The future of Australian property prices

[sptrawler]

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.

It's simple really, the reason Governments don't want to do anything about investors and negative gearing is, if investors don't supply and look after social housing the Government has to.
The last thing Governments want to do is get back into looking after tenants, they then have to supply maintenance crews, account keeping and last but not least newspapers full of bitching tenants, it took 30 years for Governments in Australia to sell and move tenants into the private sector the last thing they want is to get them back. ?
The worst tenant in Australia, will have no trouble getting bond and rent assistance.
Also if there was no tax offset and no capital gain, the last gig I would get into is being a landlord.

 

[MovingAverage]

"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.

Spot on.

Too many people have too much wealth tied up in property. Like it or not--it is now the Australian dream for a lot of Australians to own an investment property or two. Talk from all political parties about fixing the issue is nothing more than populist lip service so they can tick the "we are concerned" box.

 

[SirRumpole]

"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 have perfectly stated the essence of the problem.

However, what did you make of Labor's negative gearing proposals at the last election ?

 

[JohnDe]

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.

That is what the Labor party tried to articulate at the last election, it didn't work out because there are a lot of voters that have benefitted or want to benefit from negative gearing.

AS sptrawler said - "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."

 

[SirRumpole]

It's simple really, the reason Governments don't want to do anything about investors and negative gearing is, if investors don't supply and look after social housing the Government has to.

Do you REALLY think that investors are going to 'look after' social housing ?

Where's the return in leasing out expensive properties to single mothers or low income earners ?

C'mon, get real.

 

[sptrawler]

You have perfectly stated the essence of the problem.

However, what did you make of Labor's negative gearing proposals at the last election ?

The problem with Labor's proposal last election was, they weren't getting rid of negative gearing, they were making it so only the rich who could afford to negative gear. It was only stopping negative gearing on established houses, so it would have distorted the market IMO, the rich would have bought up cheap housing stock and land banked it.
Then built to rent, which would have controlled supply and prices IMO.
The end result with Labor's policy IMO, would have been, the gap between rich and poor would have become a chasm because the price difference between established and new build would have widened.
As usual with Labor, I think the intent was good, but I think the implementation would have ended up a disaster.

 

[MovingAverage]

The problem with Labor's proposal last election was, they weren't getting rid of negative gearing, they were making it so only the rich who could afford to negative gear. It was only stopping negative gearing on established houses, so it would have distorted the market IMO, the rich would have bought up cheap housing stock and land banked it.
Then built to rent, which would have controlled supply and prices IMO.
The end result with Labor's policy IMO, would have been, the gap between rich and poor would have become a chasm because the price difference between established and new build would have widened.
As usual with Labor, I think the intent was good, but I think the implementation would have ended up a disaster.

Their proposal was nothing more than putting lipstick on a pig...still a pig.

 

[sptrawler]

Do you REALLY think that investors are going to 'look after' social housing ?

Where's the return in leasing out expensive properties to single mothers or low income earners ?

C'mon, get real.

The best return for investors, is buying 10 middle class houses for $300k and renting them for $400/wk.
It isn't buying one $3m house and renting it for $1,500/wk.
That's getting real.

 

[SirRumpole]

The problem with Labor's proposal last election was, they weren't getting rid of negative gearing, they were making it so only the rich who could afford to negative gear. It was only stopping negative gearing on established houses, so it would have distorted the market IMO, the rich would have bought up cheap housing stock and land banked it.
Then built to rent, which would have controlled supply and prices IMO.
The end result with Labor's policy IMO, would have been, the gap between rich and poor would have become a chasm because the price difference between established and new build would have widened.
As usual with Labor, I think the intent was good, but I think the implementation would have ended up a disaster.

Maybe they should have just put a limit of one negatively geared property per taxpayer. That would cut down on the 'rich getting richer' problem, but still leave the way open for a steady supply of rentals.

 

[MovingAverage]

If we ever get proper tax reform in this country (I put a million dollars on the fact we won't) then maybe, just maybe, this issue will get some proper attention and not just superficial lip service come election season.

 

[sptrawler]

Maybe they should have just put a limit of one negatively geared property per taxpayer. That would cut down on the 'rich getting richer' problem, but still leave the way open for a steady supply of rentals.

Now you are talking, Labor not only was suggesting only negative gearing new builds, but also paying an annual bonus for renting at 20% below market rate, all that would have done is drive up the market rate by 20%.
As someone has already said negative gearing is a wealth creator, putting a lid on the value of property that can be negative geared would fix it, but why do politicians go into politics? Money and perks?
If they put a dollar value on how much can be negative geared, or made it so that negative gearing can only offset the rental earnings, that would sort it out.IMO

 

[MovingAverage]

That would cut down on the 'rich getting richer' problem

I think if this issue is to be properly addressed then the class warfare narrative has to stop. The issue is making housing affordable NOT about stopping the rich from getting richer.

 

[sptrawler]

I think if this issue is to be properly addressed then the class warfare narrative has to stop. The issue is making housing affordable NOT about stopping the rich from getting richer.

Absolutely, the only problem is Sydney/Melbourne has become the best investment vehicle in Australia, if not the World. Then it becomes about, what is the underlying business, the taxpayer is subsidising .
When a person can purchase a $2m property at 5% and have $100k interest, rent say $20k, nice offset against personal income tax.
Now if that person could only claim the $20k offset against the rent, the $80k interest shortfall would come out of the investors pocket, I'm sure the investor wouldn't pay $2m on those numbers.

 

[qldfrog]

Maybe they should have just put a limit of one negatively geared property per taxpayer. That would cut down on the 'rich getting richer' problem, but still leave the way open for a steady supply of rentals.

I am afraid you are (all) looking at this with the rear mirror; look at Europe for a look at the future, then decide you want any rental property in your portfolio;
Get out while you can irrespective of actual asset value IMHO

 

[sptrawler]

I am afraid you are (all) looking at this with the rear mirror; look at Europe for a look at the future, then decide you want any rental property in your portfolio;
Get out while you can irrespective of actual asset value IMHO

So true.

 

[MovingAverage]

I am afraid you are (all) looking at this with the rear mirror; look at Europe for a look at the future, then decide you want any rental property in your portfolio;
Get out while you can irrespective of actual asset value IMHO

Knowing very little about the EU market, is there anything specifically you see in Europe as being the harbinger of doom for the Australian market?

 

[sptrawler]

Knowing very little about the EU market, is there anything specifically you see in Europe as being the harbinger of doom for the Australian market?

France to simplify squatter eviction for second home owners

Evicting illegal squatters from your property is set to become easier in France as the government works to simplify and speed up the process for both main and second homes.

www.connexionfrance.com

Second homes​

The aim is not only to enable property owners to evict illegal squatters more quickly - within around 72 hours - but also to remove the legal differences between main homes and second homes. Currently, the law only allows the eviction process to be fast tracked if the property in question is the owner’s main home.

In contrast, under the current laws, if a second home is squatted for more than 48 hours - which is more likely, as second homes are more often left empty for longer periods of time - the legal process of eviction can take months, and cost several thousands.

Squatters in Spain

A guide to squatters in Spain: The size of the threat, types of squatters in Spain, and what to do if your Spanish property is taken over by squatters.

www.spanishpropertyinsight.com

 

[qldfrog]

Knowing very little about the EU market, is there anything specifically you see in Europe as being the harbinger of doom for the Australian market?

Yes pro tenant/pro squatter legislation to a point people here can not even comprehend , higher taxes..already started here where rental property attract higher rates,vetc..do not own to rent

 

[sptrawler]

Yes pro tenant/pro squatter legislation to a point people here can not even comprehend , higher taxes..already started here where rental property attract higher rates,vetc..do not own to rent

The say South Africa is fun, I used to work with a few SA guys, they were pleased to be out.

https://www.legalwise.co.za/help-yourself/quicklaw-guides/evictions:

5. What will the court consider before granting an eviction order?​

• The court will consider whether the occupier is in fact an unlawful occupier and whether the landlord has followed the procedure provided for in the PIE Act.
• If the unlawful occupier has been in occupation of the property for LESS than six months, the court will also consider the following:
  • all relevant circumstances, including the rights of the elderly, children, disabled persons and households headed by women; and
  • whether it will be just and equitable to grant an eviction order.
• If the unlawful occupier has been in occupation of the property for MORE than six months, the court will also consider the following:
  • all relevant circumstances including, the rights of the elderly, children, disabled persons and households headed by women;
  • whether alternative accommodation has been made available or can reasonably be made available by a municipality, organ of state or an owner of property, for the relocation of the unlawful occupier; and
  • whether it will be just and equitable to grant an eviction order.
• After considering the above and if the unlawful occupier/s has no valid defense, an eviction order may be granted by the court and will specify:
  • the date on which the unlawful occupier/s must vacate the property;
  • the date on which the sheriff must evict the unlawful occupier/s from the property, if s/he has not yet vacated the property on the date determined by court.

 

[JohnDe]

So true.

I have family in Europe, property investing can be profitable just as it can be here. Of course they have rules that we don’t understand or think frustrating, but it’s all about knowing the market.