fWord wrote:
Haha, the ol' house prices debate again, and you're mighty quick to jump into it.

It is the most overvalued consumer commodity realative to general inflation at this point in time. When a thread is started questioning if IRs are making the cost of living too high, surely we must look at the most expensive portion of that cost…[Read more]

fWord wrote:
Sometimes I cynically (and humorously) think the RBA increased interest rates ONLY to combat the explosive housing market (under the guise of trying to control inflation) and bring more peace by cooling it down. They have certainly achieved that, at great cost to the retail sector of course. Edgy local retailers then go on to blame…[Read more]

gmh454 wrote:
If demand drives up the cost of money the reserve can drive down its cash rate, and just become irrelevant.over to others..

And the banks may not follow suit.As I think it was mantz noted, which I tend to agree with, if housing sales contunue to slide the RBA will likely lower the cash rate. However, the funding cost to our…[Read more]

IRs are still lower than the long term average.IRs have the strongest correlation to house prices (inverse) of any single financial variable in this country.

gmh454 wrote:
A couple of years ago a family member was mentioning their  place was worth 800K, followed by the usual, "will sell up some day, sell the IP and retire up the coast."fast forward three yearsthe neg was killing them they had capitalised interest losses again and again, plus took a holiday, borrowed on the capital gain etc etc.…[Read more]

beedie wrote:
Quote“In my generation, I don’t know of any one that created wealth by paying rent.”Anonymous (Age 65)

That's because Anonymous' generation has had it easier than any gen before and easier than any gen will have it again:)

streamlineinvesting wrote:
There was a good article I read months ago, couldn't tell you the name of anything anymore sorry, has slipped my mind. Basically the guy in the story bought a house where he wanted to live when he was older, out in the suburbs, lots of bedrooms for the future family, nice sized yard, near schools etc etc. But in the…[Read more]

Dan42 wrote:
You also need to factor in the increases in rent over time, compared to the relatively stable mortgage payments. So it might be cheaper to rent in year one, but more expensive from years 5 onwards.

This is true.Although my rent has not increased in the past 3 years and IRs have increased a bit in that same period.Buying in 2008 and…[Read more]

its really very simple.Being that the house you can buy and rent are essentially the same quality and value:If the interest on the loan can be locked in for less than what the rent cost you PA – you should buy. If the interest is more than the rent – you should rent and save.You either have to pay a LL or a bank. You pay the one that costs less.

fWord,I write fiction and am trying to get puplished as a fictional author. Reading about and commenting on the Australian property market is more a hobby which rises from what I suppose is a genuine concern over Australia's future. Though I like thinking about it, reading about it and posting on it, it's way too dry to dedicate 6 months and 100k…[Read more]

devo76 wrote:
Property would have dropped if The government didn't step in………. Do we really think they won't do the same this time??? Of coarse they will. They may be a little more careful not to overstimulate but stimulate they will. To think they won't is falling into the same trap.

Yep. Unless the govt considers it either too expensive…[Read more]

gmh454 wrote:
I commented a few months ago at how many boomers who are about to retire are sitting on neg properties. (met predictable replies) . Talked about this with other accountants, and we are now seeing them sell, and talk about unloading, they cannot sit any longer. They certainly are not buying.

They have to sell places that aren't…[Read more]

did you have to save a deposit for your first place cutyoungchic?

fWord wrote:
Maybe so. But perhaps they'd prefer to bad-mouth something that they cannot afford, rather than to put in the hard yards and work towards it.

This is an interesting comment.I agree that people should work towards the things they want but they should do that first buy saving a reasonable percentage of the purchase cost first. There…[Read more]

fWord wrote:
My knowledge doesn't go back that far to the 1890s. However whether there was a 'slide' or a 'crash' in the 30s is subject to debate. Prices didn't 'crash' 50-, 40-, or even 30%, if I remember correctly. Pity my short-term memory, and lack of access to a book I just returned to the library yesterday. Going further however, rents…[Read more]

ALF1 wrote:
Yes, you have the right to your opinion on this forum but you are going against the grain of over 175 years of Australian property stability which encompasses the Great Depression, WWI and WWII

What?Property in Australia crashed big time in the 1890s (which is within 175 years) and it also crashed to lesser degree in the 30s.

xdrew wrote:
I'm sorry .. i've lived through the 73 oil crisis .. the 82 recession .. the one we had to have in 90 and the dot com collapse. And the only consistant thing they've all said is .. THIS ONE IS DIFFERENT.Its not .. the people are all .. talking the same.

Petty we don't have any one left around who lived through the 30s depression…[Read more]

xdrew wrote:
This is the extra bit i think you should add to the above stated facts from the SMH … which pretty much say .. people who are holding onto their property because its worth money … dont want to have people do things to make that go down.The reality is … property in a civilised society is just an asset .. like anything else. But…[Read more]

fWord wrote:
Arguably, government 'red tape' and regulations have caused a virtual land shortage. And the high cost for developers may then contribute to a shortage of new projects. We then have a shortage of affordable housing. If this is indeed the case, then people need to start moving their 'rage' to a different target. Abolishing negative…[Read more]

Here's an extra bit on NG – as this thread has caused me to refresh my memory on it's history:

Quote:
Supporters of negative gearing argue that its abolition would lead to a ''landlords' strike'', driving up rents and exacerbating the shortage of affordable rental housing. They point to ''what happened'' when the Hawke government abolished…[Read more]