Australian Housing Affordability Discussion

[straitman]

Good reason for that... Not enough jobs in Sale

Hardly.

If you look up the details then you'll see that Sale is way above average in many areas. The current issue is the downturn in the oil industry due low oil prices and the low dairy prices.

 

[whatmeworry]

Hardly.

If you look up the details then you'll see that Sale is way above average in many areas. The current issue is the downturn in the oil industry due low oil prices and the low dairy prices.

Maybe I should qualify, not enough good paying jobs?

But touching on the downturns. Friends in Foster had a good dairy farm near Foster, sold up, retired and then for some bloody reason went to North West Victoria to dairy without irrigation. Funny thing was they got drought breaking rains in 2005-6.

Watching Landline, I can't believe the devastation the lowering of milk prices by Murray-Goulburn has done to the dairy industry. Just look at the Dairy cows on the market now.

Friends in Norway telling me how the low crude Oil price has stuffed the job market there.

 

[drron]

Let me go through the last 25 years of negative gearing of property in Australia, if that makes you happy. Fine - I know it will just annoy you.

In 1990 you were more likely to be positively geared when investing in property, and negative gearing "cost" the economy a few hundred million at best. Then in 1999 Howard introduced the 50% reduction in CGT, and house prices started their inexorable climb. Negative gearing became de rigueur, as rental losses were tax deductable and would be more than compensated for by the capital gain. Negative gearing now "costs" the economy billions (the last year I can find for net rental loss is 2012 and it was at $8 billion). Whilst it can happen anywhere in Australia, the #1 negative gearing location is Sydney. Where do you live, drron?

Now we are in to case reports.Not really a very accurate way of informing me of the facts.
Besides where did you get the 8 billion from?The Australian Taxpayers Association said 4 billion.Exemption for family home is costing the Government 35 billion-from ATO website.

PS the ATA is not a right wing ginger group.Their submission wanted deductible super contribs reduced to $10000.

And where are the figures that Sydney is the number 1 negative gearing city.The old white shoe brigade on the Gold Coast weremuch better in their promotion of it and they do have a large supply of holiday rental properties-the type that people love to negatively gear.

I will explain again I am anti negative gearing.I just don't agree with the biased political slogans being used by many when talking about it.There are plenty of well argued points against negative gearing.Yours is not one of them.But I get it.To you I am a right wing redneck so anything that I write has to be opposed even if you agree with the basic premise.

 

[Moindardt]

I will explain again I am anti negative gearing.I just don't agree with the biased political slogans being used by many when talking about it.There are plenty of well argued points against negative gearing.Yours is not one of them.But I get it.To you I am a right wing redneck so anything that I write has to be opposed even if you agree with the basic premise.

One thing a lot of politicised people forget is that most political parties agree on the vast majority of legislation. They tell (brainwash) the faithful to fervently oppose everything the coalition says, to stand up for your rights. There is a union guy at one of my clients who is still on a very old union-negotiated workers agreement (I think it predated Howard) because it was the last one the union was involved in. Subsequent to that, the employees cut the union out and negotiated themselves for a far better deal. We have shown him how he can earn hundreds more a week on the new award (AWA's no longer available) but he blindly follows what someone else said. I even did up a spreadsheet to show him how he had missed out on about $100k over the time and still he refuses. I think they teach things like that in North Korea.

 

[ComeFlyWithMe]

Thought bubble: when the report came out about all the "empty" properties in Melbourne CBD I started thinking about my own strata experience. Water rates in large strata plans are not typically individually metered. Each lot pays a service charge but the actual usage is payed for by the strata plan.
So that got me thinking as to how using water rates on apartments is a good indication that they are empty? Was the analyst that stupid they didn't realise that or was there more to this analysis?

 

[UP4014]

One thing a lot of politicised people forget is that most political parties agree on the vast majority of legislation. They tell (brainwash) the faithful to fervently oppose everything the coalition says, to stand up for your rights. There is a union guy at one of my clients who is still on a very old union-negotiated workers agreement (I think it predated Howard) because it was the last one the union was involved in. Subsequent to that, the employees cut the union out and negotiated themselves for a far better deal. We have shown him how he can earn hundreds more a week on the new award (AWA's no longer available) but he blindly follows what someone else said. I even did up a spreadsheet to show him how he had missed out on about $100k over the time and still he refuses. I think they teach things like that in North Korea.

If he is happy with less, then good luck to him. Wish I would be.

 

[whatmeworry]

What John Symonds originally thought about Negative Gearing?

[video=youtube;kaFeSfZKD-g]https://www.youtube.com/watch?v=kaFeSfZKD-g[/video]

"Negative gearing wasn't designed for people who can afford to go and buy $1 million, $2 million, $3 million houses or apartments for negative gearing to offset the bulk of their interest payments off their tax," he said.

Read more: Election 2016: 'Aussie' John was once positively against 'unfair' negative gearing system
​

Mr Shorten has accused Mr Symond, whose firm has donated $450,000 to the Coalition over the past decade, compared to $20,000 to the ALP, of doing Turnbull's bidding in the tight election contest.
Mr Symond made similar comments against supporting high income earners through negative gearing in February last year but did warn against creating any shock to
"The intention of negative gearing when it was introduced was not to facilitate a $10 million- $20m house to rent out, get a 2 per cent yield and write the rest off on negative gearing. It needs tweaking on capping the benefits," he told The Australian.

Election 2016: 'Aussie' John was once positively against 'unfair' negative gearing system

 

[ComeFlyWithMe]

What John Symonds originally thought about Negative Gearing?

[video=youtube;kaFeSfZKD-g]https://www.youtube.com/watch?v=kaFeSfZKD-g[/video]






Election 2016: 'Aussie' John was once positively against 'unfair' negative gearing system

In 2013 the median house price in Sydney wasn't over $1M.

 

[Moody]

Negative gearing does not "cost" anything - revenue not collected by the government is not an expense. Or are you a fascist who thinks all property and money belongs to the government?

Making a net loss on property rentals reduces tax otherwise payable by over $10B a year. The interesting question is whether the government gets this back in CGT, and also where the money comes from that provides this revenue.

And YOU calling ME a fascist is about the funniest thing I've heard all evening. Fine - it's been quite dull.

http://www.domain.com.au/news/negative-gearing-losing-its-lustre-ato-figures-show-20160223-gn0unk/

 

[drron]

But the tax is not otherwise payable.It is a legal tax deduction.
We have a Capital Gains Tax.There is a legal exemption for your primary residence.If this exemption was not available there would be an extra 35 billion tax received-from ATO figures.
So using your logic non home owners are paying many thousands of extra tax to subsidise home owners.

And where does that 10 billion figure come from?
A few posts ago you quoted a figure of 8 billion.
The submission by the Australian Taxpayers Association to the Senate Tax review said it was 4 billion.

 

[Moody]

Now we are in to case reports.Not really a very accurate way of informing me of the facts. Besides where did you get the 8 billion from?The Australian Taxpayers Association said 4 billion

The financial stats of negative gearing seem to be a moveable feast. Here are some from Domain :-http://www.domain.com.au/news/negative-gearing-losing-its-lustre-ato-figures-show-20160223-gn0unk/

But feel free to find ones you agree with, and let me know if you want to still compare data from 25 years ago .... as that was the period of your choosing after all.

.Exemption for family home is costing the Government 35 billion-from ATO website.

Oh - so you think people should pay CGT on the family home??? Careful that Anachronism doesn't start calling YOU a fascist too!!!

I will explain again I am anti negative gearing.I just don't agree with the biased political slogans being used by many when talking about it.

Can you give me an example of these biased political slogans, and where I have used them?

]There are plenty of well argued points against negative gearing.Yours is not one of them.

What is my argument against negative gearing (and feel free to put words in my mouth .... again). [/QUOTE]

But I get it.To you I am a right wing redneck so anything that I write has to be opposed even if you agree with the basic premise.

That's irony .... or is it rhetoric .... or maybe something redactible ...??? I get so confused.

 

[dajop]

Making a net loss on property rentals reduces tax otherwise payable by over $10B a year. The interesting question is whether the government gets this back in CGT, and also where the money comes from that provides this revenue.

Actually I think the cash itself (CGT, negative gearing etc) is not the important factor. I also disagree with other posters who say there is no cost to negative gearing.

Everyone seems to be getting mixed up between $ and cost - they are not always the same thing. There is potentially a cost to the economy of encouraging investment in non-productive assets (such as existing home stock)- that is not necessarily reflected in CGT returns outweighing the foregone revenue, nor reflected in the idea that there is no cost to foregone revenue (after all ... having top rate of tax of 45c++ could either cost or benefit the economy vs 60c or 35c top rates depending on how all the factors play out, yet one could easily argue that reducing the tax rate from 45c to 35c would "cost the government" $xx_ million)!

 

[cove]

It gets down to two persons with a major savings goal each year to be able to afford to buy a home. Going without on arbitrary stuff like $5 special coffees and replace them with iced water can really add up. Avoiding the purchase of new cars is a biggie and you can buy almost new furniture for a fraction of full retail. Every car becomes second hand once it leaves the dealership. Many young folks are useless at waiting because they can purchase anything right now.....

 

[drron]

The financial stats of negative gearing seem to be a moveable feast. Here are some from Domain :-http://www.domain.com.au/news/negative-gearing-losing-its-lustre-ato-figures-show-20160223-gn0unk/

But feel free to find ones you agree with, and let me know if you want to still compare data from 25 years ago .... as that was the period of your choosing after all.





Oh - so you think people should pay CGT on the family home??? Careful that Anachronism doesn't start calling YOU a fascist too!!!



Can you give me an example of these biased political slogans, and where I have used them?



What is my argument against negative gearing (and feel free to put words in my mouth .... again).

That's irony .... or is it rhetoric .... or maybe something redactible ...??? I get so confused.

[/QUOTE]
I have given the data over 25 years not from 25 years ago.Why?because housing is usually not a short term investment and negative gearing has been the law for over 30 years now.One or two years figures are meaningless in this context.

And there you go putting words in my mouth.It is you whose argument brings up CGT on primary residences as your argument is that negative gearing is a cost to the budget.The CGT exemption on primary residences is exactly the same situation.As I am against your argument on negative gearing I am never going to use it against residences.

Arguing that we should get rid of negative gearing because it is a cost to the budget is a political slogan.It is the only argument that you have made in this discussion.


And dajop I do agree there is a cost to negative gearing which is the cost of diverting income into basically non productive assets.My saying it is not a cost is in the sense that it is not a cost to the budget as it is people using a legal tax deduction.It should go for that reason.

 

[Moody]

I have given the data over 25 years not from 25 years ago.Why?because housing is usually not a short term investment and negative gearing has been the law for over 30 years now.One or two years figures are meaningless in this context.

And there you go putting words in my mouth.It is you whose argument brings up CGT on primary residences as your argument is that negative gearing is a cost to the budget.The CGT exemption on primary residences is exactly the same situation.As I am against your argument on negative gearing I am never going to use it against residences.

Arguing that we should get rid of negative gearing because it is a cost to the budget is a political slogan.It is the only argument that you have made in this discussion.


And dajop I do agree there is a cost to negative gearing which is the cost of diverting income into basically non productive assets.My saying it is not a cost is in the sense that it is not a cost to the budget as it is people using a legal tax deduction.It should go for that reason.

You bring up the spurious figure of $35B as the "cost" of not taxing the capital gains made on family homes, AND THEN BLAME ME FOR IT! Priceless!!

The rest of your post makes even less sense .... and yes - that is in fact possible.

 

[JohnK]

It gets down to two persons with a major savings goal each year to be able to afford to buy a home. Going without on arbitrary stuff like $5 special coffees and replace them with iced water can really add up. Avoiding the purchase of new cars is a biggie and you can buy almost new furniture for a fraction of full retail. Every car becomes second hand once it leaves the dealership. Many young folks are useless at waiting because they can purchase anything right now.....

Saving money is the simplest thing any person can do.

- Stop eating out. That includes breakfast, lunch and dinner especially McDonalds, Pizza Hut etc. I seriously cannot believe the number of people who go and spend $8 on a gourmet tuna sandwich.
- Stop going out on a Friday & Saturday and piss $50-$100 down the drain
- Place a hold luxuries including cars, designer clothes, expensive toys/gadgets, holidays

You will be surprised how quickly money adds up. Back in 1989 I created a basic spreadsheet on the System/38 and was printing in table format on A4 paper. It would print a line for each month for the term of the loan with the starting balance of the month, repayments, interest and closing balance. The data entry was simple and it would handle multiple repayments per month.

The best thing about it was I could do simulations. What if I paid $20 extra right now. You would see the last month repayment in 20 years now need $200 less. What if I pay $500 extra now? You would see 2-3 months disappear from the end of the spreadsheet. This used to bring a huge smile to my face and every opportunity I would get I would do simulations which encouraged me to save money. The loan was paid in less than 5 years.

In 1994 I converted the System/38 spreadsheet to an Excel spreadsheet along the same lines. Out of date now but I loved the discipline of saving.

Set up my future and some people want to take that away from me before I have had a chance to enjoy myself.

 

[junbugging]

Set up my future and some people want to take that away from me before I have had a chance to enjoy myself.

Name them.

Pretty much everyone of note has said that existing arrangements will be grandfathered.

 

[cove]

To afford our home in the seventies we both worked and I did nights and Saturdays. Nothing much has changed if you want to get a home in 2016. Just be aware that 3% mortgages will come and go and I lived through a period when the rate was 17.5%.
We bought our current home at auction during the 1991 recession (that we had to have).

 

[marki]

Yes - like your "climate change is cough" facts. Non comprende I'm afraid .....

Yes you obviously have no ability to understand the facts.No point in any further answer.

Now Now getting a little personal

 

[whatmeworry]

To afford our home in the seventies we both worked and I did nights and Saturdays. Nothing much has changed if you want to get a home in 2016. Just be aware that 3% mortgages will come and go and I lived through a period when the rate was 17.5%.
We bought our current home at auction during the 1991 recession (that we had to have).

My parents within 10 years (late 60's-70's) of moving to Australia had bought their second home and also added two children to the fold. Despite moving to a working class suburb, for the amount they paid for their second home they could have bought into Canterbury, Hawthorn or Brighton in Melbourne.

Mind you, my parents do mention the lack of culinary culture in Australia at that time in supermarkets and restaurants, which meant dining out was restricted to your ethnic club that served good cheap food.

My parents did afternoon/night shifts and double shifts and my mother still regrets going back too early after my birth and the time they missed out on raising their children when young.

No BS but my Real estate agent mate who is having another kid actually loves the double dipping paid parental scheme. He actually said he will vote Labor.