The future of Australian property prices

[sptrawler]

Apparently it will save about $3 billion a year which can be spent on other things, so the answer may well be yes.

It is entirely dependent on the social outcome, which is an unknown. IMO

 

[qldfrog]

Apparently it will save about $3 billion a year which can be spent on other things, so the answer may well be yes.

Like new obsolete submarines for the next 20y...our government needs some engineers to get the BS out of technical issues lobbied by interest groups. My experience for gov in the last 10 y is give them a billion they will spend 2

 

[Smurf1976]

our government needs some engineers to get the BS out of technical issues lobbied by interest groups.

Strongly agreed and I expect there would be a valid role for experts in other fields too for the same reason.

 

[satanoperca]

IMO not necessarily, it will make it that the only rental properties, viable as an investment are new builds, to get a reasonable return on that investment may well make average rents rise.

It may also make the value of established older style rentals fall, which in turn makes them knock over jobs, this compounds the shortage as people with money land bank the blocks or worse still board up the houses.

The assumption is that a fall in value, means poorer people buy the property, but as has been shown in W.A, that doesn't necessarily follow.
House prices have crashed back to 2006 prices, it hasn't resulted in more low income buyers, it has just increased the amount of knock overs.
The only thing that is guaranteed, is that the wealthy will have a bigger market share of the NG market, be that as a developer or a landlord. Obviously they are the only ones who will be able to avail themselves of the tax break.
There is obviously a lot more to it and we will debate it.



The property market is re adjusting, as has happened in W.A and I agree with changes to N.G. Just not the ones that Labor are suggesting.
If the property market is hit extremely hard, there will be a recession and that will see a reduction in living standards as unemployment increases. I've lived through two major recessions, they aren't fun.
A slow gradual deflation of prices will benefit everyone, IMO what Labor are suggesting will cause a crash.
I am sure many builders and property investors, are salivating at Labors proposal, but they will be collateral damage if there is a recession.

IMO
The only way to increase living standards, is by increasing poor peoples wealth, the best to do that is by encouraging them to buy their own home.
Be that through investing, or direct ownership, it has been proven the best thing a retiree can have is their own home debt free.
The problem is, the symptom is being addressed not the problem, with Labors proposal.

I still fail to see whatever you think is a solution, other than don't change anything as it might effect me.

Current situation, one of highest privately indebted per ca pita in the world. where is all this debt, property, has it benefited society and community no. Is it productive? NO

A recession is like a flood down a river, you cannot stop it and it is a natural cycle, cleans out the dead and replenishes with new. We havn't had one in 30 years, because govnuts keep damming the river (economic cycles).

Sorry to say this old man, but it seems you are just dirty that you should have more out of life, and maybe that is the difference between us, I am happy living in great community with little, as I require only happiness, friends and family. Wealth as it seems to be defined is nothing to do with how much or how many properties you own.

Again, housing is for shelter, one of the 4 basic requirements in life, and supporting any policy that will allow people to obtain it is a good thing.

 

[qldfrog]

Strongly agreed and I expect there would be a valid role for experts in other fields too for the same reason.

And my apologies for being off topic here.

 

[sptrawler]

I still fail to see whatever you think is a solution, other than don't change anything as it might effect me.

I guess that is the difference between us, you see it as black and white, leave it as it is or do what Labor say's.

I think there would be a mirriad of solutions, which can be enacted, and would be far more beneficial to Australian society.
Also I'm not arrogant enough, to think I could come up with the best solution, however I do believe there are people smart enough to come up with better solutions.
The first thing to work out is who you are trying to help, IMO Labor are helping the wealthy, with their proposal.
Not only are they only going to make it, so that only the well off can invest in a property, they are even going to give them subsidies to rent them out as well as the negative gearing.

https://theconversation.com/shortens-subsidy-plan-to-boost-affordable-housing-108881

So not only can you negative gear, you can get an $8,500 payment, for 15 years.

Now to me with my obvious limitations, I see that as just another perk for the rich.
If the Government wants to help the poor, IMO it isn't by subsidising thier rent, it should be focused on helping people get into their own homes and off the rental trap.
Subsidising their rent for 15 years, is like giving a gambler a discount at the casino, it just reinforces their vulnerable position.

Why not have a system, where the Government lets low income workers, have a tax deduction on their home loans.
Why not have a system, where if companies build low cost social housing, the Government puts in the $8500/PA for 15 years in a joint purchase plan with a low income earner. They just have a caveat on the property, that if it is sold, the Government gets a part or all of their contributions back. Then that money can be re lent to others less fortunate.

Like I said, it isn't rocket science, it just depends on the outcome you want, poor people owning houses or Government rental subsidy for life.

The only people who benefit greatly from Labors policy, is builders and people who have the money to afford to build a rental from scratch.
The people who gain nothing, are low income earners and renters.
Like I said only my opinion
By the way I don't own a rental property, am retired and do share my house with extended family.

 

[SirRumpole]

The only people who benefit greatly from Labors policy, is builders and people who have the money to afford to build a rental from scratch.

Do you have an objection to helping the building industry ?

All those brickies, electricians, tilers, plumbers, carpenters, painters etc that the industry employs ?

Investors who bought established houses did nothing to help them, but that is what ng was designed for in the first place, to keep the building industry going as well as adding to the stock of homes.

 

[sptrawler]

Do you have an objection to helping the building industry ?

All those brickies, electricians, tilers, plumbers, carpenters, painters etc that the industry employs ?

Investors who bought established houses did nothing to help them, but that is what ng was designed for in the first place, to keep the building industry going as well as adding to the stock of homes.

I'm a bit shocked, you don't see my point of view, I thought you would agree. Oh well.
I guess being rusted on causes anguish.

 

[qldfrog]

[QUOTE="SirRumpole, post: 1009197, member: 58631",]

..it that is what ng was designed for in the first place, to keep the building industry going as well as adding to the stock of homes.[/QUOTE]
I do not often disagree with sir rumpole but i naively thought that negative gearingvwas just the simpler fact that, if you do an investment..any investment business shares building and are taxed on profit, the basic rule of taxation is that you should be able to offset the cost of that investment.
Otherwise investment diseappear

As i note before, ng will only be used if it makes sense aka in a raising market or if rental income is worthwhile.why would you loose money purposely?
To paraphrase
You need to have your head checked if you pay more tax than you need,
But similarly, you need to have a check if you are happy to loose money to pay less taxes.
A lot of talking for a problem which may sort itself alone pretty quickly with a real estate crash
My 2c

 

[SirRumpole]

I'm a bit shocked, you don't see my point of view, I thought you would agree. Oh well.
I guess being rusted on causes anguish.

I might agree with your point of view if I knew what it was.

You seem all over the shop. NG is there to increase housing supply to to provide a tax dodge for those who can afford their own house and someone else's as well.

So if the government saves $3 billion a year by cutting down NG and puts that into subsidised rents as you suggested, would that be a bad thing ? (Maybe only if Labor thought of it. )

 

[sptrawler]

I might agree with your point of view if I knew what it was.

You seem all over the shop. NG is there to increase housing supply to to provide a tax dodge for those who can afford their own house and someone else's as well.

So if the government saves $3 billion a year by cutting down NG and puts that into subsidised rents as you suggested, would that be a bad thing ? (Maybe only if Labor thought of it. )

Fair enough, like I said, it depends what outcome you are chasing.

 

[PZ99]

If offsetting debt must be a burden on the taxpayer I'd rather it be for something more useful than housing.... such as small business debt. Business employs people. Housing doesn't.

 

[SirRumpole]

Business employs people. Housing doesn't.

Building and maintaining and renovating housing employs a lot of people and creates a lot of businesses.

 

[Darc Knight]

Yes, and when people build new Houses they tend to buy new furniture etc, stimulating the retail and manufacturing sectors.

"That’s because people who buy or build homes tend to head to the shops next to buy things to fill their new house."
https://amp.news.com.au/finance/bus...s/news-story/98bb7283570e6c4d4bf3e3b583684c01

 

[willy1111]

So if the government saves $3 billion a year by cutting down NG and puts that into subsidised rents as you suggested, would that be a bad thing ? (Maybe only if Labor thought of it. )

Maybe it would be better used to help those who don't have a home get one rather than handing it to the investors investing in property.

Like a government loan scheme in some form or another, or government owns x% of the house to be repaid when said house is sold...use it to get the pemanent renters out of the forever renters cycle as opposed to giving it to property investor.

 

[PZ99]

Building, maintenance, renovations and associated retail all happen without the impetus of NG.

Currently my taxes are paying for a scheme where investors go into huge housing debt where in some cases they sit on empty houses solely to deduct their income. Not much employment there.

To me it's a bit self defeatist because all I'm really doing is sponsoring someone else's lifestyle.

I'd rather sponsor employment directly by having that $3b a year go into lowering business tax.

 

[Darc Knight]

I'd rather sponsor employment directly by having that $3b a year go into lowering business tax.

Pretty sure that trickle down economics theory isn't sound

 

[PZ99]

Pretty sure that trickle down economics theory isn't sound

If we are saying NG stimulates employment it's trickle down economics either way.

 

[Darc Knight]

If we are saying NG helps employment it's trickle down economics either way.

I think they said U.S. Comp Tax cuts won't flow through as much as people expect.

 

[PZ99]

I think they said U.S. Comp Tax cuts won't flow through as much as people expect.

No argument there. I'm talking more about using the saved money to kill off payroll taxes or something similar. During the GFC the WA Liberal Govt rolled back payroll tax and it worked from what I read.

Unlike the US Australia doesn't make anything anymore. So we are mostly a services economy and as such rely on small business. And they rely on keeping operating costs low.

In my view it's a more productive way of dispersing tax revenue rather than paying for someone's housing debt (which then mostly goes to the banks anyway)