Forum Replies Created
Just to add on, in comparison to our current Medicare (for people that is) system, the 'Medicare for Pets' system is more fair. With Medicare at the moment, regardless of how often we use the public medical system, we are forced to pay a percentage of our salary as Medicare Levy. Worse still are those who leech the system by not working, hence not paying tax or Medicare Levy, and yet take advantage of the system by going to the doctor every other week.
I haven't seen the doctor in over two years, and yet I've had to pay my Medicare Levy accordingly. At least with 'Medicare for Pets', it's entirely up to the owner to decide. For example, they may take the risk that their pet may be problem-free in its younger years and register for the scheme only when their dog or cat becomes middle-aged at 7 years old. This is not particularly wise of course, but you get the picture.
With pet insurance, most companies wouldn't even insure your pet once its had its 10th birthday. With 'Medicare for Pets', you could register your pet at say, 16 years old when it's dying from renal failure and all the expensive treatment starts. 'Medicare for Pets' does not check for 'pre-existing conditions', in this sense.
The drawback of this is that people could take advantage of this system by intentionally not registering their animals when they're younger, which is unfortunately the time they're likely to cause the most damage when allowed to roam, more likely to fight, get lost and stolen. So to combat this, we could likewise have a lifetime health cover loading once animals are registered past a certain age. This age would differ between species because of their differing life expectancies. The same penalty currently applies for people when they don't get health insurance after they turn 31.
hbbehrendorff wrote:The whole part where you talk about a compulsory "animal ownership" tax where all animals are "microchip ed" and a database of all animals are stored by the empire for the greater benevolence. All hail chairwoman gillard (may her footprints reduce carbon for all eternity)And so I presume you are an armchair expert and an absolute genius. What is your counter-proposal? I am not proclaiming to know-it-all, but by George I've worked in this business for long enough to see where some of the problems are, problems that the celebrity vets have failed to raise to the public!
By the way, if you actually read things properly, it would be noted that I didn't mention such registration is compulsory. In my post in fact, there is a specific mention of what the consequences would be if people did not register their animals. They simply would have to pay full price. They don't get fined or thrown in jail or be forced to relinquish their animals.
Although having said that, IMO, if people can't even be responsible enough to register their animals or microchip their animals (which is required by law by most councils these days), then they have more thinking to do regarding pet ownership.
Of course, it is a stretch for the government to even implement something like this. However the whole purpose of the thread was to bring in ideas. If nobody ever suggested something like this, do you believe there is any chance ever of anything being done?
Bottom line is this: get involved, or get out of here.
Jamie M wrote:Pet insurance is a must IMO. I had friends/family laughing at the idea that I ensured my pugs. Only six months ago one of them had an emergency operation to remove something from his stomach – the bill was $3k….the excess I paid was only $100.Indeed, in our current situation where 'medicare for pets' doesn't exist, insurance is paramount. Sounds like your dog had exploratory laparotomy and specifically a gastrotomy, and I've done a couple of them. They are risky procedures, and as you have found, very expensive. The last one I did involved removing an orange rubber ball from the stomach of a Rhodesian Ridgeback X. The bill was $1400, quietly subsidised by our clinic.
Furthermore, let's consider also that the 'medicare for pets' levy is ONLY paid by pet owners. This means that if you don't have pets OR if you have pets but don't believe you need it, you need not register. The bad news is that if something happens and you have to see the vet, you pay full price.
When money comes into the picture and people can see they would actually SAVE MONEY or even get 'FREE' treatment for their pets, I'm sure registration automatically becomes a no-brainer. Otherwise for now, the public at large doesn't understand the importance of microchipping and registration.
hbbehrendorff wrote:Is there anything the government wouldn't control in your utopia world ?That is socialist/communism propagana talk at its worst
Man, you sound angry. What statements exactly are you referring to?
As a veterinarian, I'd like to see the equivalent of Medicare for animals. There IS pet insurance, however few seem to know about it, and even fewer seem to understand that there is an 'excess' payable in each instance. In effect, this 'excess' causes owners to still have to fork out for procedures and/ or medications if the costs add up to less than about $200-250 per event. This is in addition to the few hundred dollars a year they pay in premiums. The ones that truly benefit from pet insurance probably wouldn't wish to do so either. When owners can actually claim for the cost of procedures amounting to thousands of dollars, their pet is actually already in grave danger.
Yes, you can be thankful for pet insurance when your dog needs an operation and chemotherapy to manage an aggressive bone cancer in its leg, or when your animal needs an MRI of its brain because it has unexplained seizures. But is this the sort of hair-raising experience you really want to have?
The benefits of 'Medicare for animals' are three-fold:
1. Cash-strapped pet owners no longer have to struggle between deciding whether to treat their sick animal and eat cardboard themselves for several months or to euthanase their pet for the sake of ensuring some quality of life for themselves. Clients also need not leave their animal sitting sick for three weeks before bringing it in as an 'emergency', because they fear the cost of the vet bills.
2. Veterinarians no longer have to put up with complaints that vet bills are 'too expensive' or that we 'charge too much'. Veterinarians can finally focus on actually doing their job guilt-free rather than trying to do the job plus quietly subsidise owner's bills at the same time. Believe it or not, some vet clinics out there actually do this.
3. The lead on from the above is that veterinarians can finally charge the government, *ahem* the clients, what is actually due, and maybe only then can veterinarians cease to be underpaid doormats.
And HOW exactly do we do this? A 'Pet Medicare Levy' of course, payable only by registered pet owners. They pay a levy each year, just like a tax, that is scaled according to what species of pet they have and its size. Pet owners who want to 'benefit' from this scheme and pay government-subsidised vet bills would obviously be forced to microchip and register their animals with council and the government database in order to get a card that itself bears a microchip. This microchip contains all details of an owner's current pets and can be updated at any council or government office whenever the owner gets a new pet or a pet becomes deceased or lost.
Any animal, whose details are NOT on this microchip, does not qualify for any benefits under this scheme and pay full price on all vet bills, which would undoubtedly now be stratospherically expensive. Look, if not for bulk billing, our doctor's bills in reality actually do cost a freakin' fortune! All vet clinics will also carry a standard card reader that allows them to access the details on such 'Pet Medicare Cards'.
If pet owners are given a greater incentive to have their pets REGISTERED with an authority, we would finally get the ball rolling. Now, all we can do is talk till we're blue in the face about the importance of microchipping and registration. Yet, I see squillions of pets who have no microchip and are not registered. These animals get lost, get run over by cars, are stolen, spread disease like Parvovirus and cat AIDS, decimate wildlife, or are busy outside making babies with other individuals of their own species, getting into fights or worse, roaming at large and attacking people and their children.
There is still room for improvement when it comes to responsible pet ownership. And if anybody can't even afford the 'Medicare for Pets' levy, then they better think hard about whether they ought to own an animal in the first place.
simple wrote:This is probably a result of been frustrated with people out there keep throwing 'property double in value every 7 years' staff
That statement is indeed a sweeping generalization. Looking at historical house prices, the median value of some suburbs has more than doubled in that period, while others have yet to double.
ummester wrote:Oh come on… it never get's old:) It's been the best (though most avoided) point of debate in Australia for the last 10 years.
It's not quite as simple as your equation though. Correction – probably less than 10% (perhaps 15%) but the country will pick up the pieces fairly quickly afterward. Bubble – 15% or more drop in value in 12 – 18 months and the country is going to be pretty screwed for a while to come.
Haha, I thought it was a never-ending debate that's been around for as long as housing existed.
Anyway, it's going to take a big crash to scare me enough to drop my property. I'd like to suggest that in the event of a bubble, not all property is going to suffer the same loss of value. Some would lose more value, and others will lose less. Boils back down to the principle of buying right.
emptyvessel wrote:Anyone else have a strategic target for their LVR based on an actual number?
Or is everyone going by "feel"?
(I wager that most investors don't know their LVR and of the ones that do, most don't have a target. And of those that have a target, they can't explain why they have that target. Except to say that "it sounds good and makes me comfortable so I sleep at night." And of the ones that can, they most likely DO have a plan for keeping it in line with that target should values in an asset class go up or down.)EV
Precisely. I don't have a 'target' for LVR. However I do know what level of debt I'm comfortable with, can meet the repayments and can sleep at night. Although I'm having sweet dreams now thinking that the RBA could reduced interest rates. Ultimately, it's good to know the numbers because it shows where you stand in terms of your portfolio, but my eye is on the bigger picture: fulfilling a dream. With a plan that goes at least 10, if not 20 years into the future, I'm not hugely worried about temporary changes in market sentiment, and I'll bet on making a fortune come time to sell in 10-20 years time.
beedie wrote:Have to agree with the statement earlier that this is possibly the beginning of the beginning in regards to the US.In my humble opinion explaining the share markets last few days ….. Well if we look at the basic mindsets …all that can be said is ……that an essential characteristic of any intelligent life is that it seeks to protect itself and its wellbeing whilst also rationalising that greed is healthy.Greed is good…… You can still feel greedy and feel good about yourself…. Slap it in the mixing bowl and there you have it………lol…..
Or we can look at it as a jittery market that was looking for a reason, ANY reason, to correct. The panic is unnecessary. I'm sure most of us were wise enough to know that the dust from the GFC had yet to settle and yet the market rebounded seemingly overnight.
Thanks for the article. However I'm beginning to feel that there is no need to substantiate the presence of a bubble, nor the need to prove that it doesn't exist.
There will always be people on both sides of the argument, and one of them will take the prize. Whatever it is, this argument is getting old.
At the end of the day, the equation is simple: want it? Buy it. Think it's overpriced? Then forget it.
The road to riches is long and bumpy. All I can say is: Keep your eye on the prize.
Although I'm not a well-informed economist, it appears that the RBA raised the interest rates too quickly to start off with. Perhaps they did this to control an explosive property market, but it is up to debate as to whether or not they predicted the adverse effect it would have on the retail sector. Isn't it possible that Australia could see a recession if the degree of spending stays very low?
hbbehrendorff wrote:Why work as a woman when you can enjoy in premarital sex, get knocked up twice in a row and sit at home for the next 20 years in luxury playing farmville on facebook, All government funded !
Humorous but true.
hbbehrendorff wrote:6: Lower taxes for Investors and Businesses so that it is more attractive to manufacture and produce in this country, Our current system is so backwards in that is rewards non producers and penalizes achieversAgreed. We could perhaps generalise this to the everyday worker also. Working harder in an attempt to get more money is like pushing **** up a hill considering the tax we pay.
On another note, I wish the government would have a 'Medicare for animals' system in place. If I earned $1 for each person who complained about 'expensive' vet services and earned $0.10 for each person who thought vets were millionaires because they charge 'high' fees, I would be a real millionaire indeed.
hbbehrendorff wrote:This is going to be Fragmented but I don't care to write a proper formatted novel tonight.Don't listen to the baby boomer generation know it all's that have only seen rising house prices there entire life and think that "This is just the way it is"
"the driving force for housing price is supply and demand" is <moderator: delete language>. Accelerating debt and speculation is the driving force in rising house prices
Australia has the most expensive property in the world, At around 7x Average wages, The world average being closer to 3
I don't care what anyone tells you, Financing for a 500k house with a 4% GROSS rental yield is a LIABILITY, not an ASSET
You could have bought silver on the 3/1/2001 for $4.47 an ounce and sold on the 25/4/2011 for $49.78 which is a 1013.64% increase in 10 years or a 101.36% gain per year, But silver is a bad investment, You would have been much better off negatively gearing a -$200 a week cash flow property to invest for the long term because property ALWAYS goes up.
All capital cities are experiencing price reductions with Perth and Brisbane falling by around 7% and 6%. Wait and watch for much bigger falls in the near to mid term future before you go considering chaining yourself to a debt ball.
Any don't listen to the people trying to tell you what great property deals are out in Central Queensland, I live in emerald and I can tell you that paying astronomically high property prices for a fallen down wooden hut built in 1932 at a place like Dysart which rents out for 20 million dollars a week to a mining company at the height of a mining boom that cannot last forever is not that smart.
Watch for the day that those rentals are empty and the houses themselves cant even be given away, Though the 800k debt that bought the hut still remains.
Though don't try and argue with the Australian property zealots as property investing has become more of a religion then seeing the numbers through a educated, logical and mathematical worldview.
Remember above all though: Australia is DIFFERENT.
All I can say to that is: Sarcasm detected.
Tarneit's vacancy rates currently sit at 10.5%. I agree with Luke in being very cautious about buying in Tarneit. At under $350K, I would be looking to buy an older, standalone 2 bedroom unit (that may be in need of some work), and in a well-established North Eastern or Eastern suburb, preferably in the middle ring, no more than about 25 kms from the city, away from a main road, but walking distance to a train station. Here's an example:
http://www.realestate.com.au/property-unit-vic-mitcham-107546370
Asking is $365K, but of course you could offer less, based on how much your research indicates it is worth. Vacancy rates at Mitcham are 1.5% at the moment. Vacancy rates won't mean a lot to you initially when you're living there, but it is the hidden factor that contributes to price growth, even as you are unaware of it.
mattnz wrote:I see there is a changing view on housing supply in Australia, with well known and respected industry analysts now advising they see Australia as Oversupplied with housing. http://www.theaustralian.com.au/business/property/chronic-housing-shortage-in-australia-is-a-myth/story-fn9656lz-1226089083998Matt, the points in that article are generally fair. However with my limited knowledge of Melbourne (in which I live and invest), there's two points I still wish to raise for discussion.
1. The 10% vacancy rates of "many of the suburbs in Wyndham City".
This is going to sound like a sweeping statement, but to those who live in Wyndham, I apologise. Even in the infancy of my research to buying my first home, I would not have touched anything in Wyndham, not even with a 10 foot pole. This was over two years ago and a friend in my church was thinking about investing in there (Point Cook) and recommended me to have a look. I on the other hand, thought it wasn't a good idea. And there's a good reason why. When there are house-and-land packages going off left right and center, and hundreds of similarly-clad dwellings sprouting up on small blocks of land, it should ring alarm bells for most buyers. It is not surprising that there is an oversupply in this area.
They are simply building too many dwellings in an area where people are not prepared to live, or otherwise having little distinction between properties or other characteristics that would attract people to buy there. Compare this with Croydon where I bought my first home. It's obviously not a blue-chip area, but current vacancy rates are sitting at 1.2%. At one point they were sitting at 0.9%. This is light years better than a vacancy rate of 10% that Terry's article preferred to quote to the media.
As I write this, I am also reminded of a time where I spoke to a real estate agent regarding investment property. Back then I told him about the property in North Geelong I was considering. He told me his investment property in Wyndam Vale was better in terms of yield and proximity to Melbourne CBD. He is right on both counts, assuming the ability to secure tenants and keep them. I didn't want to argue specifics with him. Today, vacancy rates at Wyndham Vale are nudging 13% and vacancy rates at North Geelong (where I eventually bought) sit at 2%. So, which property was a better buy? Let the figures do the talking!
Look, I'm not boasting to 'know it all', but If anything, it just shows the importance of doing your research and buying right. At some stage, the excess supply of property in Wyndham will be taken up and the 'growth area' will be pushed further to the West and South West. And at this time, suburbs in Wyndham will become a good buy. However as it stands in July 2011, now is NOT a good time to invest in Wyndham, in my opinion.
2. The "looming oversupply of apartments in inner-city Melbourne".
Now I have a limited understanding of the way developers work. However I suspect the following to be true:
– developers do not set out to lose money, hence they will not build something that is not going to sell
– developers have the option of 'pre-selling' their property and only to start construction when they have achieved a sufficient amount of sales to make the project viableIf these two points are true, then we can safely assume that a large amount of these apartments have already been bought, either by investors or owner-occupiers, even before construction begins. Yes it doesn't prove a shortage of housing, but it proves the demand for housing.
Those of us who have read at least one book on investment property however, would certainly note that once again, we are dealing with a large number of dwellings in the same area that have little to no distinction between them. This is when the whole thing can fall flat on its face. Ill-informed investors or speculators buy up these properties in the hope of taking advantage of things such as depreciation benefits and 'guaranteed rental returns', but when all this runs out, they simply have apartments sitting vacant for yonks.
Why is this so? Part of the reason is the lack of demand for this type of property. As Terry himself notes in his article, "two-thirds of Australians continue to buy a detached dwelling". Apartment living is not for everyone. Those who do rent such apartments may be a transient population, staying there for short periods either as a student or perhaps while getting a feel for the city as a new migrant before buying their own home or even young singles who eventually outgrow this when they start a family and move to the suburbs. On the surface of it, the apartments are in a supreme location, close to work, transport and shops. But not everyone wants to live in the 'big smoke'. People may prefer the privacy of a townhouse, unit or detached house in the suburbs.
This hence explains why there can be stratospheric vacancy rates in some places in Melbourne, while the supply of rental properties can be very restrictive in other suburbs in the same city.
The bottom line as such, I think, is this:
"There is a shortage of housing in places where people want to live, and in the type of housing people would prefer to buy or rent. Constrained supply and unrelenting demand are contributing factors to the shortage."
And a corollary of this discussion is this:
"Buy detached 2-3 bedroom houses on sizable blocks of land in well-established suburbs with low vacancy rates."
The above-mentioned points are very simple to understand. If we had 100 houses in the middle of a desert, and 100 houses near the beach, you will likely find that vacancy rates near the beach are much lower than those in the desert. There is simply more demand in one area compared to another, hence leading to the shortage, assuming the supply is constrained in both areas to just 100 dwellings each.
We can argue till blue in the face that heaps of houses in the desert are sitting vacant and hence there is no housing shortage. But in doing so we are missing the point. It is little use having housing in places where people do not want to live! If I told a Melbournian FHB that he/ she could buy a house in Coober Peedy (SA) for $60-150K and there were heaps to choose from, would this FHB necessarily move there? In order to experience the shortage of housing, we should look at what is happening to supply and demand in long-established suburbs, not in 'growth suburbs' at the outskirts of a city, or in the middle of the desert.
Marie123 wrote:FWord, I am renovating my PPOR at the moment to sell. From what John says it might be better to see if someone wants to "rent to buy" the property instead? I might get a better dollar value in the long term and they could potentially reap some benefits of capital growth as well.
Hope someone else can answer your question. I'm not a seasoned investor unfortunately. When you say there's a company in Perth forecasting price increases 'here', which state would you be referring to? One of the property magazines I've read seems to suggest that each state is in a different cycle. For example, the magazine recommended to buy in Sydney but avoid Melbourne (which is where my property is). It is a very sweeping statement to call an entire state unfit for investment as we've learnt that there can be micro cycles occurring within each state, each suburb and possibly even between areas in any given suburb.
It's hardly surprising for a tenant to feel unhappy about a raise in rent, and it probably makes renters feel like landlords are out to suck them dry. But this is simply not the case. It's nothing personal. It boils down to an understanding that landlords obviously do not invest in property to lose money. Otherwise we might as well be running a charity. Of course being a landlord comes with it responsibilities towards the tenant, such as keeping the rental home in a good state of repair and to respond promptly to any reasonable requests from the tenant in order to keep them happy.
In the end, if tenants are unhappy with the cost of rent, they are free to move whenever they wish (within the terms of the rental agreement of course). And to me, this is the best part about renting: the freedom to move around at will, and not needing to be responsible for maintenance work, council rates or water service charges regardless of where they live.
emptyvessel wrote:Here is a post on the macro economic factors, with no mention of property. It presents a nice balanced view of both the bear and the bull; http://www.moneymanagement.com.au/news/is-it-time-for-investors-to-come-out-of-hibernatio?utm_source=20110720&utm_medium=email&utm_campaign=newsletters#comments
Interesting article here and it shows there are two sides of the coin when it comes to issues like these. To be honest I have wondered from time to time if we're going to see GFC Part Two, considering the fallout from GFC seemed very mild compared to what the media was leading us to believe. In essence, I sometimes wonder if the 'real' GFC has yet to hit. That is a very real risk I took to still have money in investments but really, I'd rather be 'in the game' than be waiting on the sidelines for something that may or may not occur. It is definitely wise to consider the risks, but it can go a bit too far sometimes and fear will cripple us from ever doing anything.
Case in point is the purchase of a first home. IMO it is crucial to know I actually have a place I can move into after my parents boot me from the nest. The market could rise or fall, but importantly I have a roof over my head.
MikeLewis wrote:I think you will find that in a housing crash, rental returns are much higher just because the house price is so much lower. The nominal rent however doesn't change much. Good point.Oh wow, dredging this up from the depths of the abyss. Coincidentally I have a book from the library that talks about this issue. Here's an excerpt again from John Lindeman's book, Mastering the Australian Housing Market:
"The issue of affordability has risen many times since then, but in each case the reason that pressure on housing prices eased was a restriction on housing finance, not an easing of demand…During each period, however, rents rose as the supply of finance diminished, leaving investors with the same net result: an average long-term return of about 14 per cent per annum on their investments."
If John is right, this excerpt demonstrates two points:
1. The current dips in house prices or slowing of house price growth at this time have little to do with weakening demand. Previously I argued this heatedly with another member who stated that in today's housing market, demand has slackened and therefore there is no housing shortage. There is a housing shortage. Go out there and sell your house for cheap and you'll see how many first home buyers and investors will rock up. There's plenty of people out there who want to buy a house. However the stricter lending criteria at this time, combined with higher interest rates and the previous increase in house prices have served to delay people from purchasing a house, NOT destroy their dreams of ever wanting to own a house. Of course, there are some people who want to be continually mobile and not want to be tied down to a mortgage. I know of a few such friends. Even if a large number of people suddenly take on this mentality, they will still need somewhere to rent. The demand for housing is NOT reduced.
2. It is simplistic to assume that rental returns have seemingly increased because of a drop in house prices. In reality, nominal rent itself has also increased to compensate for reduced growth in house prices. Otherwise how would we explain the final statement in that excerpt above?
Additionally, consider another excerpt from the same book:
"…the only option for potential first-home buyers is to rent or to buy. The real measure of affordability for first-home buyers is the cost of renting compared with the cost of repayments, not the cost of repayments per se."
The importance of this statement is realising that in today's housing market climate where repayments for a house vastly exceed the rent of a similar house, first-home buyers will choose NOT to buy because it makes much more sense to rent. However as house price growth slows or stagnates, nominal rents will continue to increase. And at some point, the cost of repayments and rent would be quite close, and that causes first-home buyers to stop renting, flood into the market to buy their first home, and house prices grow again. So you see, it really is all a cycle.
What does this mean for potential first-home buyers? Rent. Save for your deposit and wait till repayments start to parallel that of rent of a similar house, then buy. Alternatively if owning the roof over your head is very important to you, buy when you can reasonably afford to do so. What does this mean for investors? Hold on to what you have or clear 'laggard' properties and save in preparation to get into the next cycle. Growth in house prices is slowing or prices could even be falling, however expect rents to increase, until such point that the cycle begins again. Looking at how potential first-home buyers and investors are likely to behave in the current market, it also becomes easier to appreciate why retail is doing so badly. Saving has suddenly become very 'cool', for one reason or another. Unfortunately, such an injurious insult to the retail sector can lead to job losses and rising unemployment, which compounds the issue further.
To conclude, I'll say what many others have said before: the housing market is not simply going to crash or implode without the influence of larger forces from Australia's economy and that of the rest of the world, or the effects of natural disaster or war.
John Lindeman's book is a great read by the way, it makes things very easy to understand.
Marie123 wrote://The common theme between all of these countries is high levels of debt financing the property bubble, just like in Australia.//
I heard the same – like I mentioned earlier, from a recent Think and Grow Rich seminar – but they didn’t give figures for those who DO own their own homes, or at least those who have nearly paid their debt. I hear we have a greater proportion of home owners in Australia then a lot of the other countries who have gone bust?
Here is an excerpt from John Lindeman's book, Mastering the Australian Housing Market, where he cites data from the ABS:
"- one in 20 Australian homes are government-owned public housing
– more than one-third of homes are being paid off by the occupiers
– more than one-third of homes are fully owned by their occupiers
– only one-quarter of all dwellings are owned by investors and privately rented"So one would have to wonder, how does this situation in Australia compare to the rest of the world?
