The Great Aussie Housing Bubble - Reality or Fantasy?

[sptrawler]

..
50 odd years of very poor policy work to get us to this inequitable situation; let's hope we can fix it in less.

The States are taking the initiative, which isn't a good look, when it will just end up as another lopsided result, it is a national problem not a State problem.
This is becoming a trend.

https://www.heraldsun.com.au/news/v...s/news-story/9b8b9f229f2ec666bedeffa3aef6d1f1

Holiday home tax to triple after three years under deal between Allan government, Greens​

Land tax will be tripled on Victorian homes that remain unused for three years under a deal struck between the Allan government and the Greens.

 

[divs4ever]

Holiday home tax to triple after three years under deal between Allan government, Greens​

Land tax will be tripled on Victorian homes that remain unused for three years under a deal struck between the Allan government and the Greens.

had no desire to reside nor invest in Victoria anyway

i just hope they don't expect the rest of Australia to bail them out ( imagine if all those homes were occupied and drawing power from the grid )

 

[farmerge]

had no desire to reside nor invest in Victoria anyway

i just hope they don't expect the rest of Australia to bail them out ( imagine if all those homes were occupied and drawing power from the grid )

Is Victoria a basket case or is it a case of the bottem of the basket has gone and this State is now in free-fall.

 

[TimeISmoney]

The States are taking the initiative, which isn't a good look, when it will just end up as another lopsided result, it is a national problem not a State problem.
This is becoming a trend.

https://www.heraldsun.com.au/news/v...s/news-story/9b8b9f229f2ec666bedeffa3aef6d1f1

Holiday home tax to triple after three years under deal between Allan government, Greens​

Land tax will be tripled on Victorian homes that remain unused for three years under a deal struck between the Allan government and the Greens.

You may as well be a bum in this country because that's where they want everyone to be, they're going to tax the crap out of anyone that owns something extra.

 

[divs4ever]

You may as well be a bum in this country because that's where they want everyone to be, they're going to tax the crap out of anyone that owns something extra.

well that is how the Socialist dream ends up ( except for a few elite party officials )

Orwell's Animal Farm kind of sums it up

 

[Smurf1976]

Putting aside the politics, the one thing that concerns me most about housing from a purely investment perspective is just that. It's become so political.

That's not denying the history of growth. Just that I'm always a bit wary of investing in anything that's a focus of politics. It's an added risk basically.

 

[TimeISmoney]

well that is how the Socialist dream ends up ( except for a few elite party officials )

Orwell's Animal Farm kind of sums it up

The Greens are on a resi investor sites with legal aid lawyers attacking them every day, they want to bring in new laws where pensioners have to disperse their assets like homes around and above the 1 mil mark before they go on the pension. So working hard and saving will not pay off in the future. Labor has always been hopeless at running an economy, they're just desperate to find money to fund their crazy Robinhood ventures.

You have to be crazier than what they are to hold a rental these days, by the time you go through all the legal avenues to remove a tenant that hasn't paid rent it could be up to 3 months, and by that time, they could have punched a hole in every room of the house or burnt your house down. Insurances are looking at every avenue to sidestep paying out, so one mistake from a property manager could void an insurance claim.

 

[Value Collector]

The Greens are on a resi investor sites with legal aid lawyers attacking them every day, they want to bring in new laws where pensioners have to disperse their assets like homes around and above the 1 mil mark before they go on the pension. So working hard and saving will not pay off in the future. Labor has always been hopeless at running an economy, they're just desperate to find money to fund their crazy Robinhood ventures.

You have to be crazier than what they are to hold a rental these days, by the time you go through all the legal avenues to remove a tenant that hasn't paid rent it could be up to 3 months, and by that time, they could have punched a hole in every room of the house or burnt your house down. Insurances are looking at every avenue to sidestep paying out, so one mistake from a property manager could void an insurance claim.

It does make sense to me that if you have over $1 Million locked up in a home you should be drawing off some of that value before you begin drawing a pension from the government.

I Mean the pension isn’t there to fund your kids inheritance, I think of you are on the age pension the basic plan should be to “die with zero” exhausting all your assets by the time you are 95 or so, including your home.

If you die early or have large assets your kids get an inheritance, but if you plan to claim a full pension for 30 years of your retirement, and never sell your home just so your kids can inherit a $1 Million + dollars, I think you are not doing it fairly.

 

[TimeISmoney]

It does make sense to me that if you have over $1 Million locked up in a home you should be drawing off some of that value before you begin drawing a pension from the government.

I Mean the pension isn’t there to fund your kids inheritance, I think of you are on the age pension the basic plan should be to “die with zero” exhausting all your assets by the time you are 95 or so, including your home.

If you die early or have large assets your kids get an inheritance, but if you plan to claim a full pension for 30 years of your retirement, and never sell your home just so your kids can inherit a $1 Million + dollars, I think you are not doing it fairly.

Just imagine being at the end of your last living days in your family home that you've kept for the last 60 or so years and being told you have to leave. It really isn't their fault that house valuations have climbed so far. These people could have gone on holidays every year and blown their money when they were in their youth and relied on the govt for social housing like their other counterparts did but they chose not to.

These are people who have lived through wars and depressions and worked in environments with limited health and safety regulations. Displacing them at such an old age is no way to reward them, their mental health and their support systems would all center around their home or they would have left years ago.

 

[Value Collector]

Just imagine being at the end of your last living days in your family home that you've kept for the last 60 or so years and being told you have to leave. It really isn't their fault that house valuations have climbed so far. These people could have gone on holidays every year and blown their money when they were in their youth and relied on the govt for social housing like their other counterparts did but they chose not to.

These are people who have lived through wars and depressions and worked in environments with limited health and safety regulations. Displacing them at such an old age is no way to reward them, their mental health and their support systems would all center around their home or they would have left years ago.

You don’t have to leave your family home, you could just reverse mortgage it. Centre link could even design a system where you can stay in your home till you die and the some of the pension you get paid is claim back out of your estate, they could even pay people over sized pensions that way.

You’re right it’s not their fault property valuations have gone up, and it’s not their kids hard work either, so why should the tax payers fund some ones parents retirement just to preserve the equity in a house for the kids?

A home is still a private asset that should be used before the public purse is tapped. You can set certain valuations where benefits are reduced etc.

I am in the category where I will never benefit from any sort of age pension, I am fine with that.

 

[TimeISmoney]

You don’t have to leave your family home, you could just reverse mortgage it. Centre link could even design a system where you can stay in your home till you die and the some of the pension you get paid is claim back out of your estate, they could even pay people over sized pensions that way.

The problem with that is if they live longer than they think they could run all the equity out of the home and if the value of the house drops they could end up at a point where they have nowhere to live. The people who want to pass on wealth to their kids, will just pre-plan way before retirement in any case, sell up, blow the lot then go on the pension. These people took on the risk to buy the home in the first place, not the govt, it's their money and let them do what they want with it. It's just another brain fart from the Greens, this money belongs to the people who earnt it, not a government that can't manage money.

 

[Value Collector]

The problem with that is if they live longer than they think they could run all the equity out of the home and if the value of the house drops they could end up at a point where they have nowhere to live. The people who want to pass on wealth to their kids, will just pre-plan way before retirement in any case, sell up, blow the lot then go on the pension. These people took on the risk to buy the home in the first place, not the govt, it's their money and let them do what they want with it. It's just another brain fart from the Greens, this money belongs to the people who earnt it, not a government that can't manage money.

The vast majority of reverse mortgages say you can live in the house for life. Also once your equity comes down below the cut off, you would qualify to draw more aged pension. Not to mention your house could continue rising in value.

——————————

Think of it this way, if a renter owned $1.5 Million of shares, should they be allowed to draw and aged pension? Or should they live off some of their shares?

If you think a renter that owns $1.5 Milion of shares should start using their shares to live off before they draw a pension, why shouldn’t some one with $1.5 Million of home equity use some of that equity?

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I don’t see a difference between some one that blows their money to get the aged pension, and some one that holds on to their equity and draws the aged pension.

Both are drawing the pension when they didn’t need to, one blows the money themselves, the other wills it to their kids to blow when they die.

 

[TimeISmoney]

If you think a renter that owns $1.5 Milion of shares should start using their shares to live off before they draw a pension, why shouldn’t some one with $1.5 Million of home equity use some of that equity?

Most retired people bought their personal residence to live in years ago so that they didn't have to rent, renting in many cases was cheaper but they had stability and the freedom to do what they liked to the property. The large increase in the monetary value was unforeseen by many in the early days, property prices in Australia were pretty much stagnant for years.

Shares on the other hand are there for outright profits.

What's going to cost the Govt more at the end of the day, paying the pension to someone who lives in their home or paying the pension to someone who needs social housing supplied as well? People will just adjust prior to retirement, they might catch out a few in the beginning but the rest will learn from it and adjust.

 

[StockyGuy]

To the topic VC and TIM are discussing, I think common sense says at SOME point it's reasonable to expect people to access equity / downsize. VC's earlier example of 1 mill is too low in today's inflation-devalued money - his next example where he re-tooled to make it $1.5 million is getting warmer IMO.

I don't think many would argue that anyone with a fully owned property realistically worth over say $10 or 15 million should be an old age pensioner. Probably not a large number like that - but no doubt some. In the end, quite probably too small a problem to even stuff around with - for admin reasons.

 

[divs4ever]

You don’t have to leave your family home, you could just reverse mortgage it. Centre link could even design a system where you can stay in your home till you die and the some of the pension you get paid is claim back out of your estate, they could even pay people over sized pensions that way.

You’re right it’s not their fault property valuations have gone up, and it’s not their kids hard work either, so why should the tax payers fund some ones parents retirement just to preserve the equity in a house for the kids?

A home is still a private asset that should be used before the public purse is tapped. You can set certain valuations where benefits are reduced etc.

I am in the category where I will never benefit from any sort of age pension, I am fine with that.

don't bet on that

there will be a government policy that needs all your accumulated wealth ( coming soon )

also after you have scrimped and saved to pay out your home mortgage why would you jump back into a reverse mortgage wouldn't you have been better to just have an 'offset account ' and and have an interest only mortgage ( that you never pay out ) if you are going to treat your residence as a piggy bank not an asset

 

[Value Collector]

Most retired people bought their personal residence to live in years ago so that they didn't have to rent, renting in many cases was cheaper but they had stability and the freedom to do what they liked to the property. The large increase in the monetary value was unforeseen by many in the early days, property prices in Australia were pretty much stagnant for years.

Shares on the other hand are there for outright profits.

What's going to cost the Govt more at the end of the day, paying the pension to someone who lives in their home or paying the pension to someone who needs social housing supplied as well? People will just adjust prior to retirement, they might catch out a few in the beginning but the rest will learn from it and adjust.

You are dodging the question.

It doesn’t really matter why a person decided to buy a home vs shares.

The question is, are you ok with someone that owns $1.5 Million is shares collecting the pension?

Is there really any difference? they could sell their shares and buy a $1.5 Million home the next day.

————————

The simple fact of the matter is we either believe a person with substantial private assets should draw them down before collecting the pension or we don’t.

How those assets are held whether it’s cash, shares or a home is basically irrelevant, they can’t take the house with them when they die, they may as well draw some equity out of it.

Other wise we should just drops all means testing and give everyone the age pension.

 

[againsthegrain]

You are dodging the question.

It doesn’t really matter why a person decided to buy a home vs shares.

The question is, are you ok with someone that owns $1.5 Million is shares collecting the pension?

Is there really any difference? they could sell their shares and buy a $1.5 Million home the next day.

————————

The simple fact of the matter is we either believe a person with substantial private assets should draw them down before collecting the pension or we don’t.

How those assets are held whether it’s cash, shares or a home is basically irrelevant, they can’t take the house with them when they die, they may as well draw some equity out of it.

Other wise we should just drops all means testing and give everyone the age pension.

The only difference is the home you live in is not a investment vehicle.

Cash and shares will generate some annual returns, a roof over your head is shelter

 

[TimeISmoney]

You are dodging the question.

It doesn’t really matter why a person decided to buy a home vs shares.

The question is, are you ok with someone that owns $1.5 Million is shares collecting the pension?

Is there really any difference? they could sell their shares and buy a $1.5 Million home the next day.

————————

The simple fact of the matter is we either believe a person with substantial private assets should draw them down before collecting the pension or we don’t.

How those assets are held whether it’s cash, shares or a home is basically irrelevant, they can’t take the house with them when they die, they may as well draw some equity out of it.

Other wise we should just drops all means testing and give everyone the age pension.

It is different, no matter what, you need to rent or buy a home to have a roof over your head. You don't need shares to live or to have an income.

As I tried to explain to you the govt will not win here, the taxpayer will pay for more people going into social housing. People aren't inept in figuring out that if their neighbour squanders the value of their home through a reverse mortgage due to being kicked off the pension it would be smarter to spend the money on yourself than to struggle and save up for a home in the first place. I'd rather pass on my assets to my kids than give them to the govt after years of working hard and paying taxes.

 

[againsthegrain]

It is different, no matter what, you need to rent or buy a home to have a roof over your head. You don't need shares to live or to have an income.

As I tried to explain to you the govt will not win here, the taxpayer will pay for more people going into social housing. People aren't inept in figuring out that if their neighbour squanders the value of their home through a reverse mortgage due to being kicked off the pension it would be smarter to spend the money on yourself than to struggle and save up for a home in the first place. I'd rather pass on my assets to my kids than give them to the govt after years of working hard and paying taxes.

Its not much motivation for the current generation to work, if you take out a mortgage for 1m pay it off by 60, then you go to retire and are forced to reverse mortgage it... you ask yourself what is the point I might as well hit clink up and try find housing comission, guaranteed pension + housing

 

[Value Collector]

also after you have scrimped and saved to pay out your home mortgage why would you jump back into a reverse mortgage wouldn't you have been better to just have an 'offset account ' and and have an interest only mortgage ( that you never pay out ) if you are going to treat your residence as a piggy bank not an asset

That’s like saying “after you have scrimped and saved to buy $1.5 Million of shares, why would you want to sell them”

The answer is to feed yourself, and give yourself a decent standard of living without having to work.

Why should the tax payer help fund your child’s inheritances, as I said I would be happy with some sort of claw back deal where the government takes so of your home equity when you pass away.