Australian Politics, Mark II

But from the bank’s end, the more houses they repossess, the more houses they have to fire-sale, the more the market will drop, the worse their ratios get. It becomes self fulfilling.
It would be a very dumb tactic for them.

Assuming zero wage growth and zero housing changes over ten years, then yes.

That’s two pretty big assumptions.

That really doesn’t follow.
Unless you’re talking about a price drop specifically for one room apartments.
And what couple is buying a one room apartment?
That’s a terrible decision.

But again, if you’re expecting to flip in less than five years you shouldn’t be buying at all.
Or accept that you might take a loss.

I’m not assuming anything.

Well yeah that’s what happens in crashes. It gets real ugly. See Ireland and the GFC.

It’s not just about being smart, banks can’t just wear paper losses to the point they are broke themselves.

Note just becuase a bank reposes the borrower isn’t off the hook, like in America. If you have a loan for 300k and the bank sells for $250k it’s the borrower who still owes the bank $50k. But the bank has reduced their loan exposure from 300 to 50.

Lol.
You’re assuming a Lot.
Apparently starting with the idea that property prices don’t ever go down in the short term.

Mate i haven’t said that at all. I’m saying it’s a bad idea to deliberately pull a handbrake on a market that is going backwards when a lot of people have their life savings tied up in it, and in a lot of cases their retirement money. I’m not even big on the idea of negative gearing. I’m talking about the implications of the changes.

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Don’t be so farking touchy. Having an agenda is not a bad thing; I always have agendas in trying to get my own way. I lose more than I win, but such is life. In terms of your view, it seems to me that the more you wish for the end of the world, the quicker it will come. History is on my side, and if you look at all the economic circumstance over the past 60 years, you will see the house prices have risen unless there is a “credit squeeze”, and the way our Reserve Bank works, that is not going to happen for many years.

And of course, Lance, I am not telling my kids that I will be there safety net, as I would not want them to be irresponsible in investing in property, but I reckon if you can do it, then helping friends and family out in times of crap and crisis, is the way to go.,

Every investment is a risk.

Interest rates could shoot up.

Property prices could drop down.

You can’t protect 100% of people from the consequences of their decisions.
Just shield the majority, and hence the economic system, so we’re not all caught up in a big collapse.

that old line that if you owe the bank 10k, you have a problem, if you owe them 10M, the bank has a problem rings true here.

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You can manage risk though.
FWIW I’ve taken a hit on two out of four (owner-occupied) properties.
I’m not whinging about it. I get itchy feet and was prepared to wear it.

Anyone purchasing has to go in knowing they could be down in five but will be up in ten though.
That’s just common sense.

Gee for a policy that over half the country doesn’t agree with there’s not a very balanced view in here.

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shrugs
Not a lot of Herald-Sunner/Sunrise drones in here.

It’s also a matter of how the question is framed.
How about:
Do you think you should be paying for the tax break of someone who owns ten properties?
Yes or no?

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But this is getting back to the same chicken v egg thing.
Do something and it hurts. Do nothing and the risk of the eventual crash gets worse.

The current trend is unsustainable.

But I’m not sure banks will be hit overly hard. They’re some of the most secure, bluest chip stocks in the world. And the stricter lending criteria insulates them against a reasonable downturn - just probably not 20%. But the only way it gets that high is if the banks decide to call in a bunch of mortgages and do it at a loss.

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Yawn

I can’t understand how you’re putting yourself to sleep.

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They can keep the ones they have - they’re not at risk.

They can negatively gear new builds.

People who have negatively geared properties don’t lose out.

Those who want them lose access to existing properties.

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Yes. Current properties with negative gearing will be grandfathered. I’m not actually talking about investors with negatively geared properties. I’m talking about the impact on the market as a whole. More the average people who have all of their savings tied up in their homes.

Cool. So explain the losses they might take due to the changes?

Are you talking about those selling to go into assisted living or similar?

Good luck getting an explanation.
Just remember this is about working families, or jobs and growth, or Scott Morrison is working for the Central coast, or whatever the current LNP slogan is.

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Yes at both ends. Young people who have just bought a place or people about to retire looking to downsize. Taking a large amount of buyers out of the markets will cause an already falling market to take a pretty big hit. My opinion has nothing to do with left or right politics by the way. It’s not a political issue for me like it seems to be for a lot of the people posting in here.