These Get Up! campaigns are getting a lot of attention in the media and on property blogs and forums, but I couldn't find any mention here…….
Campaign1: End Negative Gearing
Campaign 2: First Home Buyers Strike
Read the comments to see the level of anger in the community!
The FHB strike is at number one position on Get Up which means they will take it to the politicians with a strong campaign and mandate from the general population.
How will this affect property values going forward.
Members of Somersoft seem rather nervous: Somersoft members worried?
While members of AustralianPropertyForum.com seem pleased: APF Members pleased?
What do PI.com members think. How will these campaigns influence the real estate market?
StingrayBirke wrote:These Get Up! campaigns are getting a lot of attention in the media and on property blogs and forums, but I couldn't find any mention here…….Campaign1: End Negative Gearing
Campaign 2: First Home Buyers Strike
Read the comments to see the level of anger in the community!
The FHB strike is at number one position on Get Up which means they will take it to the politicians with a strong campaign and mandate from the general population.
How will this affect property values going forward.
Members of Somersoft seem rather nervous: Somersoft members worried?
While members of AustralianPropertyForum.com seem pleased: APF Members pleased?
What do PI.com members think. How will these campaigns influence the real estate market?
Surely theres a danger here. If FHBs bail out of the market it will have a negative affect on house prices, but maybe rents would go up to compensate. Same effect for negative gearing removal I think?
Get up are left wing rat bags
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StingrayBirke wrote:These Get Up! campaigns are getting a lot of attention in the media and on property blogs and forums, but I couldn't find any mention here…….Campaign1: End Negative Gearing
Campaign 2: First Home Buyers Strike
Read the comments to see the level of anger in the community!
The FHB strike is at number one position on Get Up which means they will take it to the politicians with a strong campaign and mandate from the general population.
How will this affect property values going forward.
Members of Somersoft seem rather nervous: Somersoft members worried?
While members of AustralianPropertyForum.com seem pleased: APF Members pleased?
What do PI.com members think. How will these campaigns influence the real estate market?
The campaigns are getting a lot of publicity, there was an interview with proper on the radio this morning, and it's been mentioned in the SMH too!
I have no issue with FHOG helping kids get into their first home has to be an admirable aim.
I have great issue with the FHOG Boost scheme of a couple of years ago. The total subsidy available was too great and meant some people could buy a property with literally little or no money down. (This was more the case in the early stages of the boost scheme when banks were still lending at high LVRs)
The boost scheme and subsequent rises in interest rates have seen some of those 'fortunate' soul caught up in varying degrees of financial distress.
I see the perennial chestnut of 'negative gearing' has once again reared its head.
This happened in 1985 and waiting lists for NSW public housing went from 80K (1984) to 110K (1985) to 115K (1986) and 140K (1987) before dropping to 120K (1988). At the same time rental returns blew out to 12% in Sydney alone during the period negative gearing was removed.
At the same time those of us who owned property pre-1985 continued to receive full tax deductions on interest for any properties they owned before negative gearing was removed. The legislation was not made retrospective.
The Federal Government of the day recognised they still needed to encourage property investment and offset the removal of negative gearing with the introduction of a 4% capital allowance for depreciation.
Swings and round abouts really – do the math.
The choice:
Drop fhbg, prices drop (temporarily/slightly) in fhb territory. This will affect developers selling at below the grant cut-off point & not the general market. Buyers will need to delay purchase until there is a deposit. Demand for rental is prolonged/increase in rental demand/decrease in vacancy rates/increased rent all leading to higher prices & fhb being out of the market for longer. Political dynamite.
Retain fhbg, status quo but a good feeling for the follies.
I dont think there is any possibility that the government will legislate to remove negative gearing. It has been done once before and it was a disaster.
In my opinion the people at Get Up do not know what they are talking about.
Cheers,
LukeAnd I forgot to add- I don't think that these campaigns will not effect the property market at all.
Luke.
StingrayBirke wrote:Members of Somersoft seem rather nervous: Somersoft members worried?
Really?? Did you read the posts there?? No one seemed worried to me!!
Vocal minority having a cry. Thats all.
The much larger quiter group( every home owner) will have a lot to say when/if things look like being effected by their boohoos.
You rarely hear from the happy. Just the unhappy.
When was the last time you visited a website to let everyone know things are just rosey.My point being this response is not suprising with house values where they are. In time values will level out and so will the bad press.
It's the psychology of this that is interesting, I think. It's like Steve was getting at in his thread on what buffet had to say.
If the idea that owning a house isn't the be all end all of Australian life takes hold, the bottom will fall out of the market. The market needs the leverage generated by entry level demand to flow through it.
Doesn't really matter in the end. These blogs may help those unable to afford a home to feel empowered and not entrapped by their circumstance (which is a good thing) but they won't make the banks lend.
I signed up specifically just to comment on this after perusing these forums off and on over the past years.
I don't think a lot of you bulls understand the current mindset of the Professional Gen Y, I'm 23 recent graduate engineer and between me and my partner we net about 80k pa and that could easily double over the next 5 years if the hard yards are put in.
We currently pay $11,180 pa in rent and have no problems living off 30k pa (after rent). Buying a nice house or rather a innercity flat is definitely an option.
From our point of view however its just not a good investment. Look at the stockmarket in the past 3 years, I can look at that market and feel fairly confident that a bubble is not currently present and stocks are correctly priced. Look at our housing market over the past 8 years, increased 77% according to that article, do you really expect that to happen over the next 8 years? LVRs cant get any higher (comparatively to good ol 70%).
Add that to the burden of a mortgage in comparison to the freedom of stocks or bonds, look at the AUD and the IP opportunities overseas.
We (or at least my piers) are not whining about prices, We are saying the world is our oyster and house prices stink. The way things are going, by the time I want to settle down and make a home and family all the Boomers IPs will be flooding the market
From my point of view negative gearing needs to be removed in the future to up rent prices and force some of the Gen Y into the market, cause at the moment I would rather get my taxes back by taking a 3month holiday to the ski fields then paying interest to a bank for an overvalued asset.
Just an insight to a commonly held view amongst my piers, granted the viewpoint of a recent finance graduate may be a bit different.
<br /:)” title=”>:)” class=”bbcode_smiley” />Would you prefer the30% of residential properties that currently exist, become public housing perhaps?
When negative gearing was abolished by the Labor Government in the 1980s, landlords offloaded their investment properties in droves, putting pressure on the government of the day to provide public housing for renters.
I'd hate 30% of my street to be public housing.
I'd also hate for my tax to increase more, to support the cost of public housing that the government would have to provide were negative gearing abolished again.
The Labor Government in the 80s quickly saw the error of their ways by removing negative gearing from rental properties, and re-instated it pretty quickly, as the cost to them would have been too great.
Does anyone know the % of negatively geared investment properties, compared to those without negative gearing?Cheers,
I can't really comment because I don't know anything about what happened in the 1980s.
But hypothetically there is a mass exodus by landlords as a result > housing prices fall (Win) > government buys up cheap housing > government gets passive income (Win) > prices eventually go up > government sells them for a profit. (Win. Kinda like what the US is doing with all the shares it bought atm).
The government would have a larger tax base due to negative gearing being abolished.
And more money from low wage house holds would be returned to the government, rather than the banks.
Obviously though if the government bought in before prices were rationalized as they do, it wouldn't quite play out as above, but honestly I couldn't see any action coming fast out of our current debacle of a government.As to 30% of the street being housing commission, grew up in Ferny Grove, a lot of it still is housing commission, its not all bad
Aside from the above though a massive drop in prices would mean a huge chunk taken out of the economy, which would be devastating for the next couple of years. So yeah getting rid of negative gearing is just a pipe dream.
cuteyoungchic wrote:Does anyone know the % of negatively geared investment properties, compared to those without negative gearing?Also another interesting question, does anyone know what other countries have similar policies?
Where I live, there's no generation gap between the Baby Boomers & the GenYs.
Quite a few of the GenYs are right into property investment, some of them while still living at home, are buying modest houses on large blocks just a bit away from the CBD. After a year or two or mortgage repayments, particularly now while builders are quiet (& so are cheaper & very willing to please), they bang a unit or two in the back yard.
They're well on their way to beng very astute investors.SmartGenY,
As far as I know the only other place that has similar NG benifits to Australia is Canada and, not surprisingly, it is the only other bubble that hasn't popped yet.
cuteyoungchic,
It is a commonly held misbelief that removing NG in the 80s caused rents to rise. It only happened in Sydney and not the rest of the country. It was reinstated because of REI lobbying, not because of a rental crisis.
As for % of NG property vs not – who knows? I do know there are aprox 1.5 mil Australians currently NG property and that the number has increased drastically over the past 10-15 years.
If anyone seriously thinks that it would be a good thing if the bottom fell out of the housing market then you need to get your head checked. It happened in the USA and look what the result was- massive job losses and unemployment in excess of 10%. If you think that that scenario is better than what Australia is got at the moment then I am sorry but I just don't understand.
Maybe you just want house prices to crash so you can have a laugh at other peoples pain. I am 25 and graduated from university 2 years ago and am about to sign contracts for my second IP (in Sydney). I agree house prices are expensive in Australia at the moment, but there are things I am doing to minimise that exposure (like investing in CF+ve USA real estate). And I also think that if you want to own property then it is definitely possible, however sacfrifices are needed.
I personally dont think prices will crash. Unemployment is near all time lows, Australia's economy is the strongest it has ever been with tens of billions of resources projects in the pipeline which will have direct flow on effects to other parts of the economy and experiencing wage and inflationary pressures. I dont think housing will rise at in excess of 8% per year like it has in the past, but I can see quality real estate in quality locations will rising by a historically moderate 5% per year. In the absence of a trigger, a crash just isnt going to happen IMO.
Cheers,
Lukeluke86,
It just depends what you think is the lesser of 2 evils.
Current affordability is unsustainable. A bubble exists. That much seems obvious. A correction is required for sustainable economic growth in Australia's future.
Without a crash, there will be stagantion – aka Japan. The country will take years to recovery this way but overleveraged individuals will be able to hold on longer.
With a crash, there will be unemployement – aka America. In this scenario, once the bottom is reached, new growth will start in earnest much sooner but overleveraged individuals will be ruined for life.
I don't know whats better for the country, just putting the possibilities out there in simple terms. The govt, RBA and big lenders seem to think stagnation will be the better outcome – so we may end up with that.
The mindset of the people is a fickle thing though and can have alot of effect on an economy.
" cuteyoungchic,
It is a commonly held misbelief that removing NG in the 80s caused rents to rise. It only happened in Sydney and not the rest of the country. It was reinstated because of REI lobbying, not because of a rental crisis. "
Ummester, I haven't mentioned anything about rents in either of my posts above. Could you have got your posts mixed
maybe?
Cheers,
:)” title=”>:)” class=”bbcode_smiley” />
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