How to Stop Wealth Gap Growth (Real Estate)?

donkeydoc on 22/07/2022 - 12:30

With impending collapse of property markets, maybe 40% in 5 years time, how can we stop investors from buying up homes of the least fortunate defaulting home 'owners'? Would be a terrible outcome if wealthy investors expand their property portfolio, say from 15 homes to 25. What policies can help those that lose their homes to re enter at a fairer price?

There is a housing crisis and markets haven't behaved freely for the last 30 years. There needs to be a ban on residential property purchasing for anyone with $2M assets in real estate for the next 10 years. Capital gains and negative gearing are a joke.

Financial

Comments

    • serpserpserp on 25/07/2022 - 22:48

      It's funny how people equate a dip after rampant run away growth for years on end is a start of a "collapse"!

  • MessyG on 25/07/2022 - 20:49
    +2

    Easy. Regulate the number of properties a person can own. Or, regulate that after every second property, they have to charge a fixed rental price to keep rental prices down. Housing is an essential service, the way that it's been allowed to be exploited is disgusting.

    • xavster on 25/07/2022 - 22:47

      This is an actual government policy!

      You're allowed max 2 properties, the second one must be bought with 40%+ in cash.

      10 points for anyone who can guess the Country, bonus points for guessing the City!

      answer might surprise you!

      • donkeydoc on 25/07/2022 - 23:33

        China?

        • xavster on 26/07/2022 - 09:56

          Correct!

      • Cluster on 26/07/2022 - 10:46

        China is not a good example of regulation. They have a massively overheated housing market, and now people are beginning to refuse to pay mortgages on unfinished properties. Those properties cannot be finished without the payments.

        It's also a place where couples divorce so they can buy one property each instead of one per couple. How many people get divorced in Australia just so they can buy a property?

    • OBEY YOUR MASTERS on 26/07/2022 - 10:11

      Should we ban foreign ownership as well? The way that's been exploited is disgusting.

      • kokita on 26/07/2022 - 10:57

        Countries that ban foreign ownership are still facing property price increase.

  • serpserpserp on 25/07/2022 - 22:46

    Down 40% in 5 years lol

  • ozpaisa on 26/07/2022 - 04:54
    +2

    40% drop over the next 5 years from the peak may happen, but even if that happens it is not as bad as people think it is.

    Most places in Melbourne or Sydney, that just means property Price in 2027 will be similar to what it was in 2015-16. That is not end of the world.

    Only those who bought in the last 2-3 years and if they are forced to sell, will be worse off .

  • kokita on 26/07/2022 - 10:54

    All roads lead to property price increase. Some strategies can decrease the property price but later the price will go up again.
    So, the only way is to jump into the property ladder asap. Find an area that you can afford. Good luck!

  • xdigger on 26/07/2022 - 12:39

    I personally don't think we should be raising personal income taxes for everyday Australians as a means to reduce the wealth gap. Instead we should be taxing wealth measured in the hundreds of millions, and taxing more of mining billionaires like Gina Rinehart.

    Already young brilliant Aussies who will otherwise be taxed at the highest personal income bracket are moving overseas and contributing to foreign economies like US/Europe/Singapore/Hong Kong. As it is we are already a mining dominant economy and losing local born talents does not bode us well in a transition to a green energy/manufacturing economy.

  • [Deactivated] on 26/07/2022 - 13:51

    and taxing more of mining billionaires like Gina Rinehart.

    Which destroys the desire and ability to start businesses… which means less jobs… which means more people on welfare and government creating even more pointless public service jobs to make the unemployment figure seem smaller… which tax payers have to fund… so everyone's tax rates have to increase. ;-D

    Every time government interferes with property (or our lives) it makes things worse. We need less government interference, and less government, so taxes can fall, so we can $AVE, which means it won't matter how high property prices go… everyone who is frugal, makes sacrifices to save, can buy one eventually.

  • wimphrel on 26/07/2022 - 14:13
    +2

    You can make it so that investment in property is unfavourable:

    Reduce land tax thresholds and raise land tax for investors only, so that it wipes out rental income and puts people into yearly-loss mode.
    This is in fact what stops a fair bit of low-risk property investors from accumulating property in a single state, although I'm sure there are loopholes.

    Just want to be careful you maintain a good balance of rental accomodation across all areas. (Government regulated rental housing may be needed).
    You want a diverse demographic - cleaners and dishwashers should have fair access to an area without having to fork out a $100-200K deposit.

    Unfortunately when people complain about wanting to afford a home…. they actually want one in a nice area that everyone else also wants.
    This doesn't scale well & unfortunately if you remove investors entirely it will still end up a shit fight between those who have the most money.

    i.e. property in outer Brisbane is quite cheap - I could literally buy 3-4 nice houses over there for the price of 1 in Sydney with the same distance from the central CBD. But I take it most people are wanting to stay in Melbourne / Sydney areas?

    • kokita on 26/07/2022 - 14:41

      Totally agree with you. If everyone wants to live in Bondi, it is impossible with the available land vs total demand.
      Then another case, as you mentioned, there are actually affordable options in Brisbane (~ $500k houses).

  • sixthirty on 26/07/2022 - 14:19
    +1

    Remove Stamp Duty for First Home Buyers.
    Scrap the First Home Buyer Grant

    There also needs to be inheritance laws looked into. Just from people I know I can see people who all earn similar incomes ending up miles apart due to some peoples parents having huge nest eggs to hand down, and some with poor parents.

    The gap will grow.

Login or Join to leave a comment
Login Join