G’day
just got a few questions after reading an article titled “rich switch from property” by Fiona Tyndall in AFR.
“…That confirms data in a recent reserve bank of australia study showing that while investors who earn $500,000-plus annually are more likely to own an investment property than people who earn less, they are less likely to use negative gearing as a tax break on their property investment.”
so does this imply most of them are positively geared?
“‘They are now exiting that market, if they haven’t already.’ Macquarie bank’s associate director of wealth management, Doug Webber, said there had been evidence that people in the top income brackets were investing less in property.”
would most of you “follow” those top-earners, or would you keep on hunting for deals at the moment?
cheers
my take on it hissho, is that they don’t need to use negative gearing, because they don’t actually have the debt on the properties and need the tax breaks. God- look at their incomes. Thry pobably own the properties outright. Neg gearing means keeping oneself in debt. So every time you almost have a property paid out, you keep buying more to keep those tax breaks kicking in.
Maybe they just go out shopping some weekends and pay cash for a place in wollahra? I doubt they are buying up pozz geared places in broken hill.
kay henry
Maybe the reason they earn so much is that they have a lot of +ve CF property rather than just a ‘high paid job’??
These people are probably highly paid executives or owners of successful businesses or people who have inherited wealth.
Not battlers buying the ve+ in Broken Hill.
The “rich” you talk about are speculators.
They park thier money where they think they will achieve maximum return. This happens in most things that cycle, property, shares, cash rates.
I have seen a few cycles in my time and generally i find it true that when applied “the rich end of town is the first to leave”, that the cycle in that speculative area is ending.
But where are they going or have already gone should be the new question.
Originally posted by hissho:G’day
just got a few questions after reading an article titled “rich switch from property” by Fiona Tyndall in AFR.
“‘They are now exiting that market, if they haven’t already.’ Macquarie bank’s associate director of wealth management, Doug Webber, said there had been evidence that people in the top income brackets were investing less in property.”
The quote does not quite tell me what’s actually happening.
‘Investing less in property’ could mean:
1. They’re selling up (even though there have been no big interest rate rises or massive vacancy increases that need provoke this at the moment)
2. Keeping what they’ve got but buying less frequently, investing more of their money in shares.
3. Continuing buying but buying lower value properties than previously (eg buying in Brisbane (or even country areas) rather than Sydney)Each of these would affect property markets differently (crash, mild slowing, growth in certain areas only).
Peter
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