I’m not sure what you’re specifically on about, but I think the main thing you’re missing is that tapping Super for a home is a dumb idea as far as making property more affordable, full stop.
I’d suggest you watch ABC’s 7 o’clock news’ report on it, & hear what all the experts have to say.
Are people saying the only reason to buy any property is for investment so you can negatively gear it? And then sell it when you retire or live off the rent you get from it?
Also then why is being able to buy a house now the privilege of the middle class??
What if someone young family wants to buy a house to live in?
Not sure about that that I’ve got a few years on you.
You’re 3 wives to the good. I’m younger than Captain Jack for starters.
I’ll give you a hint…my first game was in 1957 and I was 4 at the time.
I don’t know what “People” are saying, … but I’M saying, that we need to bring the housing market back in line to a reasonable median price versus median wage ratio.
Investment in property as a wealth builder, instead of necessity, has made it blow out to ridiculous levels.
I guess my overwhelming point is this.
Property won’t be any more affordable in the future than it is now. Deposits are hard to save in today’s economic climate for the average household.
No goverment really wants house prices to come down, far to many voters lose money if it does, far to many businesses lose money if it does.
There are people out there who are 25-35 who will find it hard to save 40k for a deposit to even buy a modest house in Lara.
Don’t lower the price of the housing market, and if negative gearing is wound back, rental prices would rise. Surely, thinking that won’t happen is like thinking trickle down economics works.
The only way to lower rental prices without it effecting negative gearing that I can see is lessening the amount of people looking to rent.
Which means making it easier to have people enter the buying market.
As far as I can work out, letting people use a portion of their Super doesn’t force the banks to soften their lending criteria to make that happen so avoiding what happened in the US to an extent.
It’s not perfect but I think most people using some of their Super would do so with the knowledge that it’s effecting the amount of money they are retiring on.
Expecting wages to rise or house prices to drop is pretty wishful thinking that is great to fight for but doesn’t solve or even attempt to arrest a spiralling problem.
There’s ample evidence that this is not true. It’s a furphy proffered by the profiter’s.
Not to buy what or where they want to have or to live. They can also invest with others and share the gain at the end.
I have an investment property with my two sons, purely to get them into the property market. Because there was no other way they were going to get there.
You’re assuming the only additional cost to purchasing a home, rather than renting one, is that deposit.
If instead you invested the (say) $10K difference per year at 5%, you’ll have $664K in assets at the end of a 30 year mortgage period. If it was done by salary sacrifice into super, you presumably pay at least $1750 less tax for the year too.
My Dad, and many of his mates, all told me property goes in cycles, as do economies, as they persuaded me as a 2nd year apprentice to go in to debt & buy land & build at 19, they’d seen it all happen over their lives.
I have seen it happen in the exact way they stated then 3 times since.
It’s either take the heat out gently, or wait for the bust, and all those waiting with capital to swoop on the bargains.
Which do you think would be better?
Of course, I hear what you say about political popularism, but Labor is running on just that policy, and polling say’s they have ample support among voters.
It perfectly aligns with & represents Labour principles & ethos, and if elected on that platform, they have a mandate to do it.
I think as the Reserve Bank has an ideal inflation band, and makes monetary policy adjustments to stay within it, so should any Gov of the day adjust these sort of policy’s so we stay within a reasonable med H Price to med wage ratio.
It’s something I’d like to see debated,and then a bipartisanly set figure, binding all future Governments to it as a performance guide, like unemployment, inflation, debt, …etc.
No one ever talks about the fact that wages have stagnated and more people are underemployed.
The real problem isn’t the high cost of property, it’s the low wages. If wages had gone up 4-5% pa over the past twenty years, people could afford housing.
In many cases they have gone down in real terms.
Read this. It at least explains to you why what you are calculating isn’t the whole picture. I might add as well this doesn’t actually show the tax advantages of superannuation either but it might get through to you.
Good onya Scorpio, I’m in morbid fear of how hard it could be for my kids, and it was really hard for my wife and I, ten years ago, it’s worse now, it will be diabolical then.
Mine are in their thirties and I could see they were never going to get anywhere despite working their butts off.
The investment is tied to my place and it’s been a pain whenever i want to apply for another loan or credit card, because all three of us have to be involved. And we bought it in 2008 and the GFC slowed it down a bit.
But by next year we will have had it ten years and they should be able to get a deposit out of it, maybe $60-100 that they would never have saved any other way.
And my share will help pay my mortgage out.
That makes sense, but what about the money I’m spending on renting say, what’s that doing for me? Assuming I can mortgage say 320k and repay it for around what I’m spending in rent?
Yeah but that ain’t by getting solved overnight
If you are renting a property worth $320,000, you are not paying $396 p/w in rent (which is the principle and interest payment minimum over 30 years @5% without council fees or house insurance which i’d assume you’d want as well).
You didn’t read the article did you?
I did, and parts of it make sense. But only if you are looking at it from the perspective of the renter assuming they are making other smart investments.
What I was talking about originally is the simple situation of a young family wanting to buy their first home. They want a home. Not a roof that can be pulled out from under them at any time. (We bought because we lived in 4 houses in 5years due to owners selling or wanting to move back in)
They are very different set of situations. I don’t think you get that tbh. If you are a settled family, who lives near family and work. Renting is ■■■■.
Plus where in Melbourne do you pay 400 rent on a 320 house? My old ducks house in Dandenong is worth 600k
You said it!