Tl;dr: Netherlands cuties considering a ban on investors snapping up properties and renting them out.
33% of recent home buyers are investors in Netherlands. Does anyone know how much % of recent home buyers are investors or occupiers?
https://nltimes.nl/2021/09/02/dutch-cities-want-ban-property…
@Leiothrix: But with property the negative gearing is not constrained to the property income. Property losses can also reduce you overall net income, not just the property income.
@Brick Tamland: Just like investing in any other asset class.
It's offsetting losses against your taxable income.
Works with shares, property, business investments, or anything else you spend money on to generate income.
Property is not special.
@Leiothrix: are u sure? How can one offset share trading loss towards their income income? only investment property can.
@OrangeBJ: Not trading loss, that's a capital loss. You can offset that against capital gains, but can't use it to reduce your taxable income.
If you have interest expenses in maintaining your income generating share portfolio (i.e. margin loan on shares that produce dividends) then that is claimable as a tax deduction.
Property is not special.
@OrangeBJ: As I understand it, if you were to borrow money to purchase shares, the interest would be tax deductable and the dividends would be taxable income.
(the same as interest negatively geared on a property)
A loss on the shares however would be a capital loss and can be only offset against capital gains (even in future years)
@tonka: thought we were mentioning negative gearing against personal income. Only investigating in property has that privilege. It's a huge incentive for high income earners who can offset with theirs IP loss in their 37-45% tax bracket.
thought we were mentioning negative gearing against personal income
We are.
Borrowing to invest in shares is exactly the same as borrowing to invest in property.
Property is not special.
@Leiothrix: I don't borrow. I can offset my IP loss against my SARALY but could I offset my share trading loss vs salary? Doubt it.
@OrangeBJ: A share trading loss is a capital loss, you can only offset that against a capital gain.
You can't offset the capital loss from selling a house at a loss against your income either.
They're both the same, property is not special.
@Brick Tamland: My bad, I was under the impression that a property loss was the only type of loss that could be applied to other income. A quick google shows that this is a common myth. There ya go, things I've learned today.
What is so special about property that it should be exempt?
Um… You can't live in a share portfolio or a crypto wallet?
You could use the dividends from shares to pay rent.
That is only for those who have sufficient funds to invest after paying their basic living cost. Only a small cohort have sufficient financial reserves and ability to do this.
The median rent across Australia is currently $476 per week, according to a new report from property research house CoreLogic.
To achieve that sort of return, you would need around $250000 invested, as a minimum.
So then the ATO would want their cut, as this would be in addition to your salary/other income.
@DashCam AKA Rolts: OK well you generally invest more than that in a house, so what's your point.
My point is an equivalent investment in share would also provide a place to live.
@tonka: You don't need the entire sum to buy a house. Mortgages enable you to access a property. Banks are highly unlikely to lend similar sums to an individual to invest, you won't get a loan at the same rates as a mortgage. I don't think you have really thought this through.
My point is an equivalent investment in share would also provide a place to live.
Only if you are well off, or have a high income stream, or living off parental assets. This is not the case for the majority of young people.
@DashCam AKA Rolts: My point stands, it was fairly straightforward. You are adding lots of ifs and buts now about peoples loan eligibility. And while you may or may not be right about bank lending practices I doubt you have evidenced anything before making your assertations.
@DashCam AKA Rolts: Public housing has its own big issues.
I think Thatchers idea was better (where people could buy a home).
tbh I never really understood why Gov's never built housing to sell (just lower the deposit requirements).
A lot of people can pay rent (which is close to a mortgage payment) but can't save 20% for a deposit.
@Ti-au: Rent to buy government housing is a great concept, as it gives the tenants a vested interest in the property, thus minimising one of the major issues with public housing, disrespect for the property.
@Ti-au: Her housing act was a complete failure. It has lead to landlords owning more houses and it costs the government billions in subsidies, so much in fact keeping the social housing would have cost them less and been better for the general public.
Thatcher's greatest contribution to the world was dying
Nah, let 'em suffer & die
We pay either way (hospitalisations, policing, gaoling, etc.). The problem here is the conflict between the idea of what's fair and what's socially acceptable and what's pragmatic.
If it is money out of my pocket then I care less about how I feel and more about there being more money in my pocket.
If property investment is so great, maybe there wouldn't be much cost to the taxpayer?
Regardless, we taxpayers are already paying for it through social housing, benefits, negative gearing, tax breaks, etc.
@Odin: After reading about all the solutions bought forward here, there's really only one clear solution.
Just take out profits (or incentives for profits) from things that are necessary or high use for people. Examples: education, health care, clean water, nutrition, clean air, access to electricity/power, housing, road infrastructure, internet, etc etc.
There will always be huge sectors for people to meddle in and draw inspiration/entertainment from. But these should be wants and not needs. Wealth inequality leads to problems, that's what we have here. The housing crisis we're seeing people on a Median Wage struggling with expenses since their cost-of-living rises faster than their wages, and they're unable to get out of the cycle, because they lack the huge captial necessary. People fortunate enough to be earning Average Salary and for having rich parents, they're able to invest into the housing sector and pump up the value, without actually contributing back. Meanwhile, the banks sit on the sidelines and laugh.
@Kangal: Good idea.
No profit from housing, and why mortgages? or bonds?
I mean may as well eliminate the stock market because some stocks supply food, bricks, shower parts, tiles and carpet.
People need cars so we should get rid of the profit from that.
I will let elon know.
We can just be like the old Soviet Union.
If the Federal Government took over they could spend 50% of the budget on housing. Yay!
I totally agree we should have no pensions, or a medical system.
@Ti-au: I thought you were being serious at first, then went heavy on the sarcasm. I also love how you (attempted to) strawman me.
The point is you are ignorant. There's this myth that's been sold by the billionaires of the world, through mainstream media and alternative media. And that myth is; the free-market will fix it.
The truth is that, how healthy a market behaves depends on the intelligence and character of the people in power, essentially the players. So you can have a heavily regulated market, but if it was designed by someone nefarious or an idiot, it can have the opposite effect as anticipated. Even if it is well-designed, but the people policing it are lazy or "toothless tiger" then you you won't be able to apply the necessary corrections. And the opposite is also true, if it's well-designed and well-policed, then you will have a healthy/functioning market or service. And the double-opposite is also true. If you had the top thousand CEOs agree to make better products, at lower prices, with fairly paid workers, and being environmentally friendly. Then you will also have a healthy functioning market.
What matters is the people in power. Just imagine if you made an Alternate Timeline, where you replaced Hitler with Bismarck.
Now I'm not advocating for communism, or socialism. I'm just stating that the free-market capitalist is not the solution for every problem. Neither is regulation, as it can stifle the market. As you can see my above post, I am only advocating that the right solution should be used for the right problem. Important human needs/rights cannot be trusted to the private sector in many ways, as history shows.
One example; making people be eligible to only own three properties and not sponsor for more, would potentially deflate most of the bad air out of the property bubble.
@Kangal: It never works, because people will try and get around the regulations, even with punishment and then after a while it just becomes an accepted way of doing business.
If you had the top thousand CEOs agree to make better products, at lower prices, with fairly paid workers, and being environmentally friendly. Then you will also have a healthy functioning market.
This makes zero sense. It completely and utterly ignores the reality of their industry.
What happens if their market is in decline? why would they make a better product?
Does a "better" (how???) actually add that much value to the existing product?
There are 200,000 CEOs in America alone, so I don't know what doing anything with 1,000 is going to do, except allow a lot of self congratulations.
Wages is due to supply and demand - there is less supply, wages rise.
Why are wages in the US rising? why are some McDonalds paying $18 an hour? Its not because the CEO agreed to lower profits to investors who take all the bankruptcy risk - its because there is not the unlimited immigration into the US from the Southern border anymore - "Biden Administration to Keep Using Public Health Rule to Turn Away Migrants"
introduced originally by Trump.
Who'd thunk it.
Or you can get situation like 7/11 in Australia.
I mean what happens if they are a Zombie company? Where do they pay rises come from? Losses, and hence easy credit?
I mean its weird - Regulation mandates minimum wage, yet supply and demand have pushed wages up in Australia so high that a professionals job (say $100k per year), is 50% more than minimum wage.
I couldn't be bothered to argue about green washing…
What matters is the people in power. Just imagine if you made an Alternate Timeline, where you replaced Hitler with Bismarck.
I don't know what this even means…… Imagine if Stalin didn't come to power, 700,000 people would of lived? Because Lenin was not murderous? (his agents were guilty of both political repression and mass killings, jsut like Stalin).
Yes Bismarck could of annexed all of Europe and ignored Russian instead, if he had been Hitler, thereby I guess forcing everyone living in Europe to live under a GU banner (German Union). I mean Bismarck did annex part of France, so I guess he was pro territorial conquest…. Do you support that?
The truth is that, how healthy a market behaves depends on the intelligence and character of the people in power, essentially the players.
No it doesn't.
It works off the free market system, incentives, and probably network effects, and the least effective way is through Regulation.
One example; making people be eligible to only own three properties and not sponsor for more, would potentially deflate most of the bad air out of the property bubble.
The vast majority of people own 1 investment property. So that policy wouldn't even help.
We don't have many landlords buying up a massive number $500,000 houses - the yields are too low to sustain any enterprise like that.
I mean if you believe it does - why does the US and Germany have large multifamily REITs are Australia has basically zero.
Oh and it would target developers who build a large property and have to hold them while they sell them off (or could be mandated to hold them as per Bank Contracts to stop oversupply). Are you going to make an exemption for them? who else are you going to make an exemption for? Companies that supply their own housing? especially in rural areas, like mining camps? Whats the criteria? Or we are we just going to ban them from building mining camps?
Beware of secondary effects.
I'm just stating that the free-market capitalist is not the solution for every problem
Its the only solution which basically works or at least sets up a non-capitalistic (aka taxpayer funded) based system. The only other system - Communism has killed 100,000,000 people.
The only thing that works the best to modify system is, perhaps, incentives. Regulation is usually just used by incumbents (who can pay for legislation to be passed) to sustain their power and perhaps help create a monopoly situation, until the corruption gets so big (aka 2008 housing crises) that it has to swing back the other way and cut out the absolute worst abuses (and then the incumbents go back to get regulation changed to favour them again).
Incentives can at least encourage a change of behavior (getting people to act in the correct manner) and of technological progress.
the free-market will fix it.
But we don't have free market - we have Corporatocracy in many industries.
The Australian Banking market is one of the most profitable in the World, and yet we really only have the Big 4. Thats it.
Why? Because the Government will do whatever it has to do, to protect those corporations. Why when we had the GFC did the Government do certain actions that favoured the Big 4, at the expense of small banks, even though everyone could see it was unfair?
The point is you are ignorant.
yes very,
@Ti-au: First of all, the above example was just an example. I didn't say it was true or not. I put it there to show what I meant by law/policy having practical effects on a market.
Unfortunately, there's no fruitful conversation to be had with you on this topic. You've drank the coolaid. Gone too far in. You sincerely believe that free-market capitalism will solve every issue. History begs to differ.
So I'll try to summarise my stance again:
Nobody disputes that with regulations you have people who curb the rules, and do dodgey stuff in their interest. But the fact is, without an authority on important things, you have far more people doing more dodgey stuff. Hence, the need for policy. And a policy can result in worsening the market, as I've already said above, so don't fight me on this point. It depends on how the policies/systems are made, the people in charge, and those who are enforcing the rules. Those people need to be both moral and intelligent. Otherwise, you are at the mercy of other people potentially running the market, for better or (more likely) worse.
Those people need to be both moral and intelligent.
You keep saying this - but how do you ensure it?
IQ Tests? "Experts"? (Experts have constantly got it wrong: go read The Population Bomb and The Limits to Growth, probably a travesty due to its effects on Policy, such as forced sterilisations).
The free market does not need morals or intelligence.
You sincerely believe that free-market capitalism will solve every issue. History begs to differ.
I never said free-market capitalism will solve every issue.
I am saying free-market capitalism could solve every issue, if the incentives (and regulations) are correct.
The most free market economy is the one that currently leads us in the really important things - space exploration, drug therapies, IT advancement, capital formation, etc.
Europe which is more regulated (and is seen as more socialist) barley leads in anything anymore.
Apart from Germany, the big economies have an unemployment rate of 15.3% to 7.3%
The are already at the maximum of taxing and spending (around 25-35% of GDP, before it gets 'bad').
Many people laude the Cuban Health System - A socialist system doing well? How foolish I must be to suggest part of the success is down to the free market! Well did you know Cuba competes via free market contracts (bidding) since the 1970s in providing medical/health services to the UN?
A interesting example is to look at Space.
George Bush jnr who embarked on illegal wars, decided to allow the free market into Space industry as part of his space commission who's suggestions included: NASA's relationship to the private sector must be transformed & A robust space industry is required.
One could probably claim that George Bush was neither moral or had high intelligence.
Yet SpaceX started in May 6, 2002. We will be going to Mars thanks to that decision.
And yet many people complained about this encroachment onto the free market.
The free market says the spoils go to the most efficient at providing service/goods - Launches used to cost $365M-$450M, now they cost $66M.
Another issue is pensions or social security.
We relied on moral and intelligent politicians to protect it.
Hence every social program is basically bankrupt.
Peter Theil suggest that the reason why the internet developed as quickly as it did, was the lack of Government regulation and control.
And we have had a major lack of advancement in most other areas due to regulation.
His essay/article https://www.nationalreview.com/2011/10/end-future-peter-thie…
was described as one of the most important in that year by a Nobel laureate (and not in lit).
I don't want to rely on "moral and intelligent" people to HOPEFULLY to develop and run a good system, because most people are certainly not that intelligent and very few are, when it comes down to it, that moral, especially if desperation sets in.
Give me a System where people will work hard for self interest and hopefully one with basic regulation and good incentives.
I am indeed happy to rely on that one to provide food and the other basic necessities of life.
Or I would rather rely on the System of capitalism, the only system that has lifted a billion people out of poverty.
Than the morals and intelligence of Chairman Mao or Stalin or Bush or Obama or any other leader.
@Ti-au: Capitalism did not lift a billion people out of poverty. That's a lie. It was technological advances which did so. Mao, Stalin, Pol Pot, Hitler, etc etc are just strawman. But they inversely prove my point; these were immoral people in power, which lead to bad outcomes. If you think the big corporations don't have any control in a free-market then you are sorely mistaken.
Apple could overnight (or within a year) make it so that their products cost much less AND they aren't built in sweatshops. Sure some people could lose their jobs, but that's a good thing, not all jobs should be saved. Low unemployment is spouted by the capitalist forever, but this isn't the bee's knees. You have to count what matters, good jobs for people's dignity as that's what matters. What you are doing is counting exploited people.
Space race?
That has a lot of issues today, as we don't have a proper traffic system for satellite orbits. Decommissioning old satellites. And having proper launch permissions. This isn't a state issue, it's an international one.
And funny you gloss over the fact that, the most rapid milestones in Space came from the federal market. As in the socialists (the Nazis) developed the early technology which was stolen by the Soviets and Americans. And both nations made huge strides in the Space Race by using national budgets, not privatised. What SpaceX has done so far shouldn't be diminished, but they did not reinvent the wheel. You don't really know what you're talking about. They reached for the low-hanging fruit, which is a decision that would be made by someone that is moral and intelligent (Elon Musk).
Also, you think Europe doesn't have a technological prowess? The first example would be the Rapid-mRNA-Vaccine technology, and how it works (especially for pandemics). A lot of progress does come from Northern-European countries, the ones that have social systems… but you wouldn't know it because the universities license these to, you guessed it, American companies. So on the surface it looks like USA is the tech powerhouse, but that's not true, they are the financial hub of the world. Geez.
People work hard for self-interest, that we know. I'm saying they work even harder when there is a control applied, and the fruits of their labour are objectively compared. For instance, in construction. You need regulations. You can't just rely on the free-market to solve all those issues for you.
The fact is you have to rely on morality and intelligence… that's what builds a good/working system. You cannot blindly rely on people's good-will, hence you cannot rely on capitalism alone, as it has an endgame of forming monopolies.
This is a catch22 and you know it.
This is a catch22 and you know it.
It is a catch22 - I'm just showing that banning property investments isn't the solution.
Renting also allows some to live where they might not be able to afford.
Because of the high property prices relative to income.
Those renters would probably own, if the house prices had the income relativity of circa pre-1980
Even the early 2000s had reasonable-ish prices too.
I have a house and at two later times, the houses on either side of it went for sale and I didn't buy them.
About 2003, house on one side sold for $385,000 (recently re-sold for $2mil). In 2003, I thought it was too much as I had just a year earlier or so bought a house for $255,000.
In 2008, the house on the other side sold for $880,000 (re-sold two years ago for $2.4mil).
Hindsight… If only….
Renting also allows some to live where they might not be able to afford.
Funny, as removing the huge demand for IP would mean people could be able to afford to live in areas like this as prices level off/drop.
That may happen, but also may not - A house value is only as much as someone is willing to pay for it. Removing investors doesn't automatically mean that house prices will drop. First time buyers still have to be financially sound to step into the market.
I recently sold one of my houses in a very desired location and the majority of the bidders were first time buyers such that 'they' drove the price up. The investors stopped bidding some $100,000 sooner/earlier - presumably return on investment ceased at that point. Four first time buyers ended up bidding against each other which drove the price up.
Two of the four bidders were already living (rented) in the area because they needed to for work/schooling - hence, my earlier comment.
Removing investors doesn't automatically mean that house prices will drop
Errr yes it does, its called supply/demand.
I recently sold one of my houses in a very desired location and the majority of the bidders were first time buyers such that 'they' drove the price up. The investors stopped bidding some $100,000 sooner/earlier - presumably return on investment ceased at that point. Four first time buyers ended up bidding against each other which drove the price up.
Again, supply and demand at play. Stock on the market is at record lows in lots of places. Mix in lots of FOMO, bidders are going crazy.
The 'investors' stopped bidding as they know what it is really worth, and know that those that overpay now will be struggling to get their money back in the short to med term.
@JimmyF: Removing investors doesn't doesn't automatically mean that there will be more houses on the market.
Supply/demand can still be impacted by simply having more 'first buyers' in an area, and/or less houses being listed.
I'd say that there's no point discussing this further though. You've got your opinion, I've got mine.
I've got mine.
Yes you certainly do have that view…. I've got my IP, screw everyone else who wants one!
Supply/demand can still be impacted by simply having more 'first buyers' in an area, and/or less houses being listed.
Somehow you see it as 'bad' that people want to own their own home, rather than rent it via a investor? Such a odd view to have.
@JimmyF: Another way of phrasing my earlier message then is that it's impractical to have any meaningful discussion about this issue using this forum.
I'm simply trying to end our discussion amicably.
@Porker: I have to agree with @Porker on this one.
Where I live in Sydney, forcing investors (10% of homes in my suburb?) to sell will meet the demand from out-right owners wanting to get into the area (no one's building new houses here, and no one wants to sell because housing deflates like bitcoin).
So for 6 months - 1 year, you'll get a short-term price drop of maybe $100K-200K from > $1M properties as @JimmyF predicts, but then in a year or two, you've just kicked out all the renters from my suburb, and supply will be low again. Having a suburb full of wealthy people only is a bad thing - city planning usually attempts to ensure diversity, and letting someone pay ~$500 pw to live in a >$1M home is how we get lower-ish income earners living in the area.
The only real solution is to incentivise developers to build upwards (no more land really), subdivide land more, or convince potential buyers that moving even further away from the CBD is OK (we're about 25kms beeline out from Sydney, and there are homes > $1M even 35kms out because they're making nicer looking areas with NBN, new shopping centres, artificial lakes, costco, bunnings, etc…).
@JimmyF: An investor buying a property doesn't affect demand in any way because they will rent it, it would only affect demand if they left it empty.
The demand is people needing a place to live, the supply is the houses - whose name is registered as the owner has no affect on demand or supply.
More human beings increases demand, building houses increases supply.
@JimmyF: It will drop in less desirable areas. People from less desirable areas will be flocking to the desirable areas. Keeping the price high in the desirable areas.
Besides housing prices, what will happen to the rental population, when there aren't any rentals available? Sure some will be able to move out to the less desirable areas and purchase property. What about the vulnerable people that can't afford to buy even in the least desirable areas?
I think we could consider a cap on how many investment properties an individual can buy. Or tax those that have them more ie. get rid of negative gearing.
In Victoria, there's land tax to curb this aspect.
Labor tried that and Australia voted against it.
I actually think it's more accurate to say that Labor tried it, and Queensland voted a bit against that, but mostly against the franking credit non-grandfathered changes (which managed to alarm a much higher proportion of people than it would have affected), plus Bill Shorten had all the electoral impact of a wet lettuce leaf. If Labor had just kept it simple: restricted negative gearing to only new builds for their first 20 years, and allowed a 5 year phase-out for current properties, and had someone less heavily associated with unions as their leader, and left franking credits alone, that would have a great chance of getting over the line.
@kanmen It's good to get diverse views, can we understand the economic and socioeconomic reasonings for the proposed change so we can understand the benefit and how it will be derived?
get rid of negative gearing- you'll find that - property investors will stop and sell their assets, limited rentals means that rent prices will soar pushing tenants out, also will cause house prices to ?come down, and most importantly banks to collapse and reduction in revenue from stamp duty. So yeh nah..
get rid of negative gearing- you'll find that - property investors will stop and sell their assets
This doesn’t even make sense. It’s such a general statement. I’m not going to try to explain to you how this works because I can’t be bothered. But say my property makes me loose about $3,000 a year. It’s value has gone up $200k. Even if I owned it for 10 years and lost $30,000 over that time. I still made money.
Gone are the days when you get 200k gains. And you'd be surprised a lot of investors are not making that much money.
Gone are the days when you get 200k gains.
I’m going to assume you are not from Sydney or you have never owned an investment property and are not very educated on the topic. Because most of Sydney literally went up $200k in the last 6 months during COVID. That is also the bottom end of town. Other places in Sydney have gone up WAY more.
Also on a long enough time scale all investors are making money.
@TheBilly: plenty of places that havent gone up that much- south western sydney, western sydney, outer sydney …or are all investors (even with 1 or 2 properties) meant to bow down so people can live right in inner sydney?
Also on a long time scale? Yes thats good..if not why would anyone be investing in property then?
If the only reason they can afford their properties is negative gearing then it was not a great investment to begin with.
The vast majority of investors own 1 ip.
Many times from an inheritance (meaning no mortgage); hence the property might not even be making a loss.
Additionally as the tax rate falls, negative gearing becomes less and less valuable….
Getting rid of negative gearing is a solid idea. But some of the mess we're in is due to the way we make it harder for single entities to invest, retain control and let new high-density housing developments such as superfunds or commercial entities. Other countries that do this often find they are better landlords. Some discussion here:
https://www.abc.net.au/radionational/programs/the-economists…
Housing policy is difficult. But the worst part is realising no matter how good your ideas, they'll never get implemented.
The right way to deal with it would be to replace stamp duty with a tax paid on the existing value of all properties owned/mortgaged. So if you already own a single $500k property, the next property you purchase would be taxed as a percentage of the value of existing property you own (with some kind of language to avoid a loophole where you buy the cheaper one first). If you own two - say a 500k and a 700k property, and you're going to buy your third as an investment, say it's 400k, then you'd be taxed on a percentage of 1200k of the first two properties you already own.
This would effectively mean stamp duty can be done away with, and makes property far more affordable to those who want only a property for their own living.
I think negative gearing is ok but its the combination of the negative gearing and the 50% CGT discount that makes IP very attractive to speculators. Get rid of the 50% CGT discount and that should dissuade a lot of speculators from the market as its the capital growth that makes it attractive, not so much the rental return.
Here's the thing, though—50% CGT discount was introduced to encourage people to hang onto their assets a little longer, thus preventing overheating in the market with constant buying/selling.
50% discount applies to all assets held for 12 months.
Also it was introduced to replace inflation component when calculating capital gains.
All states (the rules vary) have land tax for people that own multiple properties. So this already exist
haters gonna hate.
Good on you for working hard and building up a property portfolio.
Didn't neg, but nice humblebrag.
Also, don't make it sound like you are doing the community a service, by renting your 7 properties out.
Unless you are sheltering the homeless for free, you are buying properties to rent out for money, plain and simple.
Arrghh late night sarcasm reply to a ridiculous post.. couldn't help myself
Lol so you expect people to do this for free….you expect your butcher, your local woolies, fruit shop to give goods out for free?
This is just a business- and indirectly you are giving people places to live.
The point is mate that it shouldn't be a business. We as a society shouldn't allow it to be one, its toxic and directly hurts almost every single person and industry in this country. Buying and hoarding peoples security, and renting it back out to them is as mortally evil as buying up all the water or electricity or petrol and selling it back. And It hurts our society in so many ways, and not just the impact it has on the disadvantaged. Even the middle and upper class miss out indirectly, so much innovation and growth wasted because our population has all its capital sunk into a ever increasing property ladder.
People here who have bought in with massive debt are going to say whatever they can to make sure that they're not the ones left holding the bag, but find me a collection of outside observers that will agree that house prices being 1800% of a full median wage is at all appropriate.
@tarb: The USSR tried socialism. It didn't work. The DDR tried it too. They also failed.
Capitalism is the only social structure that works.
@rektrading: @rektrading And whats that got to do with anything? This brain dead US centric 'hurr durr communism/socialism' rhetoric is absolutely embarrassing.
@rektrading: @rektrading Singapore one of the most capitalist cities in the world has social housing for 90% of its population.
I don't think owning land should be a business for private investors to squeeze as much money out of the lowest paid people in the country. We accept it because historically it's normal. Singapore was created recently and decided to not just follow the historic path.
@dmac: S'porean can own one HDB and a private unit or they can buy an unlimited number of private units.
They are not allowed to own two HDB and have to sell one of them if they inherit the second one.
Their system isn't much different other than owning vertical real estate.
@rektrading: You suggested that social housing = socialism and therefore it would fail. Singapore is a great example of that not = reality.
90% of people living in social housing is very different to our system because the 90% aren't subjected to housing pricing crisis' that divide generations.
I don't care how expensive the top 10% of houses are (Singapore), I care about the average housing prices (Australia). If we want Australians to raise healthy children and adults, starting a family in precarious financial situation can cause long term consequences on brain development through chronic stress.
@tarb: So you're saying water should be free… food should not be a business, etc
Well ppl have spent massive debts…well why not buy a small place or move out etc. You don't have to always buy that mansion or that new car /phone. How do you think investors get their money? They save.
@funnysht: That's not what I said at all. We have regulated markets in this country and residential property should be another one of them.
We need to flatten house prices, or slightly decline them, so over the next decade or so they become more affordable and less of a time bomb waiting to go off should the interest rate rise to non-record braking lows.
Also the idea that all investors are cute little mum&pops or new immigrants working their butts off and not generational wealth being more and more concentrated into fewer and fewer hands.
But again as I originally said "People here who have bought in with massive debt are going to say whatever they can to make sure that they're not the ones left holding the bag", I know why you guys think the way you think, you don't have the best interests of this country or future generations in mind, only the fact that you're currently 'holding the bag'; which is totally understandable.
@funnysht: Things that are not investment are not automatically free. You still need to pay for them. The difference is the prices are not increased by greedy hoarders. The price would be dictated by operating costs rather than chasing profits.
Don't know if you were replying to me, but if you were..
I don't give a flying rats ass how people make their money.
My point is to not make it sound like he's doing the community a service.
Of course, Archi clarified later that he was being sarcastic, which didn't translate too well on written medium.
I've always found OzB odd that people put so much energy hating on scalpers on GPU, PS5s etc
And yet calmly people give each other pats on the back and free advice as to how you would go about leveraging yourself to reduce housing supply in the market.
A sick twisted world if you ask me.
A sick twisted world if you ask me.
AUstralia quite bad at this. Not the whole world.
So many public officials are use to comfortable high paying jobs and can afford to buy multiple properties. They vote for the party that will benefit the richest while they get some of the scraps like an investment property while a sizeable chunk of the population get nothing.
I've always found OzB odd that people put so much energy hating on scalpers on GPU, PS5s etc
At the same time buying up big and asking for ways to leverage rebates/referrals or complaining that specials are now sold out.
How dare someone else got a deal that I missed.
I know right? It's so contradictory. Somehow the world is so unfair when it comes to scalpers yet it's fair when it comes to property investing. I mean, it's possible the same people who complain about scalpers don't comment on the forums in regard to property investing and vice versa but from what I've seen on here is generally property investing = good, scalping = bad. Somehow the notion of a dog eat dog world is fine when it comes to property investing but not if people don't get their bargain.
But no one's renting out GPU / PS5s - that's perfect right?
You got rid of all the investors!!!
(although microsoft / amazon want to do cloud gaming… so I suppose that's renting).
I joke, but I feel that's where Sydney is headed - it's not a bad thing, it's just a mindset thing - for some reason we stole the American dream of having to 'own' your own home. What if the government owned it all and we all got free accommodation? Well communist manifesto makes a point of this, but ONLY if we could make every area equivalent to live in - how can you even achieve that?
China has '99 year leases' from government, but that means eff all, because people are paying to 'swap' accommodation in more desirable areas… no difference at the end of the day (several million AUD for apartments in affluent areas) and it's already worse than Sydney.
Should We Ban House Property Investors in Australia?
Why stop there, ban all investments and teach about Karl Marx in all primary schools !!!
Upvoted. Great idea jv! Let's get behind this people.
Poor Engels, overlooked again
What we need is some sort of revolution, like a cultural one.
Red hot property market is not a unique Australia problem. Just look over to New Zealand, America and pretty much everywhere else in the world.
In NZ, they introduce new bright line tax for investor, remove negative gearing, introduce LVR and the market is still going crazy. Only the talk of rising interest rate curbs the price rise a little bit.
The root cause must be fixed. Banning investor won't work.
Alot of overseas billionaires are snapping up NZ land as it's considered a prime location to ride out the inevitable societal disruption/collapse that'll occur in the coming decades as the climate continues to deteriorate. So I don't think investment there will slow no matter what.
The root cause being…?
I guess when it comes down to it, it would be population growth (+ 90s babies moving out of home) outpacing new dwellings?
Well you guessed wrong. It's (surprise) property investors. I'd link articles but there's legitimate too many to chose from, including the op's.
banning investors will at least take some steps towards levelling an absolutely broken playing field, let alone removing all of the incentives that exist for investors that make properties an almost risk free investment at the cost of an ever ballooning and exclusionary market.
Overpopulation ~ that's why they brought covid in
True it's going nuts in NZ, a significantly higher median house price than Australia with significantly lower average incomes. If I was a young New Zealander I'd be looking to move to Australia.
And yeh it's a global problem. UK, USA and Japan are still a lot cheaper (median house price) than over here though.
communism here we come ffs
I like community. I also like society, in socialism
@jrowls: Negative gearing has it's issues but a lot of people flat out ignore the benefits. For example there are benefits to renting. Yes when you rent you have less security over how long you can live there, but you also get the benefit of living somewhere where you may not be able to afford a loan or the repayments on, you also don't need to a deposit or to tie up that kind of capital just for a place to live, you're also not responsible for maintenance or other related property expenses which can be significant, when you leave you don't have to pay an agent 2% the value of the property or when you move in you don't have to pay thousands in stamps.
Removing negative gearing won't make those desirable places cheaper to buy, they are desirable for a reason. Lots of people want to live there. The pricing will still be high with or without the investor market.
The way people talk you'd think they expect when you claim a loss on a rental property the gov gives you the money back? You get a reduction in your taxable income, If you are in the 30% tax bracket, you get 30c back for every $1 you lose, you still lose 70c! And no most investors are not in the top tax band.
The reduction from negative gearing allows the investor to offer a property for rent at a rate that they would not be able to otherwise. It does benefit both parties.
Owning your house isn't for everyone and unless you want to remove stamps and limit commissions on sales it is completely unreasonable to expect everyone to buy the house they live in.