could not agree less.
Market likes making money. Banks investing in existing housing is literally money for jam. Worst case they foreclose. How can a class of investment that largely loses value keep gaining in value?
It’s all out of whack. Overvalued. Has to be corrected.
Has to be tax reform.
All homeowners have to take a hit.
That won’t happen because people in Scorp situation take to much of a hit
What would be ideal is if old fogies lead the way, sell their capital city properties and move to the country/coast/regional centres, giving them a boost as well.
Causes all sorts of benefits but the big downside is that young parents lose access to the free childcare.
No good if all it does is create property bubbles in placed along the Surf Coast and Bellarine and Mornington peninsulas.
I feel as if I’ve led the way.
Surely everyone’s super is pretty much linked to the property market as most funds invest heavily in property?
Perhaps something along the American model of making interest on your first home tax decutable?
It’s a complex problem that’s only going to get bigger… needs some creative thinking.
That’s what I was thinking. If you want to invest in property, why not pump more into super & switch some $$ into a managed property fund? I assume you get the gains without having to worry about bad tenants or CGT (though your kids don’t get to inherit the bricks & mortar).
I’m pretty sure Super Fund Property investments are all commercial. Soulnet might know if things have changed since my time in the industry with MLC (Super & Life Agent in the 90’s)
AFAIA only SMSF’s invest in residential.
As far as I know it’s mostly commercial or industrial (like a road or a port). Never heard of residential (a house) projects unless it’s massive like a Rialto tower.
Super managed funds like a typical balanced fund generally only invests 5% to 20% in property.
Sure, but you can switch some $$ from balanced to property. I’m no investment whizz tho - do gains from commercial property significantly differ from residential?
The harsh reality is that some people simply cannot afford to buy a home. That is either because they don’t earn enough money or they are not disciplined enough to save consistently for a deposit or pay regular repayments.
Artificially providing a deposit won’t for the purpose of a bank demonstrate a savings history and nor in reality will it demonstrate that someone can manage a mortgage.
It is one of the reasons that property investment is important in that it provides a home for people that cannot or should not purchase a house.
Unfortunately I think your right.
A side discussion needs to be had in Australia on what life time renting looks like. If the new norm is 20-30% of people are renters for life, then what needs to change to make that workable. i.e longer leases 5-10 years, Allow renters to do capital works, minimum standards for rentals in terms of heating/cooling and appliances.
A lot of Bens concerns arise because we can imagine a retiree with limited rights living at the mercy of the landlord and living in squalor. If rental stock was good quality and lessee rights were improved this might not be the scary proposition it is today.
I’d have to say that renters rights are pretty good although agree on longer leases.
As a landlord some of the behavior of tenants and their ability to play a system that supports the poor behavior is incredible. I can provide a current example but probably the wrong thread.
There’s horror stories on both sides. Tighten up the extremes and the situation becomes much more attractive long term for both tennants and landlords.
Oct 53 for me, so I was right you are really old !!!
I was the last call-up, but being a long-haired radical I refused to put in the cardand register, so I would have been called up; would have again refused and may have gone to jail like many I know. I did really have a vested interest in Gough winning !!
Yep Ben that is the same here in the Marsh.
The 3 bedroom unit we have in Toorak is said to be worth $900 K and we get $600 a week rent; which has fallen from a high of $720 three years ago. If I had 3 x $300K 3 bedroom home sin Bacchus Marsh I would be getting perhaps $1100 per week. Again I suppose the poorest get screwed harder, as they have less options when it comes to having a home.
I know that many renters here would buy a home if they had that deposit, but it is not going to ever happen for them.
This is essentially my worry, let alone when these retired renters hit aged care. Then it gets really tricky.
Generational renters is something we need to be futureproofing against.
Or planning better for.
Same thing really
And that’s why this idea while having issues, and in my mind has to be linked to building like the FHG is actually addresses it somewhat. I don’t care what any one thinks if someone can mortgage for less than they rent for then they can afford to mortgage and no wonder they can’t get a deposit together.
[quote=“Humble_Minion, post:4896, topic:3090, full:true”]On a broader economic level, it’d be good to decrease the amount of investment money dedicated to property. It’d make housing more accessible to lower-income earners, and it’d free up that investment cash to go into business investment, innovation, and sectors of the economy that actually create jobs rather than just sit around on qtr acre blocks. But saying that is easy and doing it is hard - for decades property investment has been an entirely rational choice (arguably the only rational choice) and there’s a huge number of people with their life savings in bricks & mortar. You make housing affordable (significantly reduce property prices, in other words) then those people get screwed over, unless you grandfather all your measures which basically enthrones them as a property-owning upper class.
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I feel like this is overlooked in these discussions. How come residential property is seen as the ONLY (safe) way to invest your hard-earned? Does a venture capital industry even exist in Australia?
Kinda leads in to my own theory on all of this is that the government won’t do anything about it because a slowdown in the construction industry would send unemployment to the moon. With manufacturing all but dead there’s only three large industries left that actually produce anything of worth (agriculture, mining and construction), and we simply can’t afford to have another one die off.
From this article “Australia faces a one-in-three chance of a recession next year: Minack”
Why is this?
I recall hearing that the resurgence in US manufacturing was largely based on their energy prices plummeting. I’ve never understood why they pump so much gas just outside of where I live yet I pay through the nose for energy.
