This is a mobile optimized page that loads fast, if you want to load the real page, click this text.

The future of Australian property prices

Jump to new

My work allows me to meet a lot of people each day from all sorts of backgrounds. Young adults living with parents and others moving out, new Australian citizen's, workers, business owners, retired, and so on. Buying a home has always been the biggest and hardest purchase.

There are several differences today that influences a persons capability to purchase a property.
Negative gearing has allowed older generations to purchase investment properties, they can get loans easier and for larger amounts using their current home as collateral. This reduces the number of saleable properties available, which increases prices.

The other issue, people wanting to have all the mod cons; the dishwasher, gourmet kitchen, landscaping and so on.

Another issue is location, many want to live in or near established suburbs. There are many low cost homes in other suburbs, which can be used as a stepping stone.

toys; people spend their money on new phones with expensive plans, streaming services, expensive cars, boats. holidays.

Previous generations have sacrificed to be able to buy a home and look after a family. There are still people quietly getting on with buying a property while sacrificing luxuries and location.
 
My guess is personal income taxes are on a downward trajectory, the only tax they really have that can cover this mess is GST, the States have to agree but I don't think there are many options with the deficit trajectory.
It is either hit everybody with more GST, or hit the mining companies with a volumetric materials tax, my money's on GST.?
Nothing else will raise enough money to scratch the surface of the deficit.
 
Leave inflation at 10pc, do not change IR, do not change tax brackets or GST, and the deficit is a non issue in 10y...
 

My nephew bought a block of land in a new suburb a way from his family. then he build a home and nothing else. when he and his girlfriend had some more savings they put in a driveway and a garden shed. soon after they put in a rear garden with an area for their son and a vegetable patch. last week they finished the front yard with lawn and a path. On friday they celebrated thier second sons birth. all happy as Larry
 

You've overlooked one major point. Not all investments (shares, houses, emu farms etc etc) are about generating income so on many occasions an investment is not about being positively geared. Lots of investments are about capital growth--which is what a lot (not all) of housing investors are chasing. What is often overlooked in the debate about negative gearing in investment properties is the CGT you pay on the way out.

I have recently offloaded an investment property in Sydney which was negative geared for many years (I'm very pro negative gearing and see nothing wrong with it). We have had relatively low interest rates for many many years with climbing rental yields so the fact is the negative gearing has been hardly worth the trouble. But trust me I am paying a truck load of CGT in July. The CGT I will be paying will more than offset any negative gearing "hand outs" the government has given me over the years.
 
qldfrog said:
No personal grief either just to be fully honest: i own house and land,
Click to expand...

So do I.

Don't pay rent. House is not that great but I get by.

My concern is for the future generations and the condition of the government's balance sheet.

The more people that own their own homes and are not dependent on the pension, the better.

Agree ?
 
Sounds similar to my situation, except even with the CGT I am long way in front.

Negative gearing is a wealth growth tool, that’s why it was introduced. It’s so good that there are people that build a large portfolio of properties which reduce the number of saleable homes, which is why Labour tried to change the rules to reduce CGT benefits for investors with the idea of allowing first home buyers into the market, but that backfired when the millions of negatively gear voters rebelled.
 
yes but unrealistic, you can not expect widespread house ownership when cost of house is 30% at least fees and extra gov parasiting costs
And the issue was the absence of rental..which is triggered by the move out of IP..the very one you blame
we do not have enough houses filling the demand that is as simple as that; not enough in the right places of what people want.if people wanted small houses, they would get it
 
basically focus should not be on welfare social housing but on providing ways for people to earn decent living vs costs, and that is going down the drain even faster than taxes rises
 

I agree with your statement about parasitic governments.

Perrotet had an idea of replacing up front stamp duty with 'Land Tax'. As long as that doesn't apply to currently owned houses it might be worth considering.

if people wanted small houses, they would get it

Not necessarily, developers basically dictate the size of the houses to make it more profitable for them, ie the bigger the better so they can inflate the price. What they should do is build more modular houses that are easier to extend later.
 
I don't disagree with you, I have owned plenty of investment properties and capital gain is what everyone is after.
But that is what is driving the prices and is soaking up a lot of wealth, that could be deployed into more productive investments.
Negative gearing just helps the system keep rolling along IMO, people can't rant and rave about the cost of property and in the next breath support the tax advantage that promotes the capital gain.
As with you I have sold out of investment property, it isn't an investment I was happy carrying in retirement, equities are a lot less trouble. ?
 

Another populist brain fart idea from the ALP to tackle housing prices. There is absolutely no way dropping the CGT discount (which is what I assume you're referring to) will resolve the affordability issue and take the heat out of the property market. Without the CGT discount you can still make enough money out of investment properties to make it a worthwhile investment and that will continue to attract investors.
 
Perfectly put.
 

Agree.

The problem I have is that if our governments really believed investors were the major driver of our spiraling house prices (I'm not entirely convinced the issue is that simple) and the governments actually gave a crap about first home buyers and affordability then why don't they just stop people buying investment properties? Either they believe investors aren't the problem, are making money out of investors or don't care about first home buyers.
 
"The government" is primarily made up of property investors, so is the opposition so no real difference who's in.

therefore the only thing that the government is interested in is continuing rising property prices.

And that's all she wrote folks.
 
You must log in or register to reply here.

Similar threads

3
Future of $100,000 overland tourer Aussie lifestyle and the EV era
2
Replies
21
Views
2K
qldfrog
A
The future of Astraya
2 3
Replies
45
Views
8K
SirRumpole
Ultimate Acronym List (UAL)
Replies
0
Views
5K
Dividend
A
Factors affecting property prices
Replies
3
Views
11K
Space Invader101
Australia's own Ponzi scheme: the property market
Replies
4
Views
5K
Glen48
Menu
Log in
Register
Cookies are required to use this site. You must accept them to continue using the site. Learn more...