Australians are stupid when it comes to house prices. We are willing to put much more of our income into the house we "have to have". If more of us thought" gee, this is stupid, I am not going to pay almost a million dollars for a house thats going to take me 20-30years to pay off" then prices would come down. But i dont think that's going to change. Then you have a bunch of other factors that make building a new home harder than it should be so people just pay more for an existing home. - and you simply have a lot more people wanting to buy homes in the major cities (like sydney),

then the govt usually makes things worse. For example, A new home buyer is willing to pay 4 times their wage for a house (100k wage $400k house) the govt say's ok, we'll reduce stamp duty and chip in 10 grand grant. what happens - the seller increases the the price by an equal amount. it should be called the developers grant

But then again, if people were smarter, i wouldn't be able to buy the bargains i get.

you can follow the herd or look to where things will be 20 years down the track and really make some money - but that doesnt help the poor young family that just wants a place to live.

I think the only real solution to that delema is to take speculation out of that part of the market. How? Set up estates for new home buyers only. 1/4 acre blocks are $100,000. You must build within 2 years and ..... you cant sell or rent your house out for 50 years (if you do it must be at cost). But alas, people are too greedy for this to happen (oldies dont want to see their prices drop and newbies dont want to miss out making a short term buck by flipping their home in a few years.

[steve.zissou]

interesting data on house prices compared to average income

http://www.numbeo.com/property-inves...s_rankings.jsp

dont want to be a local in the maldives

[mik]

From my perspective houses are way over priced, the 40 year old 3 bedroom I'm in was $ 105,000 15 years ago, the house today is basically the same as it was except for paint, but year on year the council valuations climb, from memory the last council valuation had it at 400,000 + , which seems utterly ridiculous to me.

[BENT_8]

Originally Posted by ILLaViTaR

The problem I find (besides it being open to the foreign market) is we're cutting essentials like healthcare and even the dole before cgt/negative gearing handouts.

Priorities are all screwed up, people are indulging on the tax dollar while others are suffering and struggling and we can't afford to support it all. It would be nice if we could but we can't in this day and age.

That's the problem that I see, most Australians believe their is a debt problem in this Country, but no one is prepared to say anything which might impact on them negatively.

When Smokin' Joe handed down that budget he took a knife to the fabric that makes Australia what it is.
He unleashed the mindset amongst those near the top that anyone below them not taking advantage of the same things that they did are just bludgers and don't deserve a place in society.

Never in my lifetime have I experienced such content towards anyone struggling than I have in the last 3 months.
Its like it is ok to now slam those at the bottom because heaven forbid those with plenty have to contribute to their lifestyles in some small way which in turn provides civil rest.
Thing is, total Government spending on welfare represented the smallest % of expenditure on the tax receipt we got this year, go figure.

And talking about lifestyles, have you noticed how every time welfare or the Medicare co payment get mentioned in media circles they refer to it in comparison to smokes, grog and pokies as though everyone who is unemployed is kicking back in an air conditioned pokie room with a margarita, only surfacing for a smoke every 15 minutes.
It just isnt reality, but it makes those further up the ladder feel good about themselves, unified at last.

[Yellow_Festiva]

Originally Posted by steve.zissou

interesting data on house prices compared to average income

http://www.numbeo.com/property-inves...s_rankings.jsp

dont want to be a local in the maldives

Or the Nepali capital for that matter!

Tell ya what, if I'm reading that right there is still some (comparatively) cheap real estate to be had in the US and Europe! Newcastle Upon Tyne, Birmingham and Coventry are well under 3 and their gross yield is around 8-10%

Hmmmm... that European Passport I hold may yet come in handy

Would love to see something like that that was able to go back 10,20 and 30 years ago...

Edit: Wonder why the RE in Male is so highly valued? Wasn't there a prediction that most of the main island won't be fit for habitation within 50-100 years? I heard / read that they (the government) were looking to relocate and Fiji and (and even northern QLD???) was on the shopping list.

Nice place to visit for a few days actually (almost got arrested as they thought I was a drug runner lol) but still...

I guess being such a small place demands a premium...

[ILLaViTaR]

Originally Posted by BENT_8

That's the problem that I see, most Australians believe their is a debt problem in this Country, but no one is prepared to say anything which might impact on them negatively.

When Smokin' Joe handed down that budget he took a knife to the fabric that makes Australia what it is.
He unleashed the mindset amongst those near the top that anyone below them not taking advantage of the same things that they did are just bludgers and don't deserve a place in society.

Never in my lifetime have I experienced such content towards anyone struggling than I have in the last 3 months.
Its like it is ok to now slam those at the bottom because heaven forbid those with plenty have to contribute to their lifestyles in some small way which in turn provides civil rest.
Thing is, total Government spending on welfare represented the smallest % of expenditure on the tax receipt we got this year, go figure.

And talking about lifestyles, have you noticed how every time welfare or the Medicare co payment get mentioned in media circles they refer to it in comparison to smokes, grog and pokies as though everyone who is unemployed is kicking back in an air conditioned pokie room with a margarita, only surfacing for a smoke every 15 minutes.
It just isnt reality, but it makes those further up the ladder feel good about themselves, unified at last.

I've heard some stories from people who know him personally.. if everyone heard his real thoughts people would be rioting until he stood down as our treasurer, cringeworthy stuff you can see it in him though he's completely out of touch literally hates them, hides his anger well enough though i guess, let's just say the budget is more about personal vendetta than economics (no matter where in society the cuts are applied).

[BENT_8]

Originally Posted by ILLaViTaR

I've heard some stories from people who know him personally.. if everyone heard his real thoughts people would be rioting until he stood down as our treasurer, cringeworthy stuff you can see it in him though he's completely out of touch literally hates them, hides his anger well enough though i guess, let's just say the budget is more about personal vendetta than economics (no matter where in society the cuts are applied).

These clowns forget that their time in the sun is but a moment, their legacy will be imprinted in history for ever, to be judged by all.

I wonder how history will remember Smokin Joe...

[Stefan]

Originally Posted by BENT_8

We seem to have gone down the negative gearing tangent, but to be honest I believe foreign investment is a bigger problem for Australia and Australians.

You're on the right track BUT I think the biggest issue is that the banks are handing out the big loans to buy the properties at high prices.

If the banks pulled back slightly (ie made it a little harder to get a massive loan) there would be less money to buy property and vendors would need to come down in price to sell. It would certainly pull the reins in....you do need to be careful as you'd want this to be a gradual process without spooking the market. Our economy is somewhat reliant on real estate price stability.

I know years ago banks would ensure you could service the loan...not sure that these days it is as strict.

Abolish negative gearing would be like simply trying to gradually deflate a balloon by sticking a pin into it, the market would collapse along with every industry that is associated with it. It would be economic suicide and it will never happen.

[ford man xf]

Originally Posted by Stefan

You're on the right track BUT I think the biggest issue is that the banks are handing out the big loans to buy the properties at high prices.

If the banks pulled back slightly (ie made it a little harder to get a massive loan) there would be less money to buy property and vendors would need to come down in price to sell. It would certainly pull the reins in....you do need to be careful as you'd want this to be a gradual process without spooking the market. Our economy is somewhat reliant on real estate price stability.

I know years ago banks would ensure you could service the loan...not sure that these days it is as strict.

Abolish negative gearing would be like simply trying to gradually deflate a balloon by sticking a pin into it, the market would collapse along with every industry that is associated with it. It would be economic suicide and it will never happen.

And the banks never lose, loan insurance ensures this.

[Stefan]

Originally Posted by ford man xf

And the banks never lose, loan insurance ensures this.

Yep pretty much

Also

They hand out the big loan if the owner defaults, the bank moves in, sells the house to the next SOD and has lost nothing....

If the owner scrapes through no probs....

BUT banks also know that if they put the brakes on, house prices ease, they are suddenly exposed as they then have a whole lot of overcapitalised home loans in the market. If owners default they may owe more than what the property is worth, now if the bank moves in it may not cover the money the loaned in the sale of the property.

All a fine balancing act, as I said in the first post in Australia the whole economy, the Banks and Governments rely heavily on in ever increasing house prices.... they will move heaven and earth to keep it that way.

[MITCHAY]

There's a lot of cheap money floating around at the moment too with interest rates the way they are. It brings more into the game to push up demand.

[zilo]

Cost of housing is driven by an increasing population.

Immigration is the biggest contributor.

[Stefan]

Originally Posted by zilo

Cost of housing is driven by an increasing population.

Immigration is the biggest contributor.

A very sweeping statement.

Immigrants don't roll up and jump into the housing market and start buying property at exorbitant prices with cash...they will rent...then buy.

Immigrants do provide the necessary population growth to sustain many industries including construction, which in turn provide jobs for us all.

I build infrastructure projects for a living, without population growth, I would not have a job, when I say I, there are tens of 1000's of people like me, maybe hundreds of thousands when you consider the support and service industries like cafes or the take away shop, transport companies, importers and exporters, car manufacturers, steel industries etc etc that we rely on when we build a billion dollar rail or road project.

[BENT_8]

Originally Posted by zilo

Cost of housing is driven by an increasing population.

Immigration is the biggest contributor.

How can immigration be a problem when there are thousands of empty houses around the country, owned by investors, waiting on capital gains.

I spoke with a retired agent on holiday from NSW recently who claimed Chinese investors are buying up ****loads of property there and leaving it idle.
They don't need to borrow to do it, they can outbid most Aussies and don't need to rely on renting them out to cover any expenses.
They just lock them up an leave them.

China faced the same issues we do about 5 years ago and the Government took action to slow the bubble and deflate it slowly.
They did this by making secondary purchases require 40% deposit, limiting secondary purchases to 1 and having a requirement that to invest in cities like Beijing you had to live there for 5 years first.
It worked, however, the cashed up Chinese investor just shifted their focus to Australian property investment and our Government relaxed our laws to suit.

Why?

Let me get this right, the Chinese, amongst the smartest people on Earth realised that speculative housing investment was causing economic hardship to its people and took action to rectify it, yet Australians are so much smarter and allowed the spooked Chinese to speculate in our market free from personal risk or damaging their own market.

BHDOGS is spot on, Aussies are happy to sell their souls for immediate financial gain.
They believe they are setting their future generations up with this wealth but in reality all they've done is up the ante.
Instead of first home buyers gambling at the $5 table, they have been forced to sit at the $50 table or give up all together and go play the 1c pokies.

[Stefan]

This is the frustrating thing in this country. We have such a great place to live, beautiful and safe, but just seem to have so much bad policy that looks to be potentially eroding our future well being.

[Yellow_Festiva]

Originally Posted by onfire

And it's only going to make it tougher putting on another 45k because the Mrs. wants a new Santa Fe.

My parents helped myself, my brother and sister with our first places.

Fast forward 10 years and we have all done well with that kick start.

Mum retired, tells us she wants a Santa Fe so myself and my brother went halfs



Least we could do Would have been a Getz had we not got that head start.

[BENT_8]

Hows the realestate.com add with Arnie.

Blatantly advertising foreign investment in OUR COUNTRY!!!

[BHDOGS]

who would of thought having a commission based business would lead to so many sharks and ********* in the industry.

[zilo]

Originally Posted by BENT_8

How can immigration be a problem when there are thousands of empty houses around the country, owned by investors, waiting on capital gains..

That sounds like BS ..... can you prove it?

[BENT_8]

Originally Posted by zilo

That sounds like BS ..... can you prove it?

No, but it is common knowledge that the practice takes place.

Check out the story on 7 news tonight in Adelaide about foreign investment and the damage its doing.
$17 billion.

Only problem with this story is that its about a cash grab and not aimed at reducing the problem.

Jay Wetherill said he was happy to sell our state to foreign investors, then I think he realised what he had said...