Nailed it.Do you really believe negative gearing cost money to the government?
As a single line in the accounting sheet, yes, but this pushes RE prices up , with both ATO and states gorging on stamp duty, cgt on resale of ip and even local councils adding 3pc yearly increase (we are reasonable) to rates on a number jumping by 15pc a year: valuation
Look where the money is and then you understand why no politician is serious about RE affordability, they all have their heads in the gravy
in the same way as: do not fight the market/the feds for shares, do not fight the decision makers in Australia.get into RE.
At what size does it stop being social,I think NG is ok under 500k in WA anywayThat is true, if they wanted to prick the housing bubble, just crank up interest rates.
The problem with that, highlights my issue with negative gearing, if interest rates go up it affects home owners much more than investors as they can't write off their loses.
Negative gearing on residential property just encourages non productive investment, to supply social housing IMO.
The money would be better spent supplying industrial growth, that has a chance of employing people and maintaining living standards.
The Government should be supplying social housing and if they want to help people get into a house, possibly allow first home owners to negative gear their loan, not investors.
Or at least move in that direction, as is shown in Melbourne/Sydney, a lot of investment money is directed into property with no hope of it ever being positively geared and any losses are subsidised by the taxpayer. What is the point?
Just my thoughts and I'm no economist.
I agree taxpayer assistance should be for those who need it, not for property portfolio builders.At what size does it stop being social,I think NG is ok under 500k in WA anyway
I think money could of been spent on social housing rather than mansion renos
Ok...I concede.CBA raised their ‘assessment’ IR from 5.1% to 5.25% today. As I commented a few days ago, although they offer 2.1% they assess if the borrower can afford 5.25% now. That $800K house just got more expensive ....
Regardless of the immediate impact it has on prices, I see the fact of a very large bank having raised the interest rate they're basing it on upwards as being significant in itself.CBA raised their ‘assessment’ IR from 5.1% to 5.25% today.
Well for how long has the RBA been saying it wants inflation around 3%? It isn't as though blind Freddy couldn't see that interest rates at 0%, won't last forever.Regardless of the immediate impact it has on prices, I see the fact of a very large bank having raised the interest rate they're basing it on upwards as being significant in itself.
I actually found suburban Australians weird in their attitude to relocation.even within capital cities,staying often in same suburbs when moving.Well for how long has the RBA been saying it wants inflation around 3%? It isn't as though blind Freddy couldn't see that interest rates at 0%, won't last forever.
I mean really how can a capitalist system work, where borrowing money costs nothing?
At the end of the day, if people are prepared to pay stupid prices, to buy something that they could buy for a lot less in another location, they deserve to get burnt IMO.
Imagine if someone tried to sell a Toyota Corolla in Sydney for $100k, when you could buy the same car in Adelaide for $10k, everyone would say I'll go to Adelaide.
But tell them to buy a house with the same reasoning and they have a white out.lol
Cars can be transported, houses cannot.Well for how long has the RBA been saying it wants inflation around 3%? It isn't as though blind Freddy couldn't see that interest rates at 0%, won't last forever.
I mean really how can a capitalist system work, where borrowing money costs nothing?
At the end of the day, if people are prepared to pay stupid prices, to buy something that they could buy for a lot less in another location, they deserve to get burnt IMO.
Imagine if someone tried to sell a Toyota Corolla in Sydney for $100k, when you could buy the same car in Adelaide for $10k, everyone would say I'll go to Adelaide.
But tell them to buy a house with the same reasoning and they have a white out.lol
That's very true, but people can be transported, going down with the ship, is probably an outdated mantra.Cars can be transported, houses cannot.
I recall thinking circa 2003 that housing was getting out of hand and a correction would be imminent.how long can central Banks kick the can further and further down the road? Bloody hell of a lot longer than I ever thought possible.
I recall thinking circa 2003 that housing was getting out of hand and a correction would be imminent.
2003, that's a damn long time ago.
A child born in 2003 is now an adult.
A car made in 2003 is quite likely scrapped by now and if not then it's close to worthless.
Etc but the housing bubble has continued to inflate.
Sure but there's plenty of things beyond your control.That's very true, but people can be transported, going down with the ship, is probably an outdated mantra.
Whatever someone does for a living, if it isn't resulting in the outcome they want, they need to change something.
To keep trying to change the world around us to fit our desired outcome, usually isn't an option, I either adapt or reconfigure my situation.
One's opinion on that is most likely tied to one's position in the market and their emotional investment.It is not a bubble according to many
The introduction of CGT in 1985 would appear to have done absolutely nothing to tempter folks enthusiasm for investing in property. My personal opinion is that even if you removed all of the tax concessions currently available to RE investors I doubt in the long term it would take the heat out of the market. So long as people can make money out of RE on the backend then investors will always be in the market. My feeling is a lot of investors are focused in the cap gain and some of the tax concessions along the way (e.g neg gearing) are a nice little bonus along the way. Have a look at the ATO’s stats on CGT, a lot of people are making a lot of money off the sale and gain of property and the Gov makes considerably more of CGT to more than offset the current $10 bill it cost the ATO in IP deductions. Just my 2 cents.One's opinion on that is most likely tied to one's position in the market and their emotional investment.
By any objective assessment, it's a bubble.
The question people should ask themselves, is where would the market be without property welfare?
Negative gearing
Cap gains discount
Buyer/renovation grants
Artificially low (negative real) interest rates.
Ultra high immigration
(Actually I agree with very low/no cap gain tax if swapping one investment for another, but that's a discussion for another time)
It wouldn't be where it is, that is for sure.
You'll also notice that there's only the other tweaking around the edges type stuff that anyone in power is actually talking about.One's opinion on that is most likely tied to one's position in the market and their emotional investment.
By any objective assessment, it's a bubble.
The question people should ask themselves, is where would the market be without property welfare?
Negative gearing
Cap gains discount
Buyer/renovation grants
Artificially low (negative real) interest rates.
Ultra high immigration
(Actually I agree with very low/no cap gain tax if swapping one investment for another, but that's a discussion for another time)
It wouldn't be where it is, that is for sure.
You'll also notice that there's only the other tweaking around the edges type stuff that anyone in power is actually talking about.
(Because those tweaks will do absolutely **** all about the problem and they know it. It isn't a problem from their perspective.)
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