Politics

I am not saying people should be protected. I am saying the government wants to protect ts budget position, and be aware of the fact that a lot of baby boomers didn’t have the opportunity to get super, so invested in the property market. They are getting ready to retire and a drop in the market could push them on to pensions.

International investors are a big part of the problem. We saw it over here in the mid 2000’s. Without them, supply would be tightish but nothing like it is now.

it’s madness that banks et al are allowed to offer these 95% loans. criminal.

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Nothing stopped them from investing in any other area. As previously said you can negatively gear pretty much anything.

Also nothing is stopping them from selling all their investment properties, buying a $4M house to live in, keeping $900k cash and still getting the age pension.

For me lowering the price of houses is only going to hurt more than it helps. What needs to happen is make it easier for first home buyers to enter the market, incentivise to build particularly.

The only thing the government has said on that front is “borrow from your parents”

On that note

Cheers Benny. Now my new phone screen saver.

Housing affordability is a hugely complicated issue and our pollies play it stupidly simple to divert attention elsewhere.

Negative gearing/capital gains is ridiculously generous for investors, so it’s off the table as far as the Libs are concerned.

Stamp duty is a con, and a hugely inefficient tax, and completely inconsistent across the country.

Land supply for new development is closely controlled to maximise state government revenue and land banked by developers to drop feed higher priced projects.

Everyone wants to live as close as possible because commuting is terrible.

So rather than tackling issues, we get ‘get a better paying job’ or my personal favourite, class war between generations (greedy baby boomer investors, entitled want-it-all youngsters).

If governments (state and federal) got serious about infrastructure development, combined with negative gearing and tax reform, most of these problems would go away.

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Baby Boomers Own More Than Half Of Australia’s Wealth

Spandas Lui
Oct 27, 2016, 10:00am

Baby boomers, those aged between 45 and 64, may make up less than a quarter of Australia’s population but they hold more than half of the nation’s wealth. That’s according to a study by McCrindle Research, which broke down the household net worth of different generational groups as well. We also found out that the top 20% of the richest Australians hold 62% of the country’s private wealth while those at the bottom end of the scale have less than 1%.
The wealth distribution imbalance isn’t just a problem the US; the richest 20% of Australians have an average household net wealth of $2.5 million while the poorest 20% have around $35,500; in other words, the richest Australians have 71 times more wealth than the poorest. Wealth includes a combination of accumulated income and assets that are owned.

The median price for a house currently sits at $720,000.

The top 20% will most likely be baby boomers given that they hold 53% of Australia’s private wealth. Here’s a breakdown of wealth distribution between different generational groups in the country.

Richest 62 people own as much as half the world’s population: Oxfam

PM By Heidi Pett
Updated 19 Jan 2016, 12:29am

An Oxfam report has found 62 of the world’s richest people own the same amount of wealth as half of the world’s population, a statistic the charity is using to highlight the scale of global inequality.

Five years ago the dubious honour of having more wealth than half the world’s population went to a group of 388 people.

Oxfam said the wealth of the world’s richest 62 people had increased 44 per cent, or about half a trillion dollars, over that time.

During the same period, the wealth of the bottom half has dropped 41 per cent, or over a trillion dollars.

Oxfam released the report ahead of the World Economic Forum in Davos, Switzerland, later this week.

Oxfam Australia chief executive Helen Szoke said they had not expect the figures to be this high.

“What it’s showing us is that the inequality gap is widening at a much faster pace than what we thought, and the concern is that we are really locking billions of people into a cycle of poverty and there aren’t the mechanisms there to pull them out of that,” she said.

Ms Szoke said one mechanism Oxfam was trying to address is the issue of tax havens.

“About $100 billion annually is lost to poorer nations because corporations put their money into low-tax jurisdictions,” Ms Szoke said.

“And once that happens it means that a fair share of tax isn’t being paid to support the social infrastructure that’s necessary to help people lift out of poverty like education, for example.”

Ms Szoke said repairing the global wealth gap would have to be a joint effort between both business and government.

“This is a boldness that’s required and we need that boldness at the Davos meeting,” she said.

She identified three key things that the World Economic Forum could do:

Address the issue of tax practices and clamp down on corporate tax avoidance
Ensure that governments used that money to invest in social infrastructure
The need for a living wage, rather than a minimum wage
Women often the worst hit by global inequality: Oxford report

The report noted some of the worst hit by global inequality are often women and that if the interests and welfare of women was not addressed, many communities would be let down.

Cassandra Goldie, from the Australian Council for Social Services, said income inequality was not just an issue for the developing world.

“Australia is clearly not at the extreme, for example like the United States, but we are heading in the wrong direction,” Dr Goldie said.

"Our own significant report found that right now we’ve got people in the top 20 per cent income group — they’re receiving five times as much income as somebody in the bottom 20 per cent.

“And in terms of wealth, it’s far more extreme.”

Dr Goldie said there was 70 times more wealth for people in the top group, compared to people in the bottom 20 per cent.

“We know globally that income and wealth inequality becomes increasingly a problem, it’s not good for the economy, and it’s certainly not good socially,” she said.

Agreed bug.

I would like to know if there is a good scheme globally for increasing owner occupied buying power and reducing investment buying.

I think we are now the only nation that negative gears property so surely there are better examples than the couple of month one here where it was scrapped.

The conversation was about a $1m property.

I think all your mortgage interest is deductible against income in the US.

No idea whether that applies to investment loans too, but there are funny aspects of US tax law…like how Trump was able to offset business losses against his personal income. That one’s got Grizzly Adams-type whiskers on it.

And also no idea of CGT in the US.

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According to The Age today, foreign buyers spent $8b on Australian property during the previous 12 or so months. That’s something that can be done right there.

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I agree. I think it is just too easy.

But at the same time, there’d be Aussies buying in the South Pacific or south east Asia.

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If it meant that locals were being priced out of home ownership in their particular areas then it would make sense for those government’s to place restrictions on foreign purchaser’s also.

Agreed. But it’s unlikely to happen.

You’ve got countries like China and Japan building roads and hospitals in poor pacific countries. Then voila, you’ve got support for Japanese whaling and holiday homes for Chinese in Suva.

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That will be across the board, not just homes.

You realise ‘foreign’ investors can only purchase FIRB approved properties?

i.e new or to be developed stock (majority off the plan apartments and H&L)

So locals are not being ‘out bid’ as the prices are set by the developer.

Alot of this discussion is a smoke screen by the boomers - saying look, look whilst settling their 5th investment property

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Firstly some foreign investors buy to be developed stock and don’t develop it. In other cases they buy what they like and only recently has govt started halting sales.
But many who have student children in Australia buy property. Not sure what the rules are there.

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