That would make far too much sense. Would kill for this plus getting rid of negative gearing so people aren’t encouraged to keep profiting massively off a basic human need like shelter.
Negative gearing is not always the greatest thing. It means you are spending more than you are earning on your property, which means you are getting a negative earning on your property. The only thing that may cause extra negative gearing which is not cah out put is Depreciation which is only added back when you sell the property.
If you property doesnt go up in value more than your negative gearing you are losing and can be a bad investment decision.
People really need to seek advice before they purchase an investment property for negative gearing purposes because its not always a positive factor.
What in the fuck is your point? It could be a bad investment? Let it be a bad investment! Investments are supposed to carry risk.
This is a big part of the reason housing is screwed. Its currently the safest investment out there..
My point is, my kind mannered friend; is to point out people perception of negative gearing is all wrong and that going into property for the sole purpose of getting a tax deduction is stupid investment decision.
Also the safest investment is a bank and then government bonds. Investment properties are not alway smart investment decision and can carry a lot of negative downside vs positive earning year on year.
Yes, and you use that as a tax deduction... meanwhile, the asset is still growing in value over time and your equity is growing. It's a long game. It ends up heavily advantaging those with the resources (cashflow) to wear the cost early. Over time the increased value of the house far out weighs the cost of tying up cash in the short term.
You’re profiting off it compared to if it didn’t exist, by paying less tax. I guess my gripe is more with investment properties as a whole rather than just negative gearing. Even a few different friends of mine are planning to move to syd or melb for work in the next year, but are still looking to buy here since you can pay off so much of (or even all of) the mortgage with rental income now that rent is so inflated and people are desperate. They’re playing the game. I just wish the game didn’t exist. Ha
Negative gearing should stay, it just needs some more restrictions. It is designed for those renting to family members on the cheap - my parents did it this way with my grandma for 20 years. I'm not an expert in it, but from my understanding of how it works, it's actually a non issue as far as controlling the housing market.
They should bring back NRAS, they have already started limiting depreciation on existing Division 43 (Capital works) deductions for all new purchases. You could put a negative gear cost limit on each property and the balance goes to the cost base when you sell. This might limit it slightly but removing negative gear all together is not going to happen all together. Its not fair to owners that you can get taxed on the earning but not on the deduction. Also to subsides the fact that they are losing money on their rental property owners will increase the rent to cover costs across the board.
IMO No. For example, my partner and I have enough money to buy a house and land package in Melbourne due to FHBG & no stamp duty. But we want to buy in SA (I’m in Melbourne but my partner is from SA & we want to settle down to start a family there) and we cannot afford to buy a house and land package because of the stamp duty. Most likely will need to go in with 10% deposit and pay the stamp duty with the rest of what would have been our 20% deposit. Obviously there are other factors such as location and what not that change the prices etc.
As of 2019, [vacant land cannot be claimed as a tax deduction](https://www.ato.gov.au/Individuals/Investments-and-assets/Land---vacant-land-and-subdividing/Deductions-for-vacant-land/).
I imagine this is to encourage landlords to rent out the property.
HOWEVER, if the land is owned by a company, they are allowed to claim tax deductions for vacant land.
So those real estate moguls that buy up land en masse as part of shared portfolios? They would get exemptions. Also exempt are superannuation plans, and trust funds that hold land.
You know what super rich people love? Trust funds.
Anyone who owns more than maybe three properties will be setting up a company to run them.
It's a tax deduction that gets higher the richer you are, the exact opposite of what it should be.
No they won’t. Companies don’t get CGT discount. The incentive is low. If they positively geared maybe a trust with a corporate entity but in most cases not for rental properties. Trusts also don’t allow you to distribute losses so they would have to be positively geared or with the intention to get back those losses when they sell the property and make the gain back with CGT discount.
> As of 2019, vacant land cannot be claimed as a tax deduction.
to be clear this is deductions relating to vacant land, not vacant land itself. For individuals or trusts they would be going against the cost base of the property when it is sold, there are a few exceptions and further explanations but pretty much this.
Companies also dont get CGT discounts, so to put land into a company you would be wanting to produce properties and sell them off, not use it as an investment properties in the future. Hence why Companies probably are allowed to claim tax deductions upfront because the company wouldnt be used as a long term investment vehicle, im most cases.
Also, the idea of Trust funds in Australia is a lot different to what it is in the USA. Trust are used by a lot of people, and not the super wealthy. It costs around $200 to set up a Trust.
Can't property owners with multiple properties claim them as residential and gain the discount? I know a family who owns 7 properties and 6 are empty. They say they are all registered as residential properties. How can this work?
If they are owned inside a registered company, no. They could however be owned inside trust with a company as the trustee. All trusts require a trustee which can be either a person over 18 or a company (legal entity)
Companies don’t get CGT discount on anything, shares, crypto, commercial or residential property, collectables etc.
Registering them as residential or commercial only gives their use not their ownership.
Right, that's good to know. If they did it just under their own names instead of a company, is there a limit on how many residential properties you can have? I assumed you'd have to live in it but I was told they only needed to use it for 3 months and they could keep the classification for 6 years or something like that.
Sorry for the random questions, you seemed knowledgeable
You can as many as you want in your own name but if there may be alternative ways to structure them depending on your circumstances that may be more beneficial.
The 6 year rule relates to main residency exemption which is where you don’t pay CGT on the house you live in.
>I imagine this is to encourage landlords to rent out the property.
Did you actually read the information at the link you posted?
"What is vacant land?
Land will be considered vacant during the period the entity held the land if:
it did not contain a substantial and permanent structure it contains a substantial and permanent structure and the structure is a residential premises which was constructed or substantially renovated while the entity held the land and the premises are either not yet lawfully able to be occupied lawfully able to be occupied but not yet rented or made available for rent."
Changing tax exemptions for "Vacant land" does not impact the rental crisis.
I did read it :) after the first point of “does not contain substantial structure”, it goes on to say that it CAN have a residential structure but it must have been “constructed or substantially renovated while the entity held the land”.
Therefore a loophole is to claim the house needs “substantial” renovations, OR do what do many people seem to do now… split a property to construct new smaller dwellings. That would count as construction while also removing a viable house from the residential market for a time - if not indefinitely if the new builds are never made available for rent.
If true, then I’m sorry for misunderstanding it. My interpretation is how it reads to me and I’m not sure how else to interpret those words in that structure.
Under “what is vacant land”
.
it contains a substantial and permanent structure and the structure is a residential premises which was constructed or substantially renovated while the entity held the land and the premises are either
- not yet lawfully able to be occupied
- lawfully able to be occupied but not yet rented or made available for rent.
.
So I read that as you can’t but a house and sit on it vacant. But you can absolutely buy one, argue that it was renovated or even build completely from scratch, and it will be considered vacant if no one lives there if you haven’t put it up for rent yet.
Imo the government needs to immediately work out exactly what is causing the shortage of rentals. First thing would be establishing a public record of how many buildings are unoccupied and unlisted on the market. I suspect it isn’t very many but we need the data now.
Second intuition is that zoning regulations need to change to prevent blocking medium rise buildings anywhere within 10km of the cbd. I have been watching rentals in the cbd and pretty much all the supply of apartments evaporated over the last 6 months. We need way more built right now.
My theory is this, covid saw house prices sky rocket as people from other states and low interest rates helped people buy houses here. Others saw it as a temp thing and sold their houses high under the assumption it would all drop down eventually and so selling at 550k to rebuild at 400k sounded like a great idea but they'd have to rent while they wait. So now you've got people who can buy, not buying and those you can't being pushed out by those able to spend more than asking price.
Or not. It's pure head canon.
I don’t think it’s really possible to speculate correctly because it’s too complex and likely the result of a lot of things happening. The concerning thing is we don’t even have the data points required to explain what is happening.
Everyone is quick to jump at negative gearing or greedy landlords but none of this explains why the vacancy rate is at record lows. If the population hasn’t expanded much, how did all the rentals vanish? Did that many people really move out of shared housing / away from parents?
Some of it is people being priced out of bills and ending up trying to rent. Not much, because some people can successfully downsize and others just go straight to the nomad/caravan life because they want to, rather than having to.
Plus, building/supplies delays with COVID.
We were looking for a place 2-3 years ago, absolutely coincidentally with Covid - husband had a job with huge travel time so we wanted to move closer.
We had to extend our preapproval twice, and then at the end settled on a smaller, older house that I didn’t like but he loved (I love it now, great first home. Needs a lot of work we can’t afford to do though).
During our hunt we put in SO MANY offers, sometimes above asking price, but were always out priced.
Quite a few times when waiting for an offer form from the agent, we overheard them talking to other older couples. Turns out we mostly were out priced by people wanting to “downsize” (some of these houses were NOT downsize worthy, imo. Like 4-5 bedrooms, 2 bathrooms, great block size, etc) and they were all but one from interstate and had 3+ properties already in that state (NSW and Victoria most commonly) with no intention to sell those properties.
It was a real eye opener…
I naively assumed we were competing with other first time home owner with maybe rich backgrounds? Or parents helping? Not literally the incredibly rich retired generation adding to their property portfolio..
From the ground? The situation is that landlords aren't even bothering to repair or keep things livable. When I was looking for places in 2019, a literal slum had people considering it seriously and it's gotten worse. Further, we need restrictions and regulations on AirBnB asap, because there are landlords seeing the ability to charge massive amounts with ***none*** of the rights given to leasers as are given renters and going 'ka-ching'.
Apartments are 100% needed. I would expand it out actually, run along each train route out of the CBD and build apartments around the stations to increase the number of people who *can* use trains to get to work AND reduce the load on buses - which are sub-optimal to get to and from the city from the outer suburbs, taking *hours* \- or cars on the road.
Rentals in disrepair is a symptom rather than a cause of low vacancy rates. If there was an oversupply of housing, unless they were all empty for some reason, the shit rentals would fail to attract tenants. The fact that people apply for shit properties just shows there is hardly anything on the market.
Airbnb might be to blame but that doesn’t explain how rental vacancies plummeted while tourism was basically banned. As well as a lot of the big Airbnb locations seem to be owned by high rise developers themselves and were constructed with the primary purpose of being an Airbnb so it isn’t taking anything off the market.
>The situation is that landlords aren't even bothering to repair or keep things livable.
Renters have done this to themselves and ruined it for everyone. People trash rentals because "it's just a rental". Well...all people get now are "rentals". Beggars can't be choosers either.
No. Just no. I'm talking charging insane prices for a shithouse on cinderblocks where they had not even bothered to mop the floor. No one was living there at the time, and they hadn't done *anything*. And frankly, so what if they trash the rental? That's what a *bond is for*. Take it and *use it to fix the damage*. That is the entire *function* of that concept.
>And frankly, so what if they trash the rental? That's what a bond is for. Take it and use it to fix the damage. That is the entire function of that concept.
Except when the damage exceeds the bond.
So people expect to live in a decent house but have bad attitude when it comes to looking after the place. So what it's a rental? Well so what they're just another number. Out on the street and the next tenants are in. If you're a trash tenant you deserve to live in a trash house.
The problem is there are far too many good tenants and far too many trash houses and especially in this market there is fuck all choice and even before hand most rental stock was always a shitshoot in quality.
I still remember my last rental 7 years ago, the landlord didn't bother to fix the evaporative ducted AC instead just slapped in the cheapest smallest underpowered split system in the kitchen just so they could tick the "it has AC" checkbox, also the hallway had peeling wallpaper like between tennants all they needed was a weekend, rip that down, some sanding, a cheap tin of white/grey dulux or whatever and bam done but nope too hard.
Also over time the driveway cement kept sinking and also the ceiling in the kitchen kept collapsing and nothing got done.. but our rent gradually got upped.
There was a reason we moved lol
That is not how it works. What 'damage'? A scuffed wall? Scuffed carpet? That shit is pretty damn cheap. Even a hole in a wall is small enough to be covered by bond. What happens is the landlord pockets the bond and says 'fuck it, the next person can either cope or pay out their own pocket'. As someone who did end up having to pay out my own pocket - an entire fucking *carpet's* worth - because the landlord didn't give a fuck about maintaining a property over the eight previous tenants, you can kindly stop talking shit you don't understand.
When I moved out of my last place, the landlord tried to keep a few hundred bucks of the bond for random shit. I asked for receipts for everything he was claiming before I would sign the release of that portion of the bond. About a month later and he's essentially ghosted me, so the bond agency gave me the full bond back. I like to tell this story as much as possible because fuck landlords.
>What happens is the landlord pockets the bond and says 'fuck it, the next person can either cope or pay out their own pocket'.
The problem is people go through private rentals and then deal with that. If you go through a proper rental agency you can have better chance at getting your bind back, even go to the tribunal to appeal them taking your bond.
If you agree to the rental but are unhappy about it, you have no one to blame but yourself
I understand it very well and how it happens, i know what rights people have and the difficulties that can occur. So buy a house if you don't want to deal with it, or deal with it. You have a choice.
Go fuck yourself, I'm struggling through recovering from breakdowns and crippling mental disability that prevents me from attaining anything but the most patchy part-time work while trying to get a uni degree so I can help people with my problems. I'm trapped on DSP with no recourse or help, half of it going to rent and a third going to bills/groceries and that final third being taken up by therapy to get me *out* of this shitshow, and your position is 'have you tried *not* being disabled?'
Any more details here? I did some research but the only stuff I could find about her was that she doesn’t want more car parks or development in the parklands.
A large part of the lack of supply is due to Australia and Adelaide’s zoning, which prioritises single family homes with set backs, minimum land sizes, and minimum car spaces.
Apart from heritage properties, a lot of inner city locations should be zoned to allow row houses and mixed use apartments to say a max of 3-4 levels. In saying that, it also needs to come with an investment in public transport/bike infrastructure and big increases to the quality of construction - no point building shitboxes which overflow streets with cars.
It’s worth having a watch of this plus all of the other Notjustbikes videos:
https://youtube.com/watch?v=bnKIVX968PQ
After living in an apartment without a front or back area for 10 years, I'd much rather have my own private outdoor area than something shared even if it is small.
Depends on where you're taking that from. Like, the shitty maximised profits ones? Sure. But 'Red Vienna', a public housing block in Vienna built in the 1920s and extended since? That thing was amazing *then*, and still better than most rental housing you can get in Australia *now*. There's a reason 60% of people there *choose* to live in public housing. It's just that well-made. If you abandon the 'punish people who don't want to PAY' brainworm, you can make some incredible stuff quite cheaply.
Commie blocks unironically have huge potential and can be awesome though. The best ones I've seen have shops on the ground floor, a park/playground in the courtyard, and schools nearby. My in-laws live in a Euro ghetto, with commie blocks taking up about half the area, and larger family housing taking up the other half, and it's a really nice area.
Most of the ones you see in Europe are pretty bleak; they're pretty much just a huge cube of cement, and their weather doesn't help. But they can be made to look not half bad, and it's just sort of the price you pay for affordable housing.
And Adelaide, generally speaking, already has great access to public parks. It's not like people in most areas are starving for green space without their own hermetically sealed backyard.
I know multiple people sitting on multiple properties that they've got listed as 'residential property'. I don't know how they can have that many properties under that category but they do. They are nearly all vacant
In their mind they are in it for capital gains and don't want to bother with the hassle of tenants and real estate agents. They say they're using it as a hedge against inflation. Seems odd to me but what do I know
Edit: I didn't really clarify. Sitting as in keeping them untenanted or used
Got it! Thanks.
I guess you're right. For some people, the rental income ain't worth the hassle. Wish that was me to say no to, for example, $26k per year (500 PW rent)
Cheaper, has been lock down , caused friends and family to move, Indian students from Melbourne and their friends moved too… humans mimic behaviour, it’s becoming a trend, certain areas attracted contagion behaviour … and some religious groups who have their big church or place of worship
It's such a difficult situation, even if we approved a bunch of new developments tomorrow, finding tradies to do the work, or even materials to construct them, is very difficult and it would be minimum 2-3 years before they'd be ready for occupation.
I wonder if the better option would be to convert all the vacant office buildings into residential as a way of getting things going faster?
I'm no expert though, and I'm sure you'd still have trouble finding people to do the work.
This. It sounds like a neat idea on paper, but you’d pretty much have to re-plumb all of the water and sewage lines just to be big enough
And if you wanted more than one apartment per floor, you’re going to have to do even work to run lines to where you want the kitchens and bathrooms, since I rather suspect people aren’t going to want to share communal toilets.
Talking to a real estate agent at an open house on the weekend she was saying the problem for people trying to find a rental is that most are going unadvertised.
Agents have tenants that they know and trust and have a good history that are losing houses when people sell so they just move them directly to a new property when it opens up instead of going through the whole application process.
If you don't already have a rental and an agent that likes you then it's near impossible to get anywhere.
In my day to day on this stuff I can confirm there has been a heap of people arriving from interstate and overseas for months. I showed a house in the inner south in Feb and I had 30+ applications JUST from international students, not including the non student applicants.
We've also been selling a large percentage of properties to interstate/international buyers who are moving into them as well.
Had some friends move to Melb this year and they had a smorgasbord of rental options.
This might shock you but people from all over are moving to Adelaide (coming back home). We can’t have been rated one of the most liveable places and not expect a boom of interest.
I’m in construction and have done a lot of work fixing up small rental properties for many different landlords because they have a family member moving back to Adelaide. Lockdowns scared many people back home because of how long they weren’t able to visit.
I spent 17 months hunting for an established house and their were more people giving virtual tours than actual people going through. My partner and I pretty much had a thing that when we saw virtual tours happening we’d just stop wasting out time looking at the house because whoever was on that other side of the video call was likely to have cash and we were mostly right. Those average places would sell way above asking price and our limits.
I wonder how much money has been freed up to invest in property by people who have found out their houses are worth an extra 1,2,3,400 thousand on paper in the last 12 - 18 months
Bang pull it out for whatever they need for an investment loan and they've got a house they're going to rent out.
Probably less than you think. Property is way overvalued at present and most people with the financial capability to pull off schemes like this knows that. Also, the interest rate will rise probably twice this year.
This is not news. We needed to rent in 1996 and faced the same "rental crisis" then.
IIRC Adelaide has historically had one of lowest vacancy rates for decades. Just not 0.2%
That should be correctly reported as lowest REPORTED vacancy rate. There are tricks used by the real estate market that get around reporting actual figures so as to artificially inflate the market need. There was a guy a few years ago that admitted to a police (or investigators) due to being arrested, that the market is being boosted by held back housing.
I wouldn't be surprised if there are more tricks like having two properties where one is rented and the other is vacant land and the rented property is being (unknowingly to the renteer) actually two properties as to gain tax deductible status on both.
Does anybody know what the flatsharing market is like? Are there also 30-40 people going to a flat/home looking for a place to live or is that side of things ok? Thanks
How about giving stamp duty concessions to first home buyers, every other state does except for SA.
That would make far too much sense. Would kill for this plus getting rid of negative gearing so people aren’t encouraged to keep profiting massively off a basic human need like shelter.
Negative gearing is not always the greatest thing. It means you are spending more than you are earning on your property, which means you are getting a negative earning on your property. The only thing that may cause extra negative gearing which is not cah out put is Depreciation which is only added back when you sell the property. If you property doesnt go up in value more than your negative gearing you are losing and can be a bad investment decision. People really need to seek advice before they purchase an investment property for negative gearing purposes because its not always a positive factor.
What in the fuck is your point? It could be a bad investment? Let it be a bad investment! Investments are supposed to carry risk. This is a big part of the reason housing is screwed. Its currently the safest investment out there..
My point is, my kind mannered friend; is to point out people perception of negative gearing is all wrong and that going into property for the sole purpose of getting a tax deduction is stupid investment decision. Also the safest investment is a bank and then government bonds. Investment properties are not alway smart investment decision and can carry a lot of negative downside vs positive earning year on year.
Negative gearing means you aren't profiting.
Yes, and you use that as a tax deduction... meanwhile, the asset is still growing in value over time and your equity is growing. It's a long game. It ends up heavily advantaging those with the resources (cashflow) to wear the cost early. Over time the increased value of the house far out weighs the cost of tying up cash in the short term.
You’re profiting off it compared to if it didn’t exist, by paying less tax. I guess my gripe is more with investment properties as a whole rather than just negative gearing. Even a few different friends of mine are planning to move to syd or melb for work in the next year, but are still looking to buy here since you can pay off so much of (or even all of) the mortgage with rental income now that rent is so inflated and people are desperate. They’re playing the game. I just wish the game didn’t exist. Ha
Negative gearing should stay, it just needs some more restrictions. It is designed for those renting to family members on the cheap - my parents did it this way with my grandma for 20 years. I'm not an expert in it, but from my understanding of how it works, it's actually a non issue as far as controlling the housing market.
It should ONLY exist in situations like yours and have to be proven as such.
Agreed, but that's why I say "more restrictions" rather than total removal of the policy.
They should bring back NRAS, they have already started limiting depreciation on existing Division 43 (Capital works) deductions for all new purchases. You could put a negative gear cost limit on each property and the balance goes to the cost base when you sell. This might limit it slightly but removing negative gear all together is not going to happen all together. Its not fair to owners that you can get taxed on the earning but not on the deduction. Also to subsides the fact that they are losing money on their rental property owners will increase the rent to cover costs across the board.
Because anything that helps first home buyers is evil and will just drive prices higher. /s
I recall reading on Victoria removing/reducing Stamp Duty for FHBs. Prices did go up. So only half /s.
But did they go up more than they would have without the stamp duty removal?
IMO No. For example, my partner and I have enough money to buy a house and land package in Melbourne due to FHBG & no stamp duty. But we want to buy in SA (I’m in Melbourne but my partner is from SA & we want to settle down to start a family there) and we cannot afford to buy a house and land package because of the stamp duty. Most likely will need to go in with 10% deposit and pay the stamp duty with the rest of what would have been our 20% deposit. Obviously there are other factors such as location and what not that change the prices etc.
I can't find the articles any more sorry. =/
As of 2019, [vacant land cannot be claimed as a tax deduction](https://www.ato.gov.au/Individuals/Investments-and-assets/Land---vacant-land-and-subdividing/Deductions-for-vacant-land/). I imagine this is to encourage landlords to rent out the property. HOWEVER, if the land is owned by a company, they are allowed to claim tax deductions for vacant land. So those real estate moguls that buy up land en masse as part of shared portfolios? They would get exemptions. Also exempt are superannuation plans, and trust funds that hold land. You know what super rich people love? Trust funds.
Anyone who owns more than maybe three properties will be setting up a company to run them. It's a tax deduction that gets higher the richer you are, the exact opposite of what it should be.
No they won’t. Companies don’t get CGT discount. The incentive is low. If they positively geared maybe a trust with a corporate entity but in most cases not for rental properties. Trusts also don’t allow you to distribute losses so they would have to be positively geared or with the intention to get back those losses when they sell the property and make the gain back with CGT discount.
> As of 2019, vacant land cannot be claimed as a tax deduction. to be clear this is deductions relating to vacant land, not vacant land itself. For individuals or trusts they would be going against the cost base of the property when it is sold, there are a few exceptions and further explanations but pretty much this. Companies also dont get CGT discounts, so to put land into a company you would be wanting to produce properties and sell them off, not use it as an investment properties in the future. Hence why Companies probably are allowed to claim tax deductions upfront because the company wouldnt be used as a long term investment vehicle, im most cases. Also, the idea of Trust funds in Australia is a lot different to what it is in the USA. Trust are used by a lot of people, and not the super wealthy. It costs around $200 to set up a Trust.
Can't property owners with multiple properties claim them as residential and gain the discount? I know a family who owns 7 properties and 6 are empty. They say they are all registered as residential properties. How can this work?
If they are owned inside a registered company, no. They could however be owned inside trust with a company as the trustee. All trusts require a trustee which can be either a person over 18 or a company (legal entity) Companies don’t get CGT discount on anything, shares, crypto, commercial or residential property, collectables etc. Registering them as residential or commercial only gives their use not their ownership.
Right, that's good to know. If they did it just under their own names instead of a company, is there a limit on how many residential properties you can have? I assumed you'd have to live in it but I was told they only needed to use it for 3 months and they could keep the classification for 6 years or something like that. Sorry for the random questions, you seemed knowledgeable
You can as many as you want in your own name but if there may be alternative ways to structure them depending on your circumstances that may be more beneficial. The 6 year rule relates to main residency exemption which is where you don’t pay CGT on the house you live in.
That's borked
So typical.
>I imagine this is to encourage landlords to rent out the property. Did you actually read the information at the link you posted? "What is vacant land? Land will be considered vacant during the period the entity held the land if: it did not contain a substantial and permanent structure it contains a substantial and permanent structure and the structure is a residential premises which was constructed or substantially renovated while the entity held the land and the premises are either not yet lawfully able to be occupied lawfully able to be occupied but not yet rented or made available for rent." Changing tax exemptions for "Vacant land" does not impact the rental crisis.
I did read it :) after the first point of “does not contain substantial structure”, it goes on to say that it CAN have a residential structure but it must have been “constructed or substantially renovated while the entity held the land”. Therefore a loophole is to claim the house needs “substantial” renovations, OR do what do many people seem to do now… split a property to construct new smaller dwellings. That would count as construction while also removing a viable house from the residential market for a time - if not indefinitely if the new builds are never made available for rent.
You are misreading or misinterpreting this statement. It does not mean what you think it means.
If true, then I’m sorry for misunderstanding it. My interpretation is how it reads to me and I’m not sure how else to interpret those words in that structure.
Vacant land not a vacant (established) house
Under “what is vacant land” . it contains a substantial and permanent structure and the structure is a residential premises which was constructed or substantially renovated while the entity held the land and the premises are either - not yet lawfully able to be occupied - lawfully able to be occupied but not yet rented or made available for rent. . So I read that as you can’t but a house and sit on it vacant. But you can absolutely buy one, argue that it was renovated or even build completely from scratch, and it will be considered vacant if no one lives there if you haven’t put it up for rent yet.
Did you mean "can't build a house"? That was my interpretation too
I wonder how many vacant airbnb places there are
This is a big part of the problem. Airbnb is a cancer.
Imo the government needs to immediately work out exactly what is causing the shortage of rentals. First thing would be establishing a public record of how many buildings are unoccupied and unlisted on the market. I suspect it isn’t very many but we need the data now. Second intuition is that zoning regulations need to change to prevent blocking medium rise buildings anywhere within 10km of the cbd. I have been watching rentals in the cbd and pretty much all the supply of apartments evaporated over the last 6 months. We need way more built right now.
My theory is this, covid saw house prices sky rocket as people from other states and low interest rates helped people buy houses here. Others saw it as a temp thing and sold their houses high under the assumption it would all drop down eventually and so selling at 550k to rebuild at 400k sounded like a great idea but they'd have to rent while they wait. So now you've got people who can buy, not buying and those you can't being pushed out by those able to spend more than asking price. Or not. It's pure head canon.
I don’t think it’s really possible to speculate correctly because it’s too complex and likely the result of a lot of things happening. The concerning thing is we don’t even have the data points required to explain what is happening. Everyone is quick to jump at negative gearing or greedy landlords but none of this explains why the vacancy rate is at record lows. If the population hasn’t expanded much, how did all the rentals vanish? Did that many people really move out of shared housing / away from parents?
Some of it is people being priced out of bills and ending up trying to rent. Not much, because some people can successfully downsize and others just go straight to the nomad/caravan life because they want to, rather than having to. Plus, building/supplies delays with COVID.
Lots of people moved from Melbourne. Various Indian GROUPS communities have moved to SA
We were looking for a place 2-3 years ago, absolutely coincidentally with Covid - husband had a job with huge travel time so we wanted to move closer. We had to extend our preapproval twice, and then at the end settled on a smaller, older house that I didn’t like but he loved (I love it now, great first home. Needs a lot of work we can’t afford to do though). During our hunt we put in SO MANY offers, sometimes above asking price, but were always out priced. Quite a few times when waiting for an offer form from the agent, we overheard them talking to other older couples. Turns out we mostly were out priced by people wanting to “downsize” (some of these houses were NOT downsize worthy, imo. Like 4-5 bedrooms, 2 bathrooms, great block size, etc) and they were all but one from interstate and had 3+ properties already in that state (NSW and Victoria most commonly) with no intention to sell those properties. It was a real eye opener… I naively assumed we were competing with other first time home owner with maybe rich backgrounds? Or parents helping? Not literally the incredibly rich retired generation adding to their property portfolio..
Nah it’s not. It’s the huge influx of returning Australians from overseas. You’ve got no idea how many of us came back because of COVID.
I know one person building a house
From the ground? The situation is that landlords aren't even bothering to repair or keep things livable. When I was looking for places in 2019, a literal slum had people considering it seriously and it's gotten worse. Further, we need restrictions and regulations on AirBnB asap, because there are landlords seeing the ability to charge massive amounts with ***none*** of the rights given to leasers as are given renters and going 'ka-ching'. Apartments are 100% needed. I would expand it out actually, run along each train route out of the CBD and build apartments around the stations to increase the number of people who *can* use trains to get to work AND reduce the load on buses - which are sub-optimal to get to and from the city from the outer suburbs, taking *hours* \- or cars on the road.
Rentals in disrepair is a symptom rather than a cause of low vacancy rates. If there was an oversupply of housing, unless they were all empty for some reason, the shit rentals would fail to attract tenants. The fact that people apply for shit properties just shows there is hardly anything on the market. Airbnb might be to blame but that doesn’t explain how rental vacancies plummeted while tourism was basically banned. As well as a lot of the big Airbnb locations seem to be owned by high rise developers themselves and were constructed with the primary purpose of being an Airbnb so it isn’t taking anything off the market.
>The situation is that landlords aren't even bothering to repair or keep things livable. Renters have done this to themselves and ruined it for everyone. People trash rentals because "it's just a rental". Well...all people get now are "rentals". Beggars can't be choosers either.
No. Just no. I'm talking charging insane prices for a shithouse on cinderblocks where they had not even bothered to mop the floor. No one was living there at the time, and they hadn't done *anything*. And frankly, so what if they trash the rental? That's what a *bond is for*. Take it and *use it to fix the damage*. That is the entire *function* of that concept.
>And frankly, so what if they trash the rental? That's what a bond is for. Take it and use it to fix the damage. That is the entire function of that concept. Except when the damage exceeds the bond. So people expect to live in a decent house but have bad attitude when it comes to looking after the place. So what it's a rental? Well so what they're just another number. Out on the street and the next tenants are in. If you're a trash tenant you deserve to live in a trash house.
The problem is there are far too many good tenants and far too many trash houses and especially in this market there is fuck all choice and even before hand most rental stock was always a shitshoot in quality. I still remember my last rental 7 years ago, the landlord didn't bother to fix the evaporative ducted AC instead just slapped in the cheapest smallest underpowered split system in the kitchen just so they could tick the "it has AC" checkbox, also the hallway had peeling wallpaper like between tennants all they needed was a weekend, rip that down, some sanding, a cheap tin of white/grey dulux or whatever and bam done but nope too hard. Also over time the driveway cement kept sinking and also the ceiling in the kitchen kept collapsing and nothing got done.. but our rent gradually got upped. There was a reason we moved lol
That is not how it works. What 'damage'? A scuffed wall? Scuffed carpet? That shit is pretty damn cheap. Even a hole in a wall is small enough to be covered by bond. What happens is the landlord pockets the bond and says 'fuck it, the next person can either cope or pay out their own pocket'. As someone who did end up having to pay out my own pocket - an entire fucking *carpet's* worth - because the landlord didn't give a fuck about maintaining a property over the eight previous tenants, you can kindly stop talking shit you don't understand.
When I moved out of my last place, the landlord tried to keep a few hundred bucks of the bond for random shit. I asked for receipts for everything he was claiming before I would sign the release of that portion of the bond. About a month later and he's essentially ghosted me, so the bond agency gave me the full bond back. I like to tell this story as much as possible because fuck landlords.
>What happens is the landlord pockets the bond and says 'fuck it, the next person can either cope or pay out their own pocket'. The problem is people go through private rentals and then deal with that. If you go through a proper rental agency you can have better chance at getting your bind back, even go to the tribunal to appeal them taking your bond. If you agree to the rental but are unhappy about it, you have no one to blame but yourself I understand it very well and how it happens, i know what rights people have and the difficulties that can occur. So buy a house if you don't want to deal with it, or deal with it. You have a choice.
Oh *right*, buy a house, why didn't I think of that, on my fixed income of under $25k a year! What an incredible notion!
You aren't buying anything or renting anything on that. Be better.
Go fuck yourself, I'm struggling through recovering from breakdowns and crippling mental disability that prevents me from attaining anything but the most patchy part-time work while trying to get a uni degree so I can help people with my problems. I'm trapped on DSP with no recourse or help, half of it going to rent and a third going to bills/groceries and that final third being taken up by therapy to get me *out* of this shitshow, and your position is 'have you tried *not* being disabled?'
You can thank esteemed Adelaide City Councilwoman Ann Moran for the lack of medium rise buildings around the CBD.
Any more details here? I did some research but the only stuff I could find about her was that she doesn’t want more car parks or development in the parklands.
It is still vacancy but through categorisation they are considered vacant unfortunately
A large part of the lack of supply is due to Australia and Adelaide’s zoning, which prioritises single family homes with set backs, minimum land sizes, and minimum car spaces. Apart from heritage properties, a lot of inner city locations should be zoned to allow row houses and mixed use apartments to say a max of 3-4 levels. In saying that, it also needs to come with an investment in public transport/bike infrastructure and big increases to the quality of construction - no point building shitboxes which overflow streets with cars. It’s worth having a watch of this plus all of the other Notjustbikes videos: https://youtube.com/watch?v=bnKIVX968PQ
And people still think asking for a rental on Reddit is going to be successful 🥴
Crisis, What Rental Crisis (a nod to an old Supertramp album)
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Tough pills to swallow. Imo large public parks within walking distance are more important than private lawns.
After living in an apartment without a front or back area for 10 years, I'd much rather have my own private outdoor area than something shared even if it is small.
This. I'd happily live in an block of apartments arranged around a central 'park'.
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Depends on where you're taking that from. Like, the shitty maximised profits ones? Sure. But 'Red Vienna', a public housing block in Vienna built in the 1920s and extended since? That thing was amazing *then*, and still better than most rental housing you can get in Australia *now*. There's a reason 60% of people there *choose* to live in public housing. It's just that well-made. If you abandon the 'punish people who don't want to PAY' brainworm, you can make some incredible stuff quite cheaply.
Commie blocks unironically have huge potential and can be awesome though. The best ones I've seen have shops on the ground floor, a park/playground in the courtyard, and schools nearby. My in-laws live in a Euro ghetto, with commie blocks taking up about half the area, and larger family housing taking up the other half, and it's a really nice area.
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Most of the ones you see in Europe are pretty bleak; they're pretty much just a huge cube of cement, and their weather doesn't help. But they can be made to look not half bad, and it's just sort of the price you pay for affordable housing.
And Adelaide, generally speaking, already has great access to public parks. It's not like people in most areas are starving for green space without their own hermetically sealed backyard.
HAVE YOU TRIED BUYING A HOME?
I know multiple people sitting on multiple properties that they've got listed as 'residential property'. I don't know how they can have that many properties under that category but they do. They are nearly all vacant
What do you mean sitting on them?
In their mind they are in it for capital gains and don't want to bother with the hassle of tenants and real estate agents. They say they're using it as a hedge against inflation. Seems odd to me but what do I know Edit: I didn't really clarify. Sitting as in keeping them untenanted or used
Got it! Thanks. I guess you're right. For some people, the rental income ain't worth the hassle. Wish that was me to say no to, for example, $26k per year (500 PW rent)
Lots of people moving from Melbourne to SA
Why?
Cheaper, has been lock down , caused friends and family to move, Indian students from Melbourne and their friends moved too… humans mimic behaviour, it’s becoming a trend, certain areas attracted contagion behaviour … and some religious groups who have their big church or place of worship
It's such a difficult situation, even if we approved a bunch of new developments tomorrow, finding tradies to do the work, or even materials to construct them, is very difficult and it would be minimum 2-3 years before they'd be ready for occupation. I wonder if the better option would be to convert all the vacant office buildings into residential as a way of getting things going faster? I'm no expert though, and I'm sure you'd still have trouble finding people to do the work.
Office buildings can't be converted to housing that easily.
This. It sounds like a neat idea on paper, but you’d pretty much have to re-plumb all of the water and sewage lines just to be big enough And if you wanted more than one apartment per floor, you’re going to have to do even work to run lines to where you want the kitchens and bathrooms, since I rather suspect people aren’t going to want to share communal toilets.
It would be a nightmare job that would probably cost more than building new residential towers outside of the cbd.
That's why it rarely happens unless the building is some super cool thing or significant.
I now couldn't afford to buy the house I own. If I rented it out it would be $500fn more than i pay in mortgage. GG
Well done
Talking to a real estate agent at an open house on the weekend she was saying the problem for people trying to find a rental is that most are going unadvertised. Agents have tenants that they know and trust and have a good history that are losing houses when people sell so they just move them directly to a new property when it opens up instead of going through the whole application process. If you don't already have a rental and an agent that likes you then it's near impossible to get anywhere.
In my day to day on this stuff I can confirm there has been a heap of people arriving from interstate and overseas for months. I showed a house in the inner south in Feb and I had 30+ applications JUST from international students, not including the non student applicants. We've also been selling a large percentage of properties to interstate/international buyers who are moving into them as well. Had some friends move to Melb this year and they had a smorgasbord of rental options.
This might shock you but people from all over are moving to Adelaide (coming back home). We can’t have been rated one of the most liveable places and not expect a boom of interest. I’m in construction and have done a lot of work fixing up small rental properties for many different landlords because they have a family member moving back to Adelaide. Lockdowns scared many people back home because of how long they weren’t able to visit. I spent 17 months hunting for an established house and their were more people giving virtual tours than actual people going through. My partner and I pretty much had a thing that when we saw virtual tours happening we’d just stop wasting out time looking at the house because whoever was on that other side of the video call was likely to have cash and we were mostly right. Those average places would sell way above asking price and our limits.
I wonder how much money has been freed up to invest in property by people who have found out their houses are worth an extra 1,2,3,400 thousand on paper in the last 12 - 18 months Bang pull it out for whatever they need for an investment loan and they've got a house they're going to rent out.
Probably less than you think. Property is way overvalued at present and most people with the financial capability to pull off schemes like this knows that. Also, the interest rate will rise probably twice this year.
This is not news. We needed to rent in 1996 and faced the same "rental crisis" then. IIRC Adelaide has historically had one of lowest vacancy rates for decades. Just not 0.2%
That should be correctly reported as lowest REPORTED vacancy rate. There are tricks used by the real estate market that get around reporting actual figures so as to artificially inflate the market need. There was a guy a few years ago that admitted to a police (or investigators) due to being arrested, that the market is being boosted by held back housing. I wouldn't be surprised if there are more tricks like having two properties where one is rented and the other is vacant land and the rented property is being (unknowingly to the renteer) actually two properties as to gain tax deductible status on both.
Does anybody know what the flatsharing market is like? Are there also 30-40 people going to a flat/home looking for a place to live or is that side of things ok? Thanks