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The future of Australian property prices

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The suburb that I work in has had a lot of older buildings knocked down and 2 or 3 homes built on the block. Recently they have been squeezing 3 or 4 homes and even strata title townhouses with up to 7 residential structures.

During the past few weeks, I have noticed an increase in the speed of demolition, and build starts.

I think that we might be seeing the turning point, and in a few years the beginning of price decreases for rental, and possibly purchases. Sadly, this will be at the cost of homes with backyards.
 
JohnDe said:
I have noticed an increase in the speed of demolition, and build starts.
Click to expand...
I regularly go for a walk for exercise and when I go to an area that I haven't been to for a while there's almost always been something knocked down.

At the rate it's going, give it another 20 years and older houses on full size blocks will be genuinely rare and probably quite valuable as a result.
 
Smurf1976 said:
I regularly go for a walk for exercise and when I go to an area that I haven't been to for a while there's almost always been something knocked down.

At the rate it's going, give it another 20 years and older houses on full size blocks will be genuinely rare and probably quite valuable as a result.
Click to expand...
have be quick ( demolishing ) or you will get squatters ( or you will soon )
 
Smurf1976 said:
I regularly go for a walk for exercise and when I go to an area that I haven't been to for a while there's almost always been something knocked down.

At the rate it's going, give it another 20 years and older houses on full size blocks will be genuinely rare and probably quite valuable as a result.
Click to expand...
@JohnDe Well over here in WA the 1/4 acre block value is in the stratosphere dollar wise.
 
Well @Smurf1976 we did say a couple of years ago, this is what will get up the publics nose the most.
The problem is they have let it run and pump primed it with inflation and immigration, to the point it is going to be difficult to fix it without crashing the economy.
The elites will be happy, the silent majority will be angry.
It remains to be seen who can fix it, or indeed if it can be fixed, without widespread damage.
Hopefully someone has a plan. Lol


Cost of living pressures are top of mind for Australians, but one key area is weighing on households far more than any other, a new poll shows.
A Newspoll conducted for The Australian showed housing was of greatest concern for voters, far outstripping food costs and utility bills.
 
A few of my mates have sold or selling rentals that are in regular suburbs and converting what they have left in the suburbs close to tourist locations into Airbnb.

They have worked out that they can earn more for less hassle, and the extra income will help dull the pain of increasing expenses and the anxiety of not knowing what the governments next move against them is.

The PM has been challenged over the fact his repeated assertion he has ‘no plans’ to change negative gearing or capital gains tax is the same language he used prior to overhauling the stage-three tax cuts.​
 
JohnDe said:
A few of my mates have sold or selling rentals that are in regular suburbs and converting what they have left in the suburbs close to tourist locations into Airbnb.

They have worked out that they can earn more for less hassle, and the extra income will help dull the pain of increasing expenses and the anxiety of not knowing what the governments next move against them is.

The PM has been challenged over the fact his repeated assertion he has ‘no plans’ to change negative gearing or capital gains tax is the same language he used prior to overhauling the stage-three tax cuts.​
Click to expand...
Article in realestatedotcomdotau

The protagonist in the article, brings attention to what happened the last time negative gearing was abolished back in the Keating years - massively increasing rents.

And as John points out that will further decrease supply of rentals and discouragement in any new investment.

With only a few months to go to the election this seems to me to be an incredibly stupid move if they want any chance of reelection. If there is a silver lining, it may just cause these bastids to be voted the @#$& out.

www.realestate.com.au

Landlord warns ‘rents will explode’ if negative gearing is removed - realestate.com.au

Sweeping tax changes being considered by the government could decimate the housing industry and cost one investor up to $300,000, he believes.
www.realestate.com.au
 
wayneL said:
Article in realestatedotcomdotau

The protagonist in the article, brings attention to what happened the last time negative gearing was abolished back in the Keating years - massively increasing rents.

And as John points out that will further decrease supply of rentals and discouragement in any new investment.

With only a few months to go to the election this seems to me to be an incredibly stupid move if they want any chance of reelection. If there is a silver lining, it may just cause these bastids to be voted the @#$& out.

www.realestate.com.au

Landlord warns ‘rents will explode’ if negative gearing is removed - realestate.com.au

Sweeping tax changes being considered by the government could decimate the housing industry and cost one investor up to $300,000, he believes.
www.realestate.com.au
Click to expand...
Negative gearing 110 properties is a lot of tax payer funding, at the end of the day, tax incentives aren't meant to be there to allow irrational gearing, as Bond and Skase proved in the 1980's.

They are there to encourage investment in productive enterprise, which will eventually become positively geared and pay tax, IMO that article shows how much speculation is going on in property with little likely hood of becoming positively geared, if it was a company it sounds as though it would be trading while insolvent, because without the tax money they would be broke IMO.

An investment should stand on its merit, not on its tax break, as General Motors found out, there isn't a lot of difference between refusing to subsidise GM or subsidise property speculators, an investment should be based on return of capital not solely on the taxpayer paying half the loses.

This is yet another example of the failings of privatisation, when the Governments closed down their housing commission building sections and gave the responsibility of supplying social housing to the private sector.

Now the Government is proving the old saying, you can outsource your responsibility to other people, but you can't outsource your accountability when it goes pear shaped. :2twocents
 
Last edited:
sptrawler said:
Negative gearing 110 properties is a lot of tax payer funding, at the end of the day, tax incentives aren't meant to be there to allow irrational gearing, as Bond and Skase proved in the 1980's.

They are there to encourage investment in productive enterprise, which will eventually become positively geared and pay tax, IMO that article shows how much speculation is going on in property with little likely hood of becoming positively geared, if it was a company it sounds as though it would be trading while insolvent, because without the tax money they would be broke IMO.

An investment should stand on its merit, not on its tax break, as General Motors found out, there isn't a lot of difference between refusing to subsidise GM or subsidise property speculators, an investment should be based on return of capital not solely on the taxpayer paying half the loses. :2twocents
Click to expand...
100% agree, if you remember my previous posts on this topic. IMO rules surrounding property investment and trading profit losses should basically follow the same rules as normal business.

IE, there must be a reasonable prospect of a trading profit within a reasonable amount of time. Tax deductions for trading losses written in the same structure is completely fair but only on the proviso of the above, just as it is if someone started a business making tiddly winks, if the same structure as other income. If in a separate structure then losses can only be carried forward against future profits. Intentional loss making ventures for the purposes of tax minimization are not allowed in normal business.

However we are in this situation now where we have a housing/renting crisis and any drastic changes but at this point in time will have a profoundly negative effect
 
sptrawler said:
Negative gearing 110 properties is a lot of tax payer funding, at the end of the day, tax incentives aren't meant to be there to allow irrational gearing, as Bond and Skase proved in the 1980's.

They are there to encourage investment in productive enterprise, which will eventually become positively geared and pay tax, IMO that article shows how much speculation is going on in property with little likely hood of becoming positively geared, if it was a company it sounds as though it would be trading while insolvent, because without the tax money they would be broke IMO.

An investment should stand on its merit, not on its tax break, as General Motors found out, there isn't a lot of difference between refusing to subsidise GM or subsidise property speculators, an investment should be based on return of capital not solely on the taxpayer paying half the loses.

This is yet another example of the failings of privatisation, when the Governments closed down their housing commission building sections and gave the responsibility of supplying social housing to the private sector.

Now the Government is proving the old saying, you can outsource your responsibility to other people, but you can't outsource your accountability when it goes pear shaped. :2twocents
Click to expand...
The taxpayer is not paying half the loss but benefiting from the overall price increase of the assets.
Instead of wasting. Budget money on another energy green subsidy or ndis o,/S trip, the gov finds itself partner of an investment, be it RE, productive company or shares
If the investor negative gears and can not sell at a profit, he is not making money yet the bank will profit and taxes will be paid there..a lot
And the investor will still pay CGT on the asset sale 10y down the track even if the capital price increase is below inflation ( a loss for the investor yet taxed) .
Let's not repeat the BS from labour..with enough time, they become urban legend "Truth" among the challenged.
Sometimes i nearly wish Albanese carries on with negative gearing suppression just to see the state of the rental market within 3 y...
After all, crashing Australia a bit more won't make much more of a difference
 
qldfrog said:
The taxpayer is not paying half the loss but benefiting from the overall price increase of the assets.
Instead of wasting. Budget money on another energy green subsidy or ndis o,/S trip, the gov finds itself partner of an investment, be it RE, productive company or shares
If the investor negative gears and can not sell at a profit, he is not making money yet the bank will profit and taxes will be paid there..a lot
And the investor will still pay CGT on the asset sale 10y down the track even if the capital price increase is below inflation ( a loss for the investor yet taxed) .
Let's not repeat the BS from labour..with enough time, they become urban legend "Truth" among the challenged.
Sometimes i nearly wish Albanese carries on with negative gearing suppression just to see the state of the rental market within 3 y...
After all, crashing Australia a bit more won't make much more of a difference
Click to expand...
About some interesting reason why building seems so expensive
AFR
"Since 2014 labour productivity in the Australian construction sector has fallen 18.1 per cent. This is staggering."
www.afr.com

The answer to our housing crisis is three letters: EBA

For all the focus on the illegal activities of the CFMEU, it’s their legal activities that have played a starring role in our housing affordability crisis.
www.afr.com www.afr.com
Indeed 18% productivity loss in 10y
FFS...
 
wayneL said:
However we are in this situation now where we have a housing/renting crisis and any drastic changes but at this point in time will have a profoundly negative effect
Click to expand...
That's life, encouraging speculative investment with tax incentives, just reduces the available funds for productive investment, keeping negative gearing on high loss property investment will end up in tears one way or another.
The last two years of speculative investment has left a situation where there is no option than a shakeout, the longer they leave it, the worse the situation will get.
Even young people understand that.

Maybe If an investment property exceeds a certain negative return, it should be treated as a purely speculative investment and losses should only be able to be carried forward and used as an offset against any future capital gain
 

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