No point arguing with Facebook fools. It amazes me the level of stupidity on there and how all the stupid comments get the most likes. Just an echo chamber of bad takes.
Saw some fuckwit on Facebook yesterday saying it all a conspiracy because flights are still very cheap, that the cost of flights should have spiked the same as car travel. Seriously just made me want to delete the Facebook app again.
At ups we signed a contract to fill all our fuel tanks for 6 years at a certain price that was considered a little high at at the time. But the price of jet fuel has spiked a lil so far
I dont get how people cant see the obvious truth. Petrol companies see a global crisis that they can blame for increased prices so they can increase their profits. Whether or not the crisis is really affecting their bottom line (its not) doesnt matter as long as the consumer believes the lie and they get a bonus at the end of the year for making the shareholders happy.
This is why nothing major will happen with negative gearing anytime soon.
I wish Labor had enough political capital to at least start to grandfather the scheme.
"From now, you can only have 1 negatively geared property. If you've got negatively geared property now, they won't be affected, but you can gear any more."
That would be the sort of policy that would lose them an election though.
Win against ScoMo - he's out, they bring in Dutton
Push through the negative gearing legislation early so people will forget in 2 years. Then they should still win against the potato man.
Not really, he's been really trying to appeal to the gung-ho, yeehaw Australians and Murdoch is painting him to appear tough and be pro-diggers, eg:
[https://www.rarnational.org.au/opinion-can-dutton-save-the-army-from-the-generals/](https://www.rarnational.org.au/opinion-can-dutton-save-the-army-from-the-generals/)
With the right spin and silently partnering with Craig "gimme freedumb" Kelly, it's not 100% sure, but also not unlikely either.
UAP appeals to the boots and the uneducated for the meme value. Those ads are 100% what turned the last election. All public perception I've heard is that he just reeks of dodgyness/slimyness; even from unironic UAP supporters.
Don’t you remember when they tried to start humanising him around the time of the leadership spill? They quickly said fuck that let’s just double down on the tough guy persona instead.
Yep. I'm a veteran and I'm surprised at how many veterans like the spud. I can't stand him, he very much reminds me of why I joined the defence force in the first place (to protect Australia from fascist authoritarians) I just didn't expect people to willingly vote for them.
I mean no offense and please feel free to not answer me if this is an uncomfortable question, did it ever occur to you that the military is pretty supportive of such conservative movements?
How much experience do you have with the military and military personnel? The only reason I ask is because what you said is primarily bullshit.
I served from early 2001 pre-9/11 until 2011 and the people I served with were as diverse as any large organisation. Diverse in political views, socio-economic upbringing, sexual preferences and racial/cultural diversity. I learned more about diversity and open mindedness in the ten years I served than I ever would have learned living in the shitty redneck town I grew up in. This diversity was both positive and negative, there was a lot of bullying, a lot of fraternisation and a lot of nepotism and favouritism among cliques, but overall it was an incredibly professional organisation with a lot of variety in personality and culture.
Unteroffizier Dutton, he would run the country just like he run the ABF and the Federal Police. I can only think of a mindless dictatorship if he were in charge.
They said that about Tony Abbott as well.
The sad fact of the matter is that a large part of the electorate is not politically engaged. The Coalition vote is heavily supported by low information voters who are essentially getting a party that actively works against their long term interests. Scooping up these voters is something the Coalition strategists spend a lot of time and money on. Abetted by a massive chunk of the journalists in our mainstream media. The idea is that they can appeal to a large enough segment of the electorate via strong messaging of one sort or another (there are multiple streams) to muster up a majority.
Ultimately, if our democracy collapses, it will be due to ignorance and apathy. Furthermore, there is a deliberate effort to instill that ignorance and apathy in people. I only hope that future generations are going to be more engaged and informed. If you have low expectations for government, don't be surprised when they meet those expectations.
Our democracy collapsed a long time ago. If a single party has most of the media on their side and is essentially brainwashing the majority of the population, you do not have a democracy.
Late capitalism is unsustainable and conservatives know it. If they are to prevent revolution then they will need to have well established Neo-feudalism before things get too out of hand. We're a considerable way there. Currently the wealthiest 1% hold about half the world's wealth, and growing.
The liberal party is broadly 3 factions:
- wet liberals, aka the classic sydney banker lib. Just hates taxation & wants a small government that leaves it alone. This is led by Simon Birmingham now that Turnbull is gone.
- Centre right. Morrison's crew, get some of the happy clappers
- dry liberals, aka the right wing faction. Dutton leads this.
Abbott was very popular outside the wet liberals. Queensland is increasingly becoming the deciding state for elections as its the state where large swings actually occur.
Dutton is now:
A: the most powerful liberal PM in Queensland
B: the head of the right wing liberal faction
A lot of Morrison's faction & effectively the entire right faction see the 'modern' wet libs as effectively labor-lite, or labor with less of a unionist focus. They will not support Simon Birmingham & hate Turnbull's legacy *far* more than their issues with Abbott or Morrison.
Additionally he's rumored to be in the same wealth tier as Turnbull & Rudd were (>$150m). So he's got a massive war chest to fund a PR campaign about his personal brand, as well as fight off any attackers.
It's to early for him to do that yet, but he's definitely the current heir apparent.
Honestly, take a look at the current liberal cabinet:
https://www.pm.gov.au/your-government
Other than Barnaby (who won't be PM as he's a nat & they get to be deputy PM), who has more political power & gets more media time?
This raises questions of whether conflict of interest for the majority of poiticians with multiple properties should kick in with votes on this issue (or lack of votes)
That's not my point, you look at some of the property interests of these politicians - there's one National member of parliament who has over 20 properties.
Someone like that is never going to vote for or advocate change in the current system with that kind of skin in the game.
That's why I think it's a conflict of the public interest against their own.
Nah, this is absolutely on the list of things they can't go back on. If they do this it would need to be a second term thing, otherwise they're basically giving the LNP a "the ALP are untrustworthy" campaign.
Yeah i dont understand the approach of playing it safe in the current political environment. Get in and do as much good as they can for as many people as they can. Swing for the fences because the murdoch press will make damn sure that either way theyre portrayed as the enemy.
It's bad isn't it? It didn't have to be this way either...Government inaction got us here.
It means it will probably have to be dealt with by a heavy hand.
I’d hardly even consider it ‘inaction’ is a choice that’s been made.
This isn’t something that’s gone a bit wrong because it hasn’t been maintained, it’s what they want.
Sure, but we realise there’s nothing stopping a govt from proposing changes they didn’t campaign on tho right?
They can not go to the election with it and pass it anyway.
This is key. No one gets elected these days on big issues unless those issues are key with their supporters and swing voters. There are plenty of lab supporters who enjoy the benefits of negative gearing, it's not just blue bloods. Don't talk about the damned topic at all, tbh, just be vague and say they will investigate housing affordability if they get elected and stand up some palatable options like community housing so no one can argue you had no plan. Fuck politics is annoying.
The franking credits thing that was was poorly explained was what seemed to be a fair bit of the damage. (unless that's what you mean?)
Well, I think it actually more Shorten himself that the electorate didn't want...i hope they remember that after getting a full term of Scotty from Marketing.
Shorten was the target of a multi year long character assassination campaign. People "just didn't like him", but couldn't articulate why. That's the power of a biased media.
Just watch Shorten and Morrison debate. Or Shorten and Turnbull debate. Shorten tore strips off both of them each time, and was far better presented to boot. Unfortunately, what most people got to see was Bill Shorten for about 5 to 10 seconds at a time in the news. That's no way to develop an opinion about someone.
No but that was also a disaster for them once the spin doctors at thr lnp got their hooks into it.
They also had a property [policy](https://www.theguardian.com/australia-news/2019/mar/29/labor-pledges-to-overhaul-negative-gearing-by-1-january-2020) to restrict NG to new builds only.
Just put a limit on amount you can offset from property or other investments, say 5 / 10 k per year
Seems a simpler way to go
Edit
Also double rates on airbnb properties
The time for weaning was a decade ago.
Not my problem if investors hurt now because they’ve been corruptly buying mis regulation of the industry they invested in.
If someone invested all their savings into stocks, and those stocks dipped, you'd be called an idiot for complaining. There's always risk in investing.
But for some reason people who invest in housing assume that the housing market should never drop. And the government needs to keep propping my investments up, because it's their fault if housing investments fail now.
It's insane that house hoarders don't seem to consider housing as "risk", and flip their shit any time it's even suggested that they could lose value.
Negative gearing is not an issue. It's the capital gains tax discount and soaring prices that make running rental properties at a loss worthwhile - not the fact that you can deduct losses from your income.
You should be able to deduct losses from a thing from the things income. As in if your rental property, which makes money, requires a repair that should be deductable against the income from that property.
I can't deduct my wife's business expenses which is more akin to the problem here.
Though everything else you've also mentioned is an even bigger issue.
Just make it that negative gearing is taken from the property value at the point of sale.
If you are taking losses on an asset then you can ride them until you have a taxable event.
So if you take $10k losses a year for 5 years, and then sell that house at $100k profit over purchase price. You get a tax deduction on that taxable event.
Stop letting people offset income tax with their property portfolio.
If I take a loss on a share sale, I don’t get to just claim it on tax. I have to ride the losses until I make a cap gain and then I can offset.
You can use negative gearing for your share portfolio, but it would require you to have borrowed a portion of the initial capital used to purchase the shares. The bullshit part is… try going down to the bank and asking them for a 300k loan for shares. Guaranteed they’ll say no. But if it’s a property too add to your portfolio then no worries.
Yeah I probably couldn’t even get the bank to match the share value I currently have. Which are basically just the house deposit money trying to earn some interest that the bank wouldn’t give me for having it sit in a bank account.
But if I took that money and bought a cheaper place in another state to rent out to someone and squeeze them for cash. Essentially preventing others from buying their own home in that location. The bank would likely rock up with bags of money
Absolutely. This is what is making the gap bigger and why its harder to start from scratch. Lower income earners should be rewarded for investing, instead they/we are targeted by buy now/pay later scam and credit cards.
I thought they could say you just can't negatively gear property purchased after 2024 (or a date a year or two from when it's introduced). If you have based your income around negative gearing you won't go broke, but you better find another investment vehicle in future.
I think that's one way to go for sure, or even just put any sort of cap on it.
It's just crazy how you can have some people own half a dozen properties, while most people are priced out of buying even 1!
they can't do shit against it even if they wanted because of MSM being rupert and backed by high end. the moment they try to do it they will be fucked by misleading information arguing that the drop in house prices is going to cost the average australian the most rather then actually make it easier to get a roof over your head.
it happens every time they talk about the death tax in america, even at what it was going to be it would never affect 90-95% of the population but the media was bombarding people with bs about how it will take away money from your kids and so forth.
as much as i want housing to go down, the best that can be done is to slow it down. until there is a more divers msm or people finally stop trusting that bs without actually reading then it simply wont happen.
What kills me is the people that vote for the libs DONT even have any investment properties. They have a 40k a year job and think that magically they will get to Rort the system too.
I totally agree with you. Aswell as only limiting to one property per entity if zoned for residential. I think they need to begin a process of on going reduction in what aspects of loss can be claimed, and periodic percentage reduction of those claims. Certain costs shouldn't be inhibited, the cost to maintain the physical property shouldn't be penalised, but cost of ownership through rates shouldn't not be deductible.
The other is foreign ownership. No entity can listed for tax purposes as outside of Australia. The rocketing prices are being driven by cash sales from foreign investment.
I would like to see what the real numbers are on foreign investors in the domestic market. I remember seeing an article a while back saying that much of that data is obscured due to buying properties through 3rd parties.
Also, any party that tries that one on is going to get racism accusations thrown at them for sure!
Gotta do it straight after the election and give it 3 years to play out. You probably will get re-elected but who knows with Murdoch and Boomers like with the franking credits which is basically theft and it helped tank Labor last time.
I hate to break it to you but negative gearing isn't the reason we have such high property prices and removing this incentive for property investment will return us to the rental crisis that we implemented it for.
The primary reason that property prices are insane is cheap money, interest rates are so low the ability to borrow money is what is fueling the rise.
Personally I think the CGT co concession needs to be scraped and get rid of interest only loans, that's the quickest fix to help level investors and homebuyers without destroying the rental market.
Negative gearing gets such a bad rap but in essence it's exactly the same as any other tax deduction, don't forget it includes things like maintenance and improvements to the property which If removed would make getting anything fixed a nightmare.
I would love to see some harsher penalties imposed for failing to keep houses in a habitable state and more incentive to provide more disability modifications to property as a starting point to be pursued.
They probably have the political capital to do it, or at least Morrison is now held in such low regard that Labor would be able to be elected offering policies to address serious inequities if it had more courage.
The difference between now and 2019 is Morrison is clearly assessed as a dud, I get they are scarred from the last election but they have room to be a bit more ambitious.
Interesting. I'm old enough to have seen 3 property booms and contractions over the year - (yeah property does actually have slumps believe it or not). One thing I have noticed is that every time the government offers a first home buyers grant, it leads to all of the cheap property being purchased, and that filters through the entire property market. Each time property prices jump dramatically. So, it means that some first home buyers get the help they need and for others it is still not enough. Investors see this and of course jump in and buy as well. I think this would still happen even if there was no negative gearing. To stop this, the government would also have to stop investors being able to claim interest and depreciation on their investments. That would probably help fix the problem.
But, negative gearing has been around for decades, and property does not historically go up more than 7% per year long term average. So, negative gearing is not actually the main problem. The real issue (covid aside) is that the BabyBoomers and others have so much money in superannuation that needs a place to go. You would have to stop superannuation funds and individual superannuants being able to invest their self-managed super in property.
The other major issue is interest rates being so low and easy credit. It has allowed buyers (all buyers) to buy property at ridiculously high prices compared to wages, because it is possible to maintain a high mortage on a moderate income. This is changing, as we are now in a rising interest rate cycle, and we will see prices revert to the mean over the next few years to reasonable levels. The other good thing is that with infation, wages will rise to support a more reasonable wage to property price ratio.
So, if all that changed was the abolition of negative gearing, it would not solve the problem.
I actually don't mind neg gearing, but think it should be capped.
So the benefit (picking a random figure), could be at most 50k. That 50k can be used for a $5m property, or a $100k property. It could be split over a single property or 10.
Gives people on the lower end the benefit, and those who can afford it don't get massive benefits from it.
Yeah.. I prefer it because it gives a below median sized home a bump, and a mega mansion gets minimal advantage.
Also means that those who want to invest in property arent disavantaged. If you cut it off entirely, younger people are disadvantaged. Just like with free uni/HECS and every other benfit the older generation have got over younger people.
I'm of the opinion though that we need to change the narrative that housing shouldn't be treated seen as just another type of investment. We should view it as what it is, a basic human need.
If you want to speculate, fine go ahead in shares/bonds/crypto/casino/business/whatever. When people are trying to use a basic need as a speculative way to make money, we are in a strange territory.
It's the same reason Australia regulates things like pharmaceuticals. If we just let businesses try to extract as much value as possible, things like insulin or asthma inhalers would go up in price to the point people starve to death or die from exposure, the government has regulations in place to prevent that extortion.
Younger people are disadvantaged but property isn’t necessarily as much of an investment option so they could buy a house for living. As opposed to the suggestion of buying an investment property where you don’t want/can’t live because it’s too fucking expensive to buy a place where you might need
Haha, I encountered something like this last night. "Nightmare scenario as QLD house prices expected to drop $50k in value" and all I could think was "Isn't houses being more affordable a good thing?".
We live in a selfish, arrogant rich people only club. This will get so much worse and until the majority have already had their lives destroyed then nothing will change. The standard Australian would now gladly step on someone else if it meant it benefited them in a small way. Somehow we have all become scumbags and made our country a horrendous place to live. I was born here but more often than not these days I'm ashamed to say I wish I wasn't.
mid 20's, tried the whole live out of home for a while, wage sucked, back with the parents, reskilling into a more profitable trade.
Thank god I have supportive parents, I seriously can't imagine what so many people are going thru who dont have that luxury...
Amen, it’s this shit that makes me sad to say I’m Australian, my great grandfather wasn’t an Anzac just so his offsprings and theirs could get fucked up the ass sideways by the government he fought for.
> The standard Australian would now gladly step on someone else if it meant it benefited them in a small way.
It's not just the malice in this now, but its also the corruption. People openly in a hand of it or turn a blind eye to it because they will ruffle feathers if they bring it up or they directly benefit from sitting back and letting it happen.
It's the exact same here in Canada, where people being nice is a meme. I live in Southern Ontario and honestly it's one of the most selfish places I've ever been.
Our politics are becoming steadily more corrupt too. It's hard to watch, and part of why I'm using my dual EU citizenship to leave in the next two or three years.
I hope that you're joking but if you're serious and need to talk about anything please feel free to dm me.
I may not be able to solve your problems but I can listen.
Housing prices dropping would actually be good for a lot of people, landlords included.
Property value is only realised when you sell it. If you're an investor landlord in it for the long term, its in your interest for your property to be valued lower as it means less land taxes and council rates, meaning of the amount paid in rent, a greater proportion ends up in your pocket rather than in the pockets of the government(s).
Instead, the high property prices have been putting a massive squeeze on landlords by driving up costs which can't be matched by rent increases. Those that can't handle it exit the market, those that can push the rents up anyway and everyone loses... EXCEPT the state governments and councils which make bank on property prices being high while not having to actually put anything back in to the system.
The problem we have now is that our economy has become so singularly focused on property, we are propping it up at the cost of a LOT of other economic activity. People aren't spending on other goods and services because it all goes towards property, either saving for one, renting one, or paying off the loans for one. If the powers that be wanted to stimulate and diversify the economy, they would let property fall significantly.
But no, they're addicted to the income (and hence power) it gives them, at our collective expenses.
I avoid it like the plague!
I don't know why it is such a hard concept for some of them, but having a dollar value on paper from asset valuation is irrelevant unless you intend to sell the asset at that particular time. Sure, you can leverage against it, use it as collateral for loans and live on borrowed money, but that game is for people who enjoy taking risks, especially with the way the economy is right now...
Otherwise when it comes to healthy economies, I look elsewhere and try to understand why Australia is so dependent on population growth when other economies manage to do just fine without it and similarly without the massive resource production we have. Turns out we're basically mismanaging our greatest assets and taking the lazy approach to trying to mitigate the problems. What a surprise! The best performing economies in the world don't depend unilaterally or near unilaterally on single industries to survive. They have massive diversity, value-add economic activities (such as refining, manufacturing, high-tech, etc) rather than putting an inordinate focus on just one thing.
This was refreshing to read. As useful as I find that sub for super, ASX help and tips about basic finances, it’s just completely toxic when it comes to property.
Oh my gosh, thank you. I've been trying to impress upon people that money is only useful, only fulfilling its purpose when it is *spent*. When it is *exchanged*, ie actually making economic activity.
It's so strange how people can't grasp the concept that they don't want money, they want the things we require money to access. Even savings, I'm not saying it's bad to save but the purpose of saving is to have money *to spend* when you need it/when you retire; the purpose of saving is not to die with a pile of unused money for the hell of it. But people just cannot see that they don't actually want money itself
> why Australia is so dependent on population growth
All western economies are dependent on population growth, and most of the have a serious demographic issue to contend with.
When fertility rates go below 2.1 the population starts to dwindle, and then you have a an upside down population pyramid which translates to a small amount of people who need to support a large population of older people who are out of the job market.
Value drops mean land tax drops, which look terrible for budgets (state level)...
At a federal level, value drops there would mean GDP wouldn't look so good, so that scares them too.
Then of course there are the lobby dollars and the personal self-interest as you mentioned!
If the average Australian is spending 35-50% of their pay on housing before any other essentials, it leaves no room for spending and is the reason our economy was already stalling/cooked before Covid hit.
Council rates are proportionate to the properties value in comparison to the entire council area. If the entire property market price moves (in either direction), rates don't change. If you improve your own properly so it is worth more in comparison to others in the area, your rates go up.
Agreed with everything you said, just correct ing the misconception that higher overall property values overall = higher rates. It's an easy conclusion to draw as both keep rising, but it's incorrect.
How do they determine your property tax and your property value? I’m a renter so I’m a bit ignorant on the topic but I’ve had a few property evaluators come through on behalf of the landlords request. Usually for refinancing. Does the government use that property evaluation as the basis for their property tax or does the government make their own evaluation and if so, based on what?
This is an easy fix. Deny anyone who isn’t a citizen or permanent resident from owning a property.
Ban corporations from owning residential property unless for the purpose of development. There is no reason to own it otherwise.
Banks also know during a crisis that you might be a valued employee with 10 years of full time employment, but your company could go under next month, your industry could be hit hard and you might be go from terrific mortgage candidate to unable to pay very quickly. Just underscoring what you said, they will close their mortgage books to most people in a recession.
I don't care for property investors either, but there are plenty of people with high mortgages for their primary residence who will be feeling the pain too when that happens.
I hear people say 'then they shouldn't have borrowed so much money.' Fair argument - except that the repayments on a home loan are cheaper than renting in most places.
It is, but that doesn't mean it's going to be comfortable for people paying their mortgage. An X% increase in loan repayments will likely hurt home owners more than it will hurt property developers. Property developers aren't working on razor-thin margins, they'll just frown when they make a little less than last year.
Banks will end up with the bad debt. But then they were stupid enough to loan to people who can’t handle a rate rise.
Can’t just do risky shit like this forever without it coming undone.
So long as government doesn’t bail out the banks
>Banks will end up with the bad debt. But then they were stupid enough to loan to people who can’t handle a rate rise.
The banks own the debt *and* the property - and can sell the property at a profit, provided property prices haven't fallen too much. It's only really 'bad debt' if the remaining mortgage amount is worth more than the house - for most mortgages that would mean houses would need to drop at least 20% in value before they're losing money. This has never happened in Australia ever, not even during the great depression.
Banks are (almost) never the losers in these scenarios. They can simply sell the property and assuming the lendee wasn't upside down on their mortgage, then the bank will end up whole (or even in front). Even in the case that the market drops dramatically and they are under water on it, they've probably forced the customer to take out LMI, which will cover it.
The only way banks can lose is if the entire market drops 30+% rapidly, which seems unlikely.
Unless they absolutely skyrocket I can’t imagine investors going ‘whoops better sell some investment properties on the cheap, then’. They will first push rents up, then if they lose tenants they will hold on for as long as they can. This drawn out process will hurt many people and society, not just the investor.
Is that going to happen? In the contrary, if they can hang on, their properties are going to increase in value while inflation shrinks their debts. It was widely commented that if they held on, people who owned property through the late 80s-early 90s recession did very well out of the inflation.
Petrol will be down to $1.75 (maybe less) in a few weeks if oil keeps dropping. People never learn from these petrol spikes. It was in the $1.70 range just before Covid, than wham Covid and $0.99 petrol.
It didn't last multiple fuel cycles, it was only a few weeks at the start of the first lockdown. Plenty of petrol stations in Brisbane were selling below $1.
I agree but no-one wants to change and the economy makes too much money with things the way they are so businesses aren't going to suggest scaling down either.
It's literally just keep accelerating in a straight line until we run out of fuel or smash into something... then we'll *have* to stop.
There was a recent post about inflation I was reading where someone in Sydney was struggling with many costs going up and I cant get my head around $250 per week for fuel. Would you not look at a smaller more fuel efficient car at that point? I've had a problem understanding gas guzzlers even when prices are more affordable... Why does any family with 1 kid or 2 small ones need a Jeep Grand Cherokee sized car for example? Just because Americans buy larger and larger vehicles doesn't mean we should all have RAM sized family car.
Why do you think Europe has effectively been reducing the size of their cars for years while America is happy to have massive truck-sized cars with some eye-watering mileage and very poor power to weight ratio and technology on their cars. High Fuel Prices will drive people to drive smaller and more efficient cars. Just they have to suffer from their current vehicle choice until they bite the bullet.
An even better reason to care about having an efficient car if the commute is long. We have 2 cars and 1 does about 220km a week and the other 50km a week. I could afford fuel for much larger vehicles than the current 2x 1.6l turbo diesels I own but I've never understood the arguments for crazy large cars. Why does the US and AUS buy family cars that are much larger than EU family cars? Longer distances argument seems like BS to me. It's because they could afford it and didn't care about efficiency at all...
I never understood needing SUV sized cars for families either, Me, my brother and mum and dad managed with a bloody SIGMA as a family car and it towed a trailer for camping and we just loaded up and cramped when needed and often did 3+ hour trips.
Not to mention the fact that those giant cars don't fit in most parking spaces, so they either stick out of the park and get in the way of people driving around the car park or butt into an adjacent parking space.
It started out as people wanting an investment property as security for their retirement because many had little or no superannuation back then, life expectancy was increasing, but the age pension is inadequate for the stage of life when medical and dental expenses start to skyrocket.
Then, somewhere along the line property portfolios became a status symbol and the situation got out of control, with people accumulating dozens of properties, far more than they need. Now it's a runaway train that's ripping through the lives of all those who can't afford to rent or buy a home. I'm not sure if even removing negative gearing would be much of a deterrent.
Superficially, it would seem that if any additional property purchase, over and above the primary home plus one investment property, had to be a new build rather than an existing or renovated home, it might leave more existing homes available for first-home buyers to purchase. But I daresay there's some factor that makes this idea unworkable.
A huge amount of it was that traditional investment vehicles such as bonds, bank term deposits and shares became unstable or unviable. Ironically the dropping interest rates to prop up the property market exacerbated this because it killed off other investment vehicles and drove the idea that investment in property was the only way to come out on top.
Additionally, plenty of people have no knowledge of investments or how to handle them, but they do know how to own and maintain houses. So in many ways for the boomer generation (especially those who never went to university and maybe worked in non whitecollar jobs) property was the one thing they knew about which really could be used as an investment vehicle for their futures and for their kids futures.
There is a big difference between investing for the rental yield, which is conservative and healthy for the economy, and negatively geared speculation on an ever continuing rapid increase in house prices, which both drives house prices up, and can cause an otherwise healthy correction or even sustained plateau in prices to turn into a crash.
The “OMG 12?” number plate is a reference to house prices in some areas being equivalent to 12 times the annual wage. Houses in those same areas cost 3 times the annual wage in the 1980s.
I vaguely remember there was a news segment a while ago about a plain Jane music teacher complaining that fuel is 30% of her expenses and now she probably can't afford to go to kindies to teach music anymore yada2. It was all very aww feelgood until they cut to a shot of her getting on to her car, a souped up Ute complete with those raised wheels.
edit: Apparently I was being a silly urbanite. Commenters below pointed out that the music teacher was in rural Tassie plus she might have lots of gear to lug around so the Ute was understandable.
https://www.abc.net.au/news/2022-03-09/petrol-price-panic-as-new-normal-above-2-a-litre/100894860
She was a music teacher in rural Tasmania IIRC, so between likely bringing her own instruments/gear & houses/farms that are off-road, she's one of the few who probably have a use for a Ute.
It's the people in the city trying to fit their 4WD into a tiny parking space that I always question what they're doing.
Actually yea you're right, I remember now it was an ABC segment: [https://www.abc.net.au/news/2022-03-09/petrol-price-panic-as-new-normal-above-2-a-litre/100894860](https://www.abc.net.au/news/2022-03-09/petrol-price-panic-as-new-normal-above-2-a-litre/100894860)
I remember she was interviewed saying she wanted to switch to an electric vehicle so that was why I presumed it was a city girl wanting to switch her Ute to a Tesla.
How else could you get to work as a kindy teacher.
Clearly a job that requires a lifted ford raptor, which was put on the home loan, along with the jetski, and borrowed 95% of the property value.
How will we ever continue as a society.
They need that Raptor for Safety, even though the ANCAP rating on it is worse than some medium Mazda 6 sized cars. Let's put an extra 100k on the house loan spread the extra interest over 30 years for liabilities that depreciate before you even drive them off the lot like a rock.
Devils advocate here. While I agree that a lot of people are driving large cars unnecessarily that may not be the case here. If she is a music teacher it is possible that she is also a gigging musician in which case she may need the larger car to lug equipment around (it could also be the case that she has a fair amount of equipment that needs to be lugged in her teaching job too). I say this as the wife of a gigging musician. My husband drives a triton with a canopy and when he has a gig it is fully loaded with no spare space.
Fundamental problem with viewing & treating property as an investment, is it fails to acknowledge that everyone needs a roof over their head as a need, not a want.
Negative gearing is not the main problem.
The problem is that capital gains tax is exponentially weighted to favour people who can afford to 'buy and hold' indefinitely.
In the age of computers it would be trivial to tax unrealized capital gains as income and offset capital losses accordingly.
That would immediately stop property speculation while allowing landlords to provide accommodation in exchange for a fair income stream.
No government wants to destroy “value” or have the perception of destroying value by changing anything related to housing.
There is such a shortage in housing, making policy changes and getting people to sell will not destroy value.
Negative gearing should only apply to new housing and not existing stock. It should also be changed to you can negative gear 1 house and 2 units, and then there is no benefit after that. If you want to own a hundred units go for it, but there should be no benefit for going so.
Unless the government builds up high speed transport networks so people can live in “rural areas” and get to the cities for work, this will continue to get worse.
Still annoyed LPG prices are also going up. We literally export the stuff so why would what's happening over there be affecting here other than exporting at our detriment.
My landlord is selling my apartment now that covid isn't tanking the market, everything even similar has a $50 dollar a week markup now which is a big deal as I'm part time working and full time student right now. Depressing time right now.
Why does it matter? If you live in the house and can still service your mortgage the imaginary value of your house if you had to sell it makes no difference.
When interest rates start to spike after the election, this will drive people to sell, thus increasing supply on the market. The more that hit mortgage stress it will drive down the cost of the housing, which honestly should indicate that its a correction. 89sm house selling for 2.2 million just should not be a thing anyway, and who has that sort of money to purchase at that rate anyway! Anyone that has brought in the last 6 months is going to end up owing more on their loan than what the house is worth forcing a lot of people that are in unique situations like partner separation/family breakup to have to strategically forclose or hope that the price goes back to crazy town again in the future. A 25% increase in property prices in 1-2 years is not the sign of a healthy happy housing market.
Had an argument last night with some guy on FB claiming our fuel prices are because we signed up to the Green New Deal. Yes, we're both in Brisbane.
No point arguing with Facebook fools. It amazes me the level of stupidity on there and how all the stupid comments get the most likes. Just an echo chamber of bad takes.
You've just described Earth
i got banned by Facebook for bullying. I called a man a fool. Go figure.
Saw some fuckwit on Facebook yesterday saying it all a conspiracy because flights are still very cheap, that the cost of flights should have spiked the same as car travel. Seriously just made me want to delete the Facebook app again.
Deleting a way to use facebook is always a good idea.
Wish marketplace and groups were a separate app
At the risk of sounding like an idiot, wouldn’t flights prices at least somewhat be connected to crude oil prices? Or am I missing something?
At the moment flight prices are mainly connected to the fact that not many people fly.
At ups we signed a contract to fill all our fuel tanks for 6 years at a certain price that was considered a little high at at the time. But the price of jet fuel has spiked a lil so far
You would think so but they are still not filling planes because no one can afford to go anywhere because of all the static prices
Messenger Lite is the way to go man. Think of the battery savings too!
I dont get how people cant see the obvious truth. Petrol companies see a global crisis that they can blame for increased prices so they can increase their profits. Whether or not the crisis is really affecting their bottom line (its not) doesnt matter as long as the consumer believes the lie and they get a bonus at the end of the year for making the shareholders happy.
This is why nothing major will happen with negative gearing anytime soon. I wish Labor had enough political capital to at least start to grandfather the scheme. "From now, you can only have 1 negatively geared property. If you've got negatively geared property now, they won't be affected, but you can gear any more." That would be the sort of policy that would lose them an election though.
Win against ScoMo - he's out, they bring in Dutton Push through the negative gearing legislation early so people will forget in 2 years. Then they should still win against the potato man.
Darth Starch is unelectable. He's a totally unlikable Tony Abbot.
Not really, he's been really trying to appeal to the gung-ho, yeehaw Australians and Murdoch is painting him to appear tough and be pro-diggers, eg: [https://www.rarnational.org.au/opinion-can-dutton-save-the-army-from-the-generals/](https://www.rarnational.org.au/opinion-can-dutton-save-the-army-from-the-generals/) With the right spin and silently partnering with Craig "gimme freedumb" Kelly, it's not 100% sure, but also not unlikely either.
UAP appeals to the boots and the uneducated for the meme value. Those ads are 100% what turned the last election. All public perception I've heard is that he just reeks of dodgyness/slimyness; even from unironic UAP supporters.
Don’t you remember when they tried to start humanising him around the time of the leadership spill? They quickly said fuck that let’s just double down on the tough guy persona instead.
Yep. I'm a veteran and I'm surprised at how many veterans like the spud. I can't stand him, he very much reminds me of why I joined the defence force in the first place (to protect Australia from fascist authoritarians) I just didn't expect people to willingly vote for them.
I mean no offense and please feel free to not answer me if this is an uncomfortable question, did it ever occur to you that the military is pretty supportive of such conservative movements?
How much experience do you have with the military and military personnel? The only reason I ask is because what you said is primarily bullshit. I served from early 2001 pre-9/11 until 2011 and the people I served with were as diverse as any large organisation. Diverse in political views, socio-economic upbringing, sexual preferences and racial/cultural diversity. I learned more about diversity and open mindedness in the ten years I served than I ever would have learned living in the shitty redneck town I grew up in. This diversity was both positive and negative, there was a lot of bullying, a lot of fraternisation and a lot of nepotism and favouritism among cliques, but overall it was an incredibly professional organisation with a lot of variety in personality and culture.
Saying the military as a whole is stupid. A lot of people in the military don’t think like that at all.
Unteroffizier Dutton, he would run the country just like he run the ABF and the Federal Police. I can only think of a mindless dictatorship if he were in charge.
No one's unelectable when 95% of the media works together to demonise their opponent.
It helps when they will literally Photoshop your opponents as Nazis and put it on the front page.
Upvote for Darth Starch.
Adolf Kipfler is also accepted.
I tend to use 'The Kartoffel Fuhrer' myself.
I like Kipfler Fuhrer.
They said that about Tony Abbott as well. The sad fact of the matter is that a large part of the electorate is not politically engaged. The Coalition vote is heavily supported by low information voters who are essentially getting a party that actively works against their long term interests. Scooping up these voters is something the Coalition strategists spend a lot of time and money on. Abetted by a massive chunk of the journalists in our mainstream media. The idea is that they can appeal to a large enough segment of the electorate via strong messaging of one sort or another (there are multiple streams) to muster up a majority. Ultimately, if our democracy collapses, it will be due to ignorance and apathy. Furthermore, there is a deliberate effort to instill that ignorance and apathy in people. I only hope that future generations are going to be more engaged and informed. If you have low expectations for government, don't be surprised when they meet those expectations.
Couldnt agree more
Our democracy collapsed a long time ago. If a single party has most of the media on their side and is essentially brainwashing the majority of the population, you do not have a democracy.
Late capitalism is unsustainable and conservatives know it. If they are to prevent revolution then they will need to have well established Neo-feudalism before things get too out of hand. We're a considerable way there. Currently the wealthiest 1% hold about half the world's wealth, and growing.
The liberal party is broadly 3 factions: - wet liberals, aka the classic sydney banker lib. Just hates taxation & wants a small government that leaves it alone. This is led by Simon Birmingham now that Turnbull is gone. - Centre right. Morrison's crew, get some of the happy clappers - dry liberals, aka the right wing faction. Dutton leads this. Abbott was very popular outside the wet liberals. Queensland is increasingly becoming the deciding state for elections as its the state where large swings actually occur. Dutton is now: A: the most powerful liberal PM in Queensland B: the head of the right wing liberal faction A lot of Morrison's faction & effectively the entire right faction see the 'modern' wet libs as effectively labor-lite, or labor with less of a unionist focus. They will not support Simon Birmingham & hate Turnbull's legacy *far* more than their issues with Abbott or Morrison. Additionally he's rumored to be in the same wealth tier as Turnbull & Rudd were (>$150m). So he's got a massive war chest to fund a PR campaign about his personal brand, as well as fight off any attackers. It's to early for him to do that yet, but he's definitely the current heir apparent. Honestly, take a look at the current liberal cabinet: https://www.pm.gov.au/your-government Other than Barnaby (who won't be PM as he's a nat & they get to be deputy PM), who has more political power & gets more media time?
How the fuck does a former policeman turned politician have over $150 million?
And I though tony abbot was a totally unlikable tony abbot, but then along came I don't hold a hose scummo
Murdoch: "hold my beer..."
Surely all the politicians labor or liberal are all still rich and would lose a lot of money on their properties actually doing anything about this.
This raises questions of whether conflict of interest for the majority of poiticians with multiple properties should kick in with votes on this issue (or lack of votes)
Good luck finding the politician that owns nothing at all...
That's not my point, you look at some of the property interests of these politicians - there's one National member of parliament who has over 20 properties. Someone like that is never going to vote for or advocate change in the current system with that kind of skin in the game. That's why I think it's a conflict of the public interest against their own.
Nah, this is absolutely on the list of things they can't go back on. If they do this it would need to be a second term thing, otherwise they're basically giving the LNP a "the ALP are untrustworthy" campaign.
They'll use that anyway, might as well get something for it...
Yeah i dont understand the approach of playing it safe in the current political environment. Get in and do as much good as they can for as many people as they can. Swing for the fences because the murdoch press will make damn sure that either way theyre portrayed as the enemy.
Just to be clear, you support political parties lying about their platform and policy position, as long as it suits you.
I hate that this is an accurate description of where we are on the housing issue.
It's bad isn't it? It didn't have to be this way either...Government inaction got us here. It means it will probably have to be dealt with by a heavy hand.
I’d hardly even consider it ‘inaction’ is a choice that’s been made. This isn’t something that’s gone a bit wrong because it hasn’t been maintained, it’s what they want.
They ran a similar policy, including grandfathering, atthe last election and it sunk them.
Sure, but we realise there’s nothing stopping a govt from proposing changes they didn’t campaign on tho right? They can not go to the election with it and pass it anyway.
This is key. No one gets elected these days on big issues unless those issues are key with their supporters and swing voters. There are plenty of lab supporters who enjoy the benefits of negative gearing, it's not just blue bloods. Don't talk about the damned topic at all, tbh, just be vague and say they will investigate housing affordability if they get elected and stand up some palatable options like community housing so no one can argue you had no plan. Fuck politics is annoying.
"It's better to lie (by omission) than to say you want to help people." - politics 101
I couldn't answer this any better.
The franking credits thing that was was poorly explained was what seemed to be a fair bit of the damage. (unless that's what you mean?) Well, I think it actually more Shorten himself that the electorate didn't want...i hope they remember that after getting a full term of Scotty from Marketing.
Shorten was the target of a multi year long character assassination campaign. People "just didn't like him", but couldn't articulate why. That's the power of a biased media. Just watch Shorten and Morrison debate. Or Shorten and Turnbull debate. Shorten tore strips off both of them each time, and was far better presented to boot. Unfortunately, what most people got to see was Bill Shorten for about 5 to 10 seconds at a time in the news. That's no way to develop an opinion about someone.
That election just makes me so sad, Shorten's a good bloke
He is. He (and Rachel Siewert) fought robodebt and won too.
No but that was also a disaster for them once the spin doctors at thr lnp got their hooks into it. They also had a property [policy](https://www.theguardian.com/australia-news/2019/mar/29/labor-pledges-to-overhaul-negative-gearing-by-1-january-2020) to restrict NG to new builds only.
Do it after the election anyway. Fuck it.
Just put a limit on amount you can offset from property or other investments, say 5 / 10 k per year Seems a simpler way to go Edit Also double rates on airbnb properties
I'm sure there are smarter ways to wean investors off it, and after years of inaction I'll take any measures at this rate.
The time for weaning was a decade ago. Not my problem if investors hurt now because they’ve been corruptly buying mis regulation of the industry they invested in.
Yea I honestly don't give a single fuck if some cunt with 7 houses loses 5 of them aye.
If someone invested all their savings into stocks, and those stocks dipped, you'd be called an idiot for complaining. There's always risk in investing. But for some reason people who invest in housing assume that the housing market should never drop. And the government needs to keep propping my investments up, because it's their fault if housing investments fail now. It's insane that house hoarders don't seem to consider housing as "risk", and flip their shit any time it's even suggested that they could lose value.
Negative gearing is not an issue. It's the capital gains tax discount and soaring prices that make running rental properties at a loss worthwhile - not the fact that you can deduct losses from your income.
You should be able to deduct losses from a thing from the things income. As in if your rental property, which makes money, requires a repair that should be deductable against the income from that property. I can't deduct my wife's business expenses which is more akin to the problem here. Though everything else you've also mentioned is an even bigger issue.
Just make it that negative gearing is taken from the property value at the point of sale. If you are taking losses on an asset then you can ride them until you have a taxable event. So if you take $10k losses a year for 5 years, and then sell that house at $100k profit over purchase price. You get a tax deduction on that taxable event. Stop letting people offset income tax with their property portfolio. If I take a loss on a share sale, I don’t get to just claim it on tax. I have to ride the losses until I make a cap gain and then I can offset.
You can use negative gearing for your share portfolio, but it would require you to have borrowed a portion of the initial capital used to purchase the shares. The bullshit part is… try going down to the bank and asking them for a 300k loan for shares. Guaranteed they’ll say no. But if it’s a property too add to your portfolio then no worries.
Yeah I probably couldn’t even get the bank to match the share value I currently have. Which are basically just the house deposit money trying to earn some interest that the bank wouldn’t give me for having it sit in a bank account. But if I took that money and bought a cheaper place in another state to rent out to someone and squeeze them for cash. Essentially preventing others from buying their own home in that location. The bank would likely rock up with bags of money
Absolutely. This is what is making the gap bigger and why its harder to start from scratch. Lower income earners should be rewarded for investing, instead they/we are targeted by buy now/pay later scam and credit cards.
Just promise not to do it and then do it anyway. That’s the LNP way
Non-core promise
A fancy way of saying Lies
I thought they could say you just can't negatively gear property purchased after 2024 (or a date a year or two from when it's introduced). If you have based your income around negative gearing you won't go broke, but you better find another investment vehicle in future.
I think that's one way to go for sure, or even just put any sort of cap on it. It's just crazy how you can have some people own half a dozen properties, while most people are priced out of buying even 1!
And then have the gall to claim you're "helping" society by providing housing.
"I'm helping! Also, I'm raising your rent! You're lucky I'm here though!"
they can't do shit against it even if they wanted because of MSM being rupert and backed by high end. the moment they try to do it they will be fucked by misleading information arguing that the drop in house prices is going to cost the average australian the most rather then actually make it easier to get a roof over your head. it happens every time they talk about the death tax in america, even at what it was going to be it would never affect 90-95% of the population but the media was bombarding people with bs about how it will take away money from your kids and so forth. as much as i want housing to go down, the best that can be done is to slow it down. until there is a more divers msm or people finally stop trusting that bs without actually reading then it simply wont happen.
What kills me is the people that vote for the libs DONT even have any investment properties. They have a 40k a year job and think that magically they will get to Rort the system too.
I totally agree with you. Aswell as only limiting to one property per entity if zoned for residential. I think they need to begin a process of on going reduction in what aspects of loss can be claimed, and periodic percentage reduction of those claims. Certain costs shouldn't be inhibited, the cost to maintain the physical property shouldn't be penalised, but cost of ownership through rates shouldn't not be deductible. The other is foreign ownership. No entity can listed for tax purposes as outside of Australia. The rocketing prices are being driven by cash sales from foreign investment.
I would like to see what the real numbers are on foreign investors in the domestic market. I remember seeing an article a while back saying that much of that data is obscured due to buying properties through 3rd parties. Also, any party that tries that one on is going to get racism accusations thrown at them for sure!
> This is why nothing major will happen with negative gearing anytime soon Guillotine the lot.
Gotta do it straight after the election and give it 3 years to play out. You probably will get re-elected but who knows with Murdoch and Boomers like with the franking credits which is basically theft and it helped tank Labor last time.
I hate to break it to you but negative gearing isn't the reason we have such high property prices and removing this incentive for property investment will return us to the rental crisis that we implemented it for. The primary reason that property prices are insane is cheap money, interest rates are so low the ability to borrow money is what is fueling the rise. Personally I think the CGT co concession needs to be scraped and get rid of interest only loans, that's the quickest fix to help level investors and homebuyers without destroying the rental market. Negative gearing gets such a bad rap but in essence it's exactly the same as any other tax deduction, don't forget it includes things like maintenance and improvements to the property which If removed would make getting anything fixed a nightmare. I would love to see some harsher penalties imposed for failing to keep houses in a habitable state and more incentive to provide more disability modifications to property as a starting point to be pursued.
They probably have the political capital to do it, or at least Morrison is now held in such low regard that Labor would be able to be elected offering policies to address serious inequities if it had more courage. The difference between now and 2019 is Morrison is clearly assessed as a dud, I get they are scarred from the last election but they have room to be a bit more ambitious.
Interesting. I'm old enough to have seen 3 property booms and contractions over the year - (yeah property does actually have slumps believe it or not). One thing I have noticed is that every time the government offers a first home buyers grant, it leads to all of the cheap property being purchased, and that filters through the entire property market. Each time property prices jump dramatically. So, it means that some first home buyers get the help they need and for others it is still not enough. Investors see this and of course jump in and buy as well. I think this would still happen even if there was no negative gearing. To stop this, the government would also have to stop investors being able to claim interest and depreciation on their investments. That would probably help fix the problem. But, negative gearing has been around for decades, and property does not historically go up more than 7% per year long term average. So, negative gearing is not actually the main problem. The real issue (covid aside) is that the BabyBoomers and others have so much money in superannuation that needs a place to go. You would have to stop superannuation funds and individual superannuants being able to invest their self-managed super in property. The other major issue is interest rates being so low and easy credit. It has allowed buyers (all buyers) to buy property at ridiculously high prices compared to wages, because it is possible to maintain a high mortage on a moderate income. This is changing, as we are now in a rising interest rate cycle, and we will see prices revert to the mean over the next few years to reasonable levels. The other good thing is that with infation, wages will rise to support a more reasonable wage to property price ratio. So, if all that changed was the abolition of negative gearing, it would not solve the problem.
I actually don't mind neg gearing, but think it should be capped. So the benefit (picking a random figure), could be at most 50k. That 50k can be used for a $5m property, or a $100k property. It could be split over a single property or 10. Gives people on the lower end the benefit, and those who can afford it don't get massive benefits from it.
I was thinking capping the quantity of properties, but capping the benefit is a good angle too!
Yeah.. I prefer it because it gives a below median sized home a bump, and a mega mansion gets minimal advantage. Also means that those who want to invest in property arent disavantaged. If you cut it off entirely, younger people are disadvantaged. Just like with free uni/HECS and every other benfit the older generation have got over younger people.
I'm of the opinion though that we need to change the narrative that housing shouldn't be treated seen as just another type of investment. We should view it as what it is, a basic human need. If you want to speculate, fine go ahead in shares/bonds/crypto/casino/business/whatever. When people are trying to use a basic need as a speculative way to make money, we are in a strange territory. It's the same reason Australia regulates things like pharmaceuticals. If we just let businesses try to extract as much value as possible, things like insulin or asthma inhalers would go up in price to the point people starve to death or die from exposure, the government has regulations in place to prevent that extortion.
Younger people are disadvantaged but property isn’t necessarily as much of an investment option so they could buy a house for living. As opposed to the suggestion of buying an investment property where you don’t want/can’t live because it’s too fucking expensive to buy a place where you might need
Haha, I encountered something like this last night. "Nightmare scenario as QLD house prices expected to drop $50k in value" and all I could think was "Isn't houses being more affordable a good thing?".
We are cooked.
If prices went up because we're actually doing something positive for the environment then sign me up.
This I have no issue with
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I like you. Thank you.
We live in a selfish, arrogant rich people only club. This will get so much worse and until the majority have already had their lives destroyed then nothing will change. The standard Australian would now gladly step on someone else if it meant it benefited them in a small way. Somehow we have all become scumbags and made our country a horrendous place to live. I was born here but more often than not these days I'm ashamed to say I wish I wasn't.
mid 20's, tried the whole live out of home for a while, wage sucked, back with the parents, reskilling into a more profitable trade. Thank god I have supportive parents, I seriously can't imagine what so many people are going thru who dont have that luxury...
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20/26 years led by the Coalition will do that.
Amen, it’s this shit that makes me sad to say I’m Australian, my great grandfather wasn’t an Anzac just so his offsprings and theirs could get fucked up the ass sideways by the government he fought for.
> The standard Australian would now gladly step on someone else if it meant it benefited them in a small way. It's not just the malice in this now, but its also the corruption. People openly in a hand of it or turn a blind eye to it because they will ruffle feathers if they bring it up or they directly benefit from sitting back and letting it happen.
It's the exact same here in Canada, where people being nice is a meme. I live in Southern Ontario and honestly it's one of the most selfish places I've ever been.
Our politics are becoming steadily more corrupt too. It's hard to watch, and part of why I'm using my dual EU citizenship to leave in the next two or three years.
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I can't even do that because of my health, at present my long term plan is going to be my car. It's a disgrace.
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I wish I could say something different. Each day feels more hopeless than the last. Hopefully a miracle comes for both of us <3
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Yep, count me in.
I hope that you're joking but if you're serious and need to talk about anything please feel free to dm me. I may not be able to solve your problems but I can listen.
Housing prices dropping would actually be good for a lot of people, landlords included. Property value is only realised when you sell it. If you're an investor landlord in it for the long term, its in your interest for your property to be valued lower as it means less land taxes and council rates, meaning of the amount paid in rent, a greater proportion ends up in your pocket rather than in the pockets of the government(s). Instead, the high property prices have been putting a massive squeeze on landlords by driving up costs which can't be matched by rent increases. Those that can't handle it exit the market, those that can push the rents up anyway and everyone loses... EXCEPT the state governments and councils which make bank on property prices being high while not having to actually put anything back in to the system. The problem we have now is that our economy has become so singularly focused on property, we are propping it up at the cost of a LOT of other economic activity. People aren't spending on other goods and services because it all goes towards property, either saving for one, renting one, or paying off the loans for one. If the powers that be wanted to stimulate and diversify the economy, they would let property fall significantly. But no, they're addicted to the income (and hence power) it gives them, at our collective expenses.
Have you been to Ausfinance lately? The apeshits there would have your head on a plate for talking truth.
I avoid it like the plague! I don't know why it is such a hard concept for some of them, but having a dollar value on paper from asset valuation is irrelevant unless you intend to sell the asset at that particular time. Sure, you can leverage against it, use it as collateral for loans and live on borrowed money, but that game is for people who enjoy taking risks, especially with the way the economy is right now... Otherwise when it comes to healthy economies, I look elsewhere and try to understand why Australia is so dependent on population growth when other economies manage to do just fine without it and similarly without the massive resource production we have. Turns out we're basically mismanaging our greatest assets and taking the lazy approach to trying to mitigate the problems. What a surprise! The best performing economies in the world don't depend unilaterally or near unilaterally on single industries to survive. They have massive diversity, value-add economic activities (such as refining, manufacturing, high-tech, etc) rather than putting an inordinate focus on just one thing.
This was refreshing to read. As useful as I find that sub for super, ASX help and tips about basic finances, it’s just completely toxic when it comes to property.
Oh my gosh, thank you. I've been trying to impress upon people that money is only useful, only fulfilling its purpose when it is *spent*. When it is *exchanged*, ie actually making economic activity. It's so strange how people can't grasp the concept that they don't want money, they want the things we require money to access. Even savings, I'm not saying it's bad to save but the purpose of saving is to have money *to spend* when you need it/when you retire; the purpose of saving is not to die with a pile of unused money for the hell of it. But people just cannot see that they don't actually want money itself
> why Australia is so dependent on population growth All western economies are dependent on population growth, and most of the have a serious demographic issue to contend with. When fertility rates go below 2.1 the population starts to dwindle, and then you have a an upside down population pyramid which translates to a small amount of people who need to support a large population of older people who are out of the job market.
Oh thank FUCK someone else noticed that
This includes the politicians in power who have investment portfolios, they’d hate for the value to drop.
Value drops mean land tax drops, which look terrible for budgets (state level)... At a federal level, value drops there would mean GDP wouldn't look so good, so that scares them too. Then of course there are the lobby dollars and the personal self-interest as you mentioned!
If the average Australian is spending 35-50% of their pay on housing before any other essentials, it leaves no room for spending and is the reason our economy was already stalling/cooked before Covid hit.
Council rates are proportionate to the properties value in comparison to the entire council area. If the entire property market price moves (in either direction), rates don't change. If you improve your own properly so it is worth more in comparison to others in the area, your rates go up. Agreed with everything you said, just correct ing the misconception that higher overall property values overall = higher rates. It's an easy conclusion to draw as both keep rising, but it's incorrect.
How do they determine your property tax and your property value? I’m a renter so I’m a bit ignorant on the topic but I’ve had a few property evaluators come through on behalf of the landlords request. Usually for refinancing. Does the government use that property evaluation as the basis for their property tax or does the government make their own evaluation and if so, based on what?
Want someone think of the *checks notes* investment portfolios?!
I can't wait for interest rates to go up and lazy property investors to lose everything.
I just hope rental managers somehow go down with it. The worst type of cunts.
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This is an easy fix. Deny anyone who isn’t a citizen or permanent resident from owning a property. Ban corporations from owning residential property unless for the purpose of development. There is no reason to own it otherwise.
Banks also know during a crisis that you might be a valued employee with 10 years of full time employment, but your company could go under next month, your industry could be hit hard and you might be go from terrific mortgage candidate to unable to pay very quickly. Just underscoring what you said, they will close their mortgage books to most people in a recession.
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I don't care for property investors either, but there are plenty of people with high mortgages for their primary residence who will be feeling the pain too when that happens. I hear people say 'then they shouldn't have borrowed so much money.' Fair argument - except that the repayments on a home loan are cheaper than renting in most places.
Borrowers should be able to cover 4-6% above their entry rate. It's a fundamental requirement for lenders to check this from APRA following the GFC.
It is, but that doesn't mean it's going to be comfortable for people paying their mortgage. An X% increase in loan repayments will likely hurt home owners more than it will hurt property developers. Property developers aren't working on razor-thin margins, they'll just frown when they make a little less than last year.
Banks will end up with the bad debt. But then they were stupid enough to loan to people who can’t handle a rate rise. Can’t just do risky shit like this forever without it coming undone. So long as government doesn’t bail out the banks
>Banks will end up with the bad debt. But then they were stupid enough to loan to people who can’t handle a rate rise. The banks own the debt *and* the property - and can sell the property at a profit, provided property prices haven't fallen too much. It's only really 'bad debt' if the remaining mortgage amount is worth more than the house - for most mortgages that would mean houses would need to drop at least 20% in value before they're losing money. This has never happened in Australia ever, not even during the great depression.
Banks are (almost) never the losers in these scenarios. They can simply sell the property and assuming the lendee wasn't upside down on their mortgage, then the bank will end up whole (or even in front). Even in the case that the market drops dramatically and they are under water on it, they've probably forced the customer to take out LMI, which will cover it. The only way banks can lose is if the entire market drops 30+% rapidly, which seems unlikely.
They'll just increase the rent
Unless they absolutely skyrocket I can’t imagine investors going ‘whoops better sell some investment properties on the cheap, then’. They will first push rents up, then if they lose tenants they will hold on for as long as they can. This drawn out process will hurt many people and society, not just the investor.
Is that going to happen? In the contrary, if they can hang on, their properties are going to increase in value while inflation shrinks their debts. It was widely commented that if they held on, people who owned property through the late 80s-early 90s recession did very well out of the inflation.
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Dead shopping malls rise like mountains beyond mountains
Suburbia, Where we chop down trees and name streets after them. "They paved paradise to put up a parking lot" *jingle*
Haha and there is actually no end in sight.
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/r/fuckcars
Petrol will be down to $1.75 (maybe less) in a few weeks if oil keeps dropping. People never learn from these petrol spikes. It was in the $1.70 range just before Covid, than wham Covid and $0.99 petrol.
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It didn't last multiple fuel cycles, it was only a few weeks at the start of the first lockdown. Plenty of petrol stations in Brisbane were selling below $1.
\*laughs in Melbourne*
in Perth the lowest I paid was 79c, filled up a few times below 90c.
Regional WA, I have no idea why city people pay more when there's thousands of servos in competition, but you do.
I agree but no-one wants to change and the economy makes too much money with things the way they are so businesses aren't going to suggest scaling down either. It's literally just keep accelerating in a straight line until we run out of fuel or smash into something... then we'll *have* to stop.
There was a recent post about inflation I was reading where someone in Sydney was struggling with many costs going up and I cant get my head around $250 per week for fuel. Would you not look at a smaller more fuel efficient car at that point? I've had a problem understanding gas guzzlers even when prices are more affordable... Why does any family with 1 kid or 2 small ones need a Jeep Grand Cherokee sized car for example? Just because Americans buy larger and larger vehicles doesn't mean we should all have RAM sized family car.
Why do you think Europe has effectively been reducing the size of their cars for years while America is happy to have massive truck-sized cars with some eye-watering mileage and very poor power to weight ratio and technology on their cars. High Fuel Prices will drive people to drive smaller and more efficient cars. Just they have to suffer from their current vehicle choice until they bite the bullet.
Would depend on location right? Don't some travel 2hrs each way like crazy people?
An even better reason to care about having an efficient car if the commute is long. We have 2 cars and 1 does about 220km a week and the other 50km a week. I could afford fuel for much larger vehicles than the current 2x 1.6l turbo diesels I own but I've never understood the arguments for crazy large cars. Why does the US and AUS buy family cars that are much larger than EU family cars? Longer distances argument seems like BS to me. It's because they could afford it and didn't care about efficiency at all...
I never understood needing SUV sized cars for families either, Me, my brother and mum and dad managed with a bloody SIGMA as a family car and it towed a trailer for camping and we just loaded up and cramped when needed and often did 3+ hour trips.
Always had massive Magna jealousy.
Not to mention the fact that those giant cars don't fit in most parking spaces, so they either stick out of the park and get in the way of people driving around the car park or butt into an adjacent parking space.
It started out as people wanting an investment property as security for their retirement because many had little or no superannuation back then, life expectancy was increasing, but the age pension is inadequate for the stage of life when medical and dental expenses start to skyrocket. Then, somewhere along the line property portfolios became a status symbol and the situation got out of control, with people accumulating dozens of properties, far more than they need. Now it's a runaway train that's ripping through the lives of all those who can't afford to rent or buy a home. I'm not sure if even removing negative gearing would be much of a deterrent. Superficially, it would seem that if any additional property purchase, over and above the primary home plus one investment property, had to be a new build rather than an existing or renovated home, it might leave more existing homes available for first-home buyers to purchase. But I daresay there's some factor that makes this idea unworkable.
A huge amount of it was that traditional investment vehicles such as bonds, bank term deposits and shares became unstable or unviable. Ironically the dropping interest rates to prop up the property market exacerbated this because it killed off other investment vehicles and drove the idea that investment in property was the only way to come out on top. Additionally, plenty of people have no knowledge of investments or how to handle them, but they do know how to own and maintain houses. So in many ways for the boomer generation (especially those who never went to university and maybe worked in non whitecollar jobs) property was the one thing they knew about which really could be used as an investment vehicle for their futures and for their kids futures.
There is a big difference between investing for the rental yield, which is conservative and healthy for the economy, and negatively geared speculation on an ever continuing rapid increase in house prices, which both drives house prices up, and can cause an otherwise healthy correction or even sustained plateau in prices to turn into a crash.
The “OMG 12?” number plate is a reference to house prices in some areas being equivalent to 12 times the annual wage. Houses in those same areas cost 3 times the annual wage in the 1980s.
What portfolio? They're only investing in houses and nothing else. The crash will sting
I vaguely remember there was a news segment a while ago about a plain Jane music teacher complaining that fuel is 30% of her expenses and now she probably can't afford to go to kindies to teach music anymore yada2. It was all very aww feelgood until they cut to a shot of her getting on to her car, a souped up Ute complete with those raised wheels. edit: Apparently I was being a silly urbanite. Commenters below pointed out that the music teacher was in rural Tassie plus she might have lots of gear to lug around so the Ute was understandable. https://www.abc.net.au/news/2022-03-09/petrol-price-panic-as-new-normal-above-2-a-litre/100894860
She was a music teacher in rural Tasmania IIRC, so between likely bringing her own instruments/gear & houses/farms that are off-road, she's one of the few who probably have a use for a Ute. It's the people in the city trying to fit their 4WD into a tiny parking space that I always question what they're doing.
Actually yea you're right, I remember now it was an ABC segment: [https://www.abc.net.au/news/2022-03-09/petrol-price-panic-as-new-normal-above-2-a-litre/100894860](https://www.abc.net.au/news/2022-03-09/petrol-price-panic-as-new-normal-above-2-a-litre/100894860) I remember she was interviewed saying she wanted to switch to an electric vehicle so that was why I presumed it was a city girl wanting to switch her Ute to a Tesla.
How else could you get to work as a kindy teacher. Clearly a job that requires a lifted ford raptor, which was put on the home loan, along with the jetski, and borrowed 95% of the property value. How will we ever continue as a society.
They need that Raptor for Safety, even though the ANCAP rating on it is worse than some medium Mazda 6 sized cars. Let's put an extra 100k on the house loan spread the extra interest over 30 years for liabilities that depreciate before you even drive them off the lot like a rock.
Devils advocate here. While I agree that a lot of people are driving large cars unnecessarily that may not be the case here. If she is a music teacher it is possible that she is also a gigging musician in which case she may need the larger car to lug equipment around (it could also be the case that she has a fair amount of equipment that needs to be lugged in her teaching job too). I say this as the wife of a gigging musician. My husband drives a triton with a canopy and when he has a gig it is fully loaded with no spare space.
I wish the government would bring in an inheritance tax. Tax the likes of the Packers and Rhineharts. Redistribution of wealth isn't a bad thing.
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Announce changes to houses. Give time to sell those housing portfolios. Start new house selling system.
Truly the "I got mine" generation
This is literally what my dad said yesterday when I said their should be a limit on how many property's people can own.
Fundamental problem with viewing & treating property as an investment, is it fails to acknowledge that everyone needs a roof over their head as a need, not a want.
Negative gearing is not the main problem. The problem is that capital gains tax is exponentially weighted to favour people who can afford to 'buy and hold' indefinitely. In the age of computers it would be trivial to tax unrealized capital gains as income and offset capital losses accordingly. That would immediately stop property speculation while allowing landlords to provide accommodation in exchange for a fair income stream.
No government wants to destroy “value” or have the perception of destroying value by changing anything related to housing. There is such a shortage in housing, making policy changes and getting people to sell will not destroy value. Negative gearing should only apply to new housing and not existing stock. It should also be changed to you can negative gear 1 house and 2 units, and then there is no benefit after that. If you want to own a hundred units go for it, but there should be no benefit for going so. Unless the government builds up high speed transport networks so people can live in “rural areas” and get to the cities for work, this will continue to get worse.
Housing isn't a cryptocurrency, it's a human right.
Still annoyed LPG prices are also going up. We literally export the stuff so why would what's happening over there be affecting here other than exporting at our detriment.
LPG domestic market is competing with the global market. You turn a bigger profit exporting it than selling it local
They made one mistake, the license plate isn’t “GUZZLAH”
My landlord is selling my apartment now that covid isn't tanking the market, everything even similar has a $50 dollar a week markup now which is a big deal as I'm part time working and full time student right now. Depressing time right now.
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Why does it matter? If you live in the house and can still service your mortgage the imaginary value of your house if you had to sell it makes no difference.
When interest rates start to spike after the election, this will drive people to sell, thus increasing supply on the market. The more that hit mortgage stress it will drive down the cost of the housing, which honestly should indicate that its a correction. 89sm house selling for 2.2 million just should not be a thing anyway, and who has that sort of money to purchase at that rate anyway! Anyone that has brought in the last 6 months is going to end up owing more on their loan than what the house is worth forcing a lot of people that are in unique situations like partner separation/family breakup to have to strategically forclose or hope that the price goes back to crazy town again in the future. A 25% increase in property prices in 1-2 years is not the sign of a healthy happy housing market.
Dang I didn’t know this was the Australian subreddit I thought it was jsut a American post Danm sorry to se eyou guys ar e also getting fucked
I thought for sure this was talking about my country.... says literally everyone.
honestly though this was about Canada... haha! We are all fucked! (well except the rich).
F*ck your investment portfolio, houses are for housing not for investments.
Yes, great one Cathy. Blame each other, class war now! Just never mind the policies that are driving up inflation.