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The state of the economy at the street level

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qldfrog said:
Blood suckers..under the guise of helping the battlers..as if people having an Airbnb could or would just go to being landlords with pets, tenants doing their improvements then deciding not to pay..and with controlled ,government dictated , rent on the cards...
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It's a red herring, most of these B&Bs are in expensive areas or holiday areas, how many people will go there and find work or afford the living style of a holiday destination?

SirRumpole said:
Just remove negative gearing and CGT discounts on investment properties.

Like Labor wanted to do before they lost the election. :cool:
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Look at Germany they don't have rebates or Neg gearing for investors and something like 50% of the populace rent, Australia only has 33% renting. Removing Neg gearing will barely do anything other than a change to different hands of investors types. The biggest problem Australia faces is the building of new stock as the population grows, builders are going under and the cost of materials is sky high.
 
moXJO said:
Why are there so many jobs?
Is it because you need 2-3 millennial/gen z to replace a boomer or something
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3 to replace a speed freak ( substance-abuser ) in my experience and he was done ( finished and exhausted) by 2.30 pm , plenty of time to double-check the task and look for lost tools , to boot

but more likely they are all doing the extra layers of paperwork generated by ever-expanding government
 
TimeISmoney said:
72% of property investors own one investment property and most of them earn under 100k.

'46% of landlords did not claim a deduction for a loss on their rental property: these investors pay tax.'

https://www.beesnees.com.au/2023/05/rich-old-property-moguls-not-the-typical-landlord/?
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I don't think politicians make up 72% of property investors, so I fail to see the context with regard my post.

Also just because someone doesn't make a loss, doesn't mean that tax was paid on the rent, as would be the case if they owned the property.
Or if it couldn't claimed as a deduction, as Labor possibly was suggesting for established properties in the 2019 election.
So could you expand on what you are responding to, or are you just posting up a statement of fact?
 
sptrawler said:
I don't think politicians make up 72% of property investors, so I fail to see the context with regard my post.

Also just because someone doesn't make a loss, doesn't mean that no tax was paid on the rent, as would be the case if they owned the property or if it couldn't claimed as a deduction, as Labor possibly was suggesting for established properties in the 2019 election.
So could you expand on what you are responding to, or are you just posting up a statement of fact?
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I'm saying that there are not that many IP investors that have more than one IP like the Greens like to point out all the time, politicians have to disclose their interests also, and there aren't that many that are multiple holders either. Getting rid of rebates and or neg gearing will cause a bigger housing problem in the end.
 
JohnDe said:
In parts of Europe their superannuation companies build apartments for long term rental, people can rent their whole life without fear of being evicted because the owner wants to sell. This is what our governments should encourage, but the problem is that the return on investment isn’t as high as other investments, and we don’t like that. We need a change of attitude and understanding when it comes to rental investment & superannuation.
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Looks like things may change-

In Melbourne, large overseas superannuation and other international institutions are contracting to erect large “build for rent” developments, which will change the nature of apartment development there and later Australia.​

While the federal government is engaged in a classic Canberra money throwing exercise in trying to overcome the housing shortage, two entirely different but dramatic developments are taking place in Melbourne and Sydney.

In Melbourne, large overseas superannuation and other international institutions are contracting to erect large “build for rent” developments, which will change the nature of apartment development there and later Australia.

Sydney was rejected by the internationals because its land was too expensive and the state government and local council bureaucrats, working at boosting development costs, were too powerful.

But in a shock Sydney change, new NSW premier Chris Minns is canvassing stripping the costly restrictions and rules that plague Sydney apartment buildings in exchange for owners offering a 30 per cent reduction in rents for 15 years on the “low cost” developments.

It’s a radical plan that would see thousands of apartments built if the cost reductions are large enough to be make it economic.

Even harder to overcome will be the uproar created by the bureaucrats whose jobs depend on the restrictions.

The Melbourne developments are happening, while the Sydney plan is it the early stages of negotiation with Australia’s biggest apartment developer and owner, Harry Triguboff and his Meriton group.

I will start with Melbourne.

Australian superannuation funds are major property investors but have been in reluctant to join their overseas counterparts in developing “build for rent” apartment complexes along the lines popular in Europe and North America.

But the recent rent rises and the Australian housing shortages have caused a number of overseas institutions to transport their “build for rent” expertise down under.

In Melbourne, they found a series of sites where permission had been obtained to build conventional apartments where developers would sell around half the apartments “off the plan” and then the banks would fund the project with the pre-sales as security.

Projects structured this way were no longer attractive to apartment buyers given the rise in building costs and the uncertainties of construction, plus the doubtful end value of the units. And the banks weren't interested.

The overseas institutions purchased the dormant land in popular inner Melbourne suburban regions and converted the development permission that had been obtained into “build for rent” communities that will include family areas with swimming pools etc.

The one, two and three-bedroom apartments will all be rented, and the returns look good. Banks are lending to major overseas institutions, so are happy to provide half the funds.

Australia’s superannuation funds are battling with their exposure to office blocks and retail centres and are reluctant to launch into a new sector at this time, but if the overseas institutions are successful, Australians will almost certainly follow.

For many years, Sydney has been an international joke when it comes to apartments.

The land is made too expensive by the regulatory and approval nightmares that rank as some of the worst in the world.

Giant Chinese developers came to Sydney with high hopes, but could not make it work and retreated, incurring heavy losses.

Meriton has made it work because it has a large portfolio of apartments and its own building operation, but has now slowed developments to a level that enables managing director Triguboff to keep his building workforce employed.

Triguboff still has a large amount of land being blocked by the bureaucrats and has stopped buying new Sydney land – it’s too hard.

The Gold Coast is much easier.

But if the state government and local council rules and restrictions could be made workable, Meriton has large landholdings that could be converted to apartments at a fast pace.

Nevertheless, Meriton was stunned when a theoretical proposal was canvassed to streamline the approval, design and building process in exchange for 30 per cent reduction in market rents that would last for 15 years. Thereafter, market rents would be charged.

Those sorts of radical proposals sound good in theory, but are very difficult to arrange. For example, how would the rent be calculated; would there be reduction in crippling stamp duties plus other taxes and local government charges?

Would the NSW archaic requirement to dig a large hole for parking be replaced with parking on the lower floors?

Would approvals be given within six months instead of two years; Would the objection process be streamlined?

Would at least one garage per unit be allowed? And those restrictions are just the start of the Sydney apartment development bureaucratic nightmare.

The other aspect of the apartment development approval process in both Sydney and Melbourne is the difficult issue of separating affordable apartments for people like teachers, nurses, police and other employed people who are priced out of the market from those with virtually no employment income with deep social problems.

Back in the 1950s, Melbourne erected large apartment towers which were used by new arrivals as temporary accommodation. But now there is a long waiting list and once people obtain the accommodation in the towers they do not want to give it up.

Sometimes, but not always, the community created by having low income people in one place can result in unpleasant living. The towers become ghettos.

No property developer wants a ghetto in the middle of a project.

It is just possible that much of the large government handouts being given to states will end up being dominated by ghetto developments.

What the politicians in Canberra don’t realise is that private capital can be made to work in Melbourne and Sydney.

ROBERT GOTTLIEBSEN BUSINESS COLUMNIST
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TimeISmoney said:
I'm saying that there are not that many IP investors that have more than one IP like the Greens like to point out all the time, politicians have to disclose their interests also, and there aren't that many that are multiple holders either. Getting rid of rebates and or neg gearing will cause a bigger housing problem in the end.
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I agree with that, however I think the States should bring back their housing commissions, where the Govt actually employed the people to build social housing and owned and operated it.
It is like any essential service, the service has to be built before the population grows to require it, similar to the electricity network you don't wait until there isn't enough power to supply the people before you put in more, you install extra capacity in preperation for the increased demand, it's called planning.
The Govt knows how many extra immigrants they are going to allow to enter, they know how many people are on the waiting list, they have a fair idea of how much social housing is going to be required and when.
The private sector wait until the demand is there before installing extra dwellings, they would go broke otherwise and also they have no control over immigration.
The same goes for land releases, water and sewage, they all have to be planned and installed before the current systems are at capacity.
Delegating the social housing to the private sector, as with a lot of other services that have been privatised, it appears to be coming to its use by date.
Also IMO it isn't about how many properties people negative gear, it is about the cost to the taxpayer that the individual claims, for example 1 person owning 5 properties and only getting $2k of negative gearing, is a lot different from someone only owning 1 property worth say $15m and getting a $1m negative geared tax offset (just random figures for example purposes).
The other problem with negative gearing and investment residential property is, negative gearing is meant to assist an investor during the early phase, in the expectation that the business will become positive geared and then pay tax, a lot of investment properties don't work on that premise they are bought at a ridiculously high purchase price with the expectation of a capital gain.
Therefore it falls under the umbrella of a speculative investment IMO and really losses should only be able to be carried forward, as an offset against a capital gain IMO.
But everyone has their own take on it.

By the way here is an article on how many investment properties politicians own.
www.crikey.com.au

Crikey's Landlord List: how many politicians own multiple homes?

With fewer Australians owning their homes, Crikey is keeping an eye on how many politicians own several properties.
www.crikey.com.au www.crikey.com.au
From the article:
In the 47th Parliament, there are 510 properties owned by 227 federal members of Parliament (MPs). That’s an average of 2.25 properties per MP.

Multiple home ownership is overrepresented in federal Parliament; 144 MPs own more than one property. In fact, more MPs own three or more properties (84) than those who own one property or fewer (83). Many MPs own a second home in Canberra, investment properties and holiday homes.
 
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SirRumpole said:
Just remove negative gearing and CGT discounts on investment properties.
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Take care on that. CGT discounts also applies to shares. If adopting such a proposal it can be argued it is inequitable to apply it to one investment class but not the other. As well, shares can be geared to an extent so same principle can be applied.
 
Belli said:
Take care on that. CGT discounts also applies to shares. If adopting such a proposal it can be argued it is inequitable to apply it to one investment class but not the other. As well, shares can be geared to an extent so same principle can be applied.
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Yes, well, people don't live in pieces of paper, ie housing is a different asset class than shares.

Housing policies should ensure that as many people as possible should be able to own their own home for security in retirement rather than encouraging people who already own their own home to own someone else's as well.
 
SirRumpole said:
Yes, well, people don't live in pieces of paper, ie housing is a different asset class than shares.

Housing policies should ensure that as many people as possible should be able to own their own home for security in retirement rather than encouraging people who already own their own home to own someone else's as well.
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I'm not disagreeing with you on that aspect but it isn't the point I was making.
 
Belli said:
I'm not disagreeing with you on that aspect but it isn't the point I was making.
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Yes I understand the point you were making, I'm just saying that housing and shares don't have to be treated the same for tax purposes.

Negative gearing can be kept on shares if that's really considered necessary and removed for residential property, there is nothing stopping governments from doing that.
 
SirRumpole said:
Yes I understand the point you were making, I'm just saying that housing and shares don't have to be treated the same for tax purposes.

Negative gearing can be kept on shares if that's really considered necessary and removed for residential property, there is nothing stopping governments from doing that.
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That would then make the investment have to stand up on its merits, it would also cause the price of building a house, reflect the return that can be earned from it.
No doubt there would be a huge shock in some markets, but in reality isnt that what is needed?
 
Belli said:
Take care on that. CGT discounts also applies to shares. If adopting such a proposal it can be argued it is inequitable to apply it to one investment class but not the other
Click to expand...
SirRumpole said:
Housing policies should ensure that as many people as possible should be able to own their own home for security in retirement rather than encouraging people who already own their own home to own someone else's as well.
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I'll argue to go half way.

Give tax incentives for new housing construction but not for those who simply buy existing properties.

We need more housing built so if we're going to tilt the table then tilt it in favour of that outcome.

Note that means genuine new housing not simply knocking one down and replacing it etc but actual new housing as such. Possible exemption if the old house is legitimately destroyed and insurance paid out etc (but tightly controlled so as to avoid a sudden spate of arson.....). :2twocents
 
TimeISmoney said:
My parents ran a strawberry farm in Qld from the 70s to the 00s, a big market giant went out and bought their own farm and undercut everyone else and that dropped the priced down, then other big retailers discounted their product below cost to get people in the store.
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Ithink it is called a sucker line to get the suckers into the shop so they will then buy
 

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