What Is Wealth Hoarding? What Does It Mean?

bargain huntress on 30/06/2023 - 16:15

It's something I keep seeing and hearing complained about. Including on ozb sometimes.

Often by millennials or younger. Often aimed at baby boomers.

I am a millennial and in a bad financial and life situation. But I don't get it because:

Didn't the people who are now retiring mostly earn their money?

I understand part of it comes from real estate gains that are harder to get now. But isn't that luck?

What is it the boomers should actually be doing according to the people complaining?

That's what I don't understand.

Financial

Comments

nubix on 30/06/2023 - 16:19

+109

First thing that comes to mind is receiving free tertiary education and voting against any policies that create better access to the same thing.
- jv on 30/06/2023 - 17:22
  
  +14
  
  Wasn't it Bob Hawke that abolished free tertiary education?
  - bargain huntress on 30/06/2023 - 19:04 Comment score below threshold.
    - jv on 30/06/2023 - 19:05
      
      +35
      
      I thought Whitlam was the one who first made it free ?
    - try2bhelpful on 30/06/2023 - 19:33
      
      +34
      
      Whitlam brought it in. Hawke was the one who started to dismantle it.
      - bargain huntress on 30/06/2023 - 20:37
        
        +16
        
        @try2bhelpful: Oh i read it again and you are both correct sorry.
        
        try2bhelpful on 30/06/2023 - 23:17
        
        +11
        
        @bargain huntress: No probs. It is worth looking at what Whitlam achieved. He was a great man. I think his real problem was he tried to do too much too quickly. He got a tad ahead of the electorate at that time. However, we have lasting benefits today.
        
        SolitaryMan on 01/07/2023 - 14:32
        
        +6
        
        @try2bhelpful: Yeah, that was not his real problem. Tried to do a lot of positive things, but his entire government was totally incompetent, and a large part of it was incredibly corrupt.
        
        Griffindinho on 02/07/2023 - 01:59
        
        +1
        
        @SolitaryMan: Trying to get loans to nationalise the mining companies. Haha.
        
        try2bhelpful on 02/07/2023 - 10:12
        
        +6
        
        @SolitaryMan: Given today’s standards of poor behaviour, and incompetence, he was a shining example of good. I suggest you do some Googling. There were a lot of good, and ultimately, lasting improvements he brought to the country.
        
        resisting the urge on 04/07/2023 - 16:21
        
        -1
        
        @SolitaryMan: And compared to the UK's fine record of upstanding government representation for its citizens, how well our elected reps have done. Even those we think were well intentioned. For amidst wave after wave of UK sex scandals, continuous corruption, and leaks to the 'enemy' (it isn't that long since certain Royals (Duke of Windsor, and friends) attempted to do secret deals with Hitler during the onset of WWII, the KGB after that), and entities such as the Rothschilds' domination of global credit and money supply.
        
        All after a truly exemplary history of colonialisation; where the old country took egregious cultural exploitation to new depths, and in the process created markets for ~~tea~~ opiates, timber, slaves, gold and nearly every natural resource we use today, resulting in the over-exploitation of every resource of value on the planet. Plus all that goes with that- institutionalised corruption of ministers, finance, regulators, multinationals, all donating to, and sacking governments, manipulating elections, selecting entities to be given donations or other kinds support 'encouragement' (money, resources, military assets, tech, true and false intelligence, etc.), any one of which covered by threats to expose collected kompromat, etc.
        
        Enabling everything from the theft of precious metals and stones, and the abuse of coal, oil and gas deposits across the planet (Timor Leste, PNG, Chile, Africa, to name but a few).
        
        All in the name of Her Majesty's goverment (and later, outsourced to controlled colonies ~~democracies~~,such as Australia).
        
        A fine record of integrity upon which we still try to raise ourselves now, climbing on the shoulders of giants wallowing in polluted, deep ocean outfalls. A record which even totalitarian others can rightly point to as proof we are complicit with the actions of powerful entities lacking any integrity who act secretly against the interests of all but their numerous offshore accounts within which everything plundered over hundreds of years lies as nothing but a testament to hoarding as the one thing that mattered before the same humans continue to burn everything that remains.
        
        A fine mess for the next gens to fix (after they've paid ~~our~~ their debts), whilst they enjoy the peace and quiet of their shared rentals. And all those hours of spare time after finishing the 3rd gig work job of the day, or as a means to a bright and long retirement, joining the long term unemployed.
        
        the wiz on 05/07/2023 - 15:46
        
        @try2bhelpful: Trying to alter the constitution to give the government total control over prices and incomes isn't just getting a tad ahead of the electorate.
        
        We'd be like North Korea if Whitlam had gotten away with that. He might have had some good ideas, but he nearly destroyed Australia.
  - payless69 on 03/07/2023 - 07:16
    
    Then a woman introduced ROBODEBT!
    True Comradine? If there is such an expression?
    - Name on 04/07/2023 - 08:53
      
      +4
      
      Being a woman has nothing to do with it.
- Almost Banned on 30/06/2023 - 21:50 Comment score below threshold.
  - ozbjunkie on 01/07/2023 - 08:30
    
    +17
    
    But what about the avo nonsense?
    - Speckled Jim on 01/07/2023 - 12:14
      
      +2
      
      The "avo nonsense" is a funny touchstone, but there's real validity to it, and this is coming from an X-er.
      
      You can't really knock the nutritional value of avo, the fats are of the "good" variety. A bit of seasoning and it's better for you than most of the peanut butter (using hydrolised fats and mostly high sodium), yeast extracts like Vegemite (sodium again) or sweet spreads like Nutella with their crazy sugar hit.
      
      I say let them have this one, it's sound. Someone should set up a Snopes page for it.
      - nobro25 on 02/07/2023 - 11:13
        
        +3
        
        @Speckled Jim: I don't think it's about the nutritional value of avos rather the financial problem. Like really, two toast with an egg and avo is like $16. Add a drink is like $18.
        
        Vanceer on 02/07/2023 - 13:13
        
        +2
        
        @nobro25: Since boomers are hoarding all the money, someone has to keep the economy and businesses afloat!
        
        Speckled Jim on 02/07/2023 - 14:31
        
        +3
        
        @nobro25: Ah, didn't factor that in. We home-make everything.
    - Some Human on 02/07/2023 - 14:51
      
      +4
      
      The avo thing is a metaphor for all the reckless spending the young folk do.
      - outlander on 03/07/2023 - 15:40
        
        +2
        
        @Some Human: Yes, I too hate the young and their reckless desire to.. (looks down) eat food
        
        Name on 04/07/2023 - 08:59
        
        +7
        
        @outlander: Hah yeh. I saw a meme the other day…. I'll try to paraphrase.
        
        Home made avo on toast is around $2 a day, by foregoing the avo on toast you'll save about $7k after 10 years. Which is enough to buy nothing. So enjoy your avo on toast.
        
        I know it's a metaphor for reckless spending but in reality a lot of youth just don't earn enough to buy a home and can't save at a rate fast enough to offset house price rises so they may as well enjoy life with reckless spending instead.
        
        Speckled Jim on 05/07/2023 - 08:38
        
        @Name: I'm with you. It's a modest indulgence. If anything, I'd be pissed at the opportunistic gougers that pushed it out of reach for some people. Then again, those people should be making their own to save the bucks, but who am I to deprive them of a whinge?
        
        Personally, I'd much rather this viral food trend than the deep-fried lucky dips so popular elsewhere!
  - sackrace on 02/07/2023 - 15:45
    
    +8
    
    Spot the boomer
    - Almost Banned on 02/07/2023 - 17:10
      
      +2
      
      If a boomer has earned their wealth, they are entitled to choose what to do with it.
      They can spend it on world travel, they could coat themselves in gold, or they could build a vault and fill it with gold coins and swim in it a la Scrooge McDuck.
      The word 'hoarding' suggests disapproval or something improper or shameful. If its your money, honestly earned, everyone else can shut the hell up and mind their own business.
      And I am not even remotely a boomer myself. Gen X rules!
      - nujee on 03/07/2023 - 20:30
        
        +4
        
        @Almost Banned: LOL you can see the pitchforks being sharpened with the downvotes. All you have said is if someone has earned it, they get to keep it and look at the reaction. This is what is wrong with this country- the tall poppy syndrome is embedded.
      - burns13 on 04/07/2023 - 00:21
        
        +11
        
        @Almost Banned: Think the complaints are directed at the wealthy older gen that vote for conservative policies in favour of protecting their wealth and disregarding the issues facing young people. "Screw you I got mine" attitude while having the best of both worlds in their lifetime.
        
        Almost Banned on 04/07/2023 - 11:10
        
        -6
        
        @burns13: Interesting thought.
        The only way I can think of that this would be relevant to 'wealth hoarding' would be a policy for 'wealth disgorgement' - or legalised theft.
        Is that what you are suggesting?
        Precisely what policies are you advocating?
        
        Speckled Jim on 05/07/2023 - 08:46
        
        -2
        
        @Almost Banned:
        
        And I am not even remotely a boomer myself. Gen X rules!
        
        As Gen-Xers, our parents are Boomers, thus our defensive position.
        After all, what's theirs is (soon) ours.
      - Speckled Jim on 11/07/2023 - 20:45
        
        @Almost Banned:
        
        they could build a vault and fill it with gold coins and swim in it a la Scrooge McDuck.
        
        Better late than never.
        https://imgur.com/72LVv55
- gromit on 01/07/2023 - 11:13 Comment score below threshold.
- dtc on 01/07/2023 - 12:41
  
  +24
  
  I know this is a meme but go and look how many boomers actually received tertiary education- in the 1970s less than 5% of people had a tertiary degree and for most of the time it was less than 3% (Whitlam funded a lot of extra places). Today it’s over 30%
  
  So hate the boomers for this but you are hating 95% of people for something they didn’t actually take advantage of.
  - greatlamp on 01/07/2023 - 14:55
    
    +32
    
    True, however you also didn't need a tertiary education either. There are people retiring from their 6 figure banking jobs that never went to university while new graduates are entering with masters degrees.
    - Chandler on 03/07/2023 - 12:01
      
      -7
      
      Perfect example of hate the game not the player.
      
      The problem we've got is that the long-term players and coaches are the ones writing the rules and playing umpire.
      - sim777 on 04/07/2023 - 14:47
        
        +1
        
        @Chandler: Dont hate the game, hate yourself
        
        Chandler on 04/07/2023 - 17:20
        
        @sim777: And why do you say that?
    - Name on 04/07/2023 - 09:01
      
      +2
      
      Exactly. And you can also earn 6 figures without a degree today too. Just pick up a trade job and work hard.
    - CommuterPolluter on 05/07/2023 - 23:02
      
      +1
      
      Blame it on Rudd. He’s the one who felt embarrassed at G20 so decided everybody needed to go drop $50k on an office job qualification.
      - greatlamp on 06/07/2023 - 13:32
        
        +1
        
        @CommuterPolluter: The government target was for 40% of the population to have a degree. I guess the idea was that a whole industry of STEM jobs would open up once we had a highly educated workforce.
        
        Unfortunately that isn't how it works, Australia remains a backwater, the only 'science and technology' jobs are in sales or regulation (i.e. the stuff that can't be outsourced) - both which do not actually require any technical understanding beyond what you can pick up on the job.
- bawdygeorge on 01/07/2023 - 14:30
  
  How many of these boomers actually received a free tertiary education?
  - Almost Banned on 18/07/2023 - 17:46
    
    Apparently, according to McCrindle, about 1 in 5 Boomers have a University degree. Not sure if they all got them when it was free…
- netjock on 03/07/2023 - 09:12
  
  But then I am suppose to be an early millennial and I have the same net worth as my parents in their late 60s and they are still working
  
  That is after paying HECS.
- 811b11e8 on 03/07/2023 - 11:27
  
  This is the most stupid argument.
  
  When free, 15% of the 19-year-old population went to UNI.
  
  It's now over 50% of the 19-year-old population.
  
  It's much higher if you count all the people taking a "gap-year" now.
  
  University education is more accessible than ever, and you want the people who don't go to subsidize others going more than they currently do?
  
  It's mind-blowing that people in Australia complain about UNI not being free.
  - rainynight65 on 03/07/2023 - 14:29
    
    +11
    
    When tertiary education was free, you didn't need a degree for the majority of career paths. It's a bit different these days. And where there's high demand, there's profiteering. And the mechanisms that make university education accessible, such as HECS, student loans etc., are more often than not predatory debt traps.
    - ddilrat on 03/07/2023 - 22:19
      
      How's it predatory? Can you elaborate.
      
      I was quite okay with mine. Much lower rates than any predatory financial institution would offer
    - larndis on 04/07/2023 - 11:04
      
      +1
      
      @rainynight65
      
      So the government is the predator here, right? What exactly to you believe their motivation is? Running this massive, hugely expensive, complex scheme just to 'trick' people into going to uni? Then sit back and watch the repayments trickle in for decades, how cunning!!
      - jazinger23 on 04/07/2023 - 22:09
        
        @larndis: Must have been predatory for ddilrat because they asked for the money to be repaid.
    - R4 on 04/07/2023 - 15:42
      
      Plenty of careers don't need a degree.
      
      Two that I know of and/or been involved in:
      A trade apprenticeship gets you paid while you're learning and when you're finished and have some experience, you'll earn more than most graduates.
      Pilot. Expensive to achieve but no degree required, just common sense. Again, get some good experience and you can earn a really high income.
      - the wiz on 05/07/2023 - 15:59
        
        @R4: Pilot? Uni is cheaper and you don't need to rely on nepotism or luck.
        
        Unless I owned an airline I'd sooner advise my kids to smuggle heroin.
  - CommuterPolluter on 05/07/2023 - 23:05
    
    University degrees shouldn’t be free but uncapping places for degrees was an unmitigated disaster. It’s embarrassing talking about University with my bosses at work because of how far the standards have dropped since they went.
    - john71 on 06/07/2023 - 08:58
      
      What objective evidence can you offer us indicating that standards have dropped at Australian universities? Last I heard, several Aussie unis were ranked among the best in the world.
holdenmg on 30/06/2023 - 16:19

+14

Hoarding is a large board in a public place, used to display advertisements.

Wealth Hoarding could be a Sign for any of the Big 4 Banks (or Macquarie).
Jimothy Wongingtons on 30/06/2023 - 16:24

+60

**** negative gearing is all i can say :)
- Duckie2hh on 30/06/2023 - 16:28
  
  +7
  
  Business expenses are also deducted from profits before tax is applied. What's your point?
  - Drakesy on 30/06/2023 - 16:36
    
    +54
    
    Taxpayers are subsidising the poor gambling choices of investors.
    
    At least businesses aren't in the position where they can purchase huge amounts of property and control the market through pricing which is what's happening at the moment. (i mean they can but the watchdog prohibits this).
    
    If i buy a lotto ticket and lose should i be allowed to claim back a portion of it?
    - randomusername2017 on 30/06/2023 - 17:17
      
      +4
      
      If i buy a lotto ticket and lose should i be allowed to claim back a portion of it?
      
      💯 but only if you reinvest it another lotto ticket.
    - tsunamisurfer on 30/06/2023 - 17:42
      
      +9
      
      Taxpayers are subsidising the poor gambling choices of investors.
      
      There is no such subsidy.
      
      Investors are getting nothing from the government. They are getting back 40c of their own money for every $1 they lose.
      
      At least businesses aren't in the position where they can purchase huge amounts of property and control the market through pricing which is what's happening at the moment. (i mean they can but the watchdog prohibits this).
      
      There are very few individuals that own 'huge' amounts of property, the biggest cohort of investors and mum and dad investors with predominantly one sometimes 2 properties.
      
      If i buy a lotto ticket and lose should i be allowed to claim back a portion of it?
      
      I shouldn't have to explain to a homo sapien the difference between a lotto ticket and a real estate investment.
      - Drakesy on 30/06/2023 - 17:54
        
        +35
        
        @tsunamisurfer:
        
        Investors are getting nothing from the government. They are getting back 40c of their own money for every $1 they lose.
        
        *40c of their money they'd otherwise be paying in tax - hence it's a subsidy as the government/taxpayer is penalised
        
        There are very few individuals that own 'huge' amounts of property, the biggest cohort of investors and mum and dad investors with predominantly one sometimes 2 properties.
        
        Still multiple properties for individuals skews the supply significantly, renters paying off mortgages of those that are better off doesn't exactly fill me with hope let alone a tax system that incentivises it.
        
        I shouldn't have to explain to a homo sapien the difference between a lotto ticket and a real estate investment.
        
        Both are investments are they not? America taxes lotto winnings as income.
        
        Almost Banned on 30/06/2023 - 21:49
        
        +5
        
        @Drakesy: It is not a penalty to let people keep a little more of their own money.
        Australia does not tax lotto winnings - principally because they also do not permit deductions for lottery purchases.
      - nigel deborah on 02/07/2023 - 08:22
        
        +6
        
        @tsunamisurfer: Except that negative gearing allows you to deduct 'expenses' that are never going to be incurred by the investor, such as depreciation on the value of a newly built house. The investor will very likely sell before the house is anywhere near needing to be replaced, and in the meantime may have claimed the entire build cost as a tax deduction, meanwhile the property as a whole has likely to have appreciated significantly.
        
        Plus, those deductions can be made against the landlord's personal income, not just the income of the house. Definitely not 'fair' when compared to other investments and is a significant contributor to the massive house price increases we've seen.
        
        Nobody informed is complaining about real expenses being deducted from rental income.
        
        spal on 03/07/2023 - 08:53
        
        +2
        
        @nigel deborah: Not sure if you know this, but if the expenses like depreciation were not allowed to be deducted periodically, these will remain as part of the cost base and people will pay less capital gains tax. Having these provisions essentially support the renters too. It is cheaper to rent in Australia than to own a home and pay for all expenses associated with the costs of owning a property.
        
        kyle on 03/07/2023 - 22:37
        
        +1
        
        @nigel deborah: You do realise any capital works claimed as deductions reduce your cost base, right?
      - ddilrat on 03/07/2023 - 22:21
        
        +1
        
        @tsunamisurfer: I guess people don't like the fact you're not really losing if you make a "loss" for 10 years then sell with a nice capital gain
      - john71 on 06/07/2023 - 09:01
        
        @tsunamisurfer: Mostly good points, aside from your notion that ‘homo sapien’ is a singular.
    - spc12go on 30/06/2023 - 21:20
      
      +5
      
      thats what construction companies are doing. They buy up large amount of land, and slowly release them back into the market. By artificially controlling the release rate and keeping the price and demand high.
      - dtc on 01/07/2023 - 12:45
        
        +1
        
        @spc12go: Say you are a medium construction company and you build 100 homes a year
        
        How do you manage to get those 100 blocks just as you need them? You can’t, all you can do is buy up blocks when they are available and then build on them when you are able. Your supply pipeline probably requires you to buy land at least 18+ months in advance. Unless the value of the land is increasing faster than the cost of holding the land, there is no financial advantage in land banking
    - brad1-8tsi on 30/06/2023 - 22:10
      
      +5
      
      At least businesses aren't in the position where they can purchase huge amounts of property and control the market through pricing
      
      That's exactly what happens.
      A huge part of Harvey Norman is a property play.
      Brickworks and Boral both landbank vast tracts of land and release to the market at their own pace in order to keep prices high.
      Listed property trusts own vast amounts of land and buildings.
      The Leppington Pastoral Company is a property development company masquerading as a dairy farmer.
      - ihbh on 01/07/2023 - 11:08
        
        @brad1-8tsi: Not to mention garden centres such as Flower Power. Eden Gardens will redeveloped soon.
    - TheDolphin on 01/07/2023 - 08:02
      
      No, but if you win lotto you don't pay any tax either. Bad example.
    - larndis on 01/07/2023 - 08:18
      
      +1
      
      @Drakesy Opening a business is a MUCH bigger gamble than purchasing a property
    - Duckie2hh on 01/07/2023 - 09:22
      
      +4
      
      There's no subsidising. Everyone seems to conveniently forget that when you sell said investment property, all the negative gearing on that property is added back and thus you end up paying more CGT….
      
      Tattslotto is classed as gambling, not a business.
      - gromit on 01/07/2023 - 11:20
        
        +2
        
        @Duckie2hh:
        
        There's no subsidising. Everyone seems to conveniently forget that when you sell said investment property, all the negative gearing on that property is added back and thus you end up paying more CGT….
        
        exactly, people seem to think it is just free money, it does allow you to move some of those costs forward but you aren't getting off from the tax burden in the long run. It is nice and benefical, but without it all it would do is make investment properties beneficial only to those tthat can afford to carry those costs early in the life of the investment, i.e. it would benefit the rich at the cost of the mum and dad investors.
        
        Duckie2hh on 01/07/2023 - 12:37
        
        +1
        
        @gromit: Correct.
        
        The first thing to happen with the removal of negative gearing would be some distressed sales, followed by double to triple fold inrease in rent.
        
        greatlamp on 01/07/2023 - 15:00
        
        +1
        
        @Duckie2hh: How would rent increase? Landlords have an incentive to charge as much rent as possible. After the change, landlords have the same incentive to charge as much as possible.
        
        30 years of evidence shows that rent does not increase with increasing property prices, it tracks inflation.
        
        What will happen is that property prices will decrease until the rental yield is high enough that it makes up for the yield that previously came from tax incentives. There is a vested interest is keeping property prices high and spreading this false scenario where renters would be worse off if property was not an attractive investment.
        
        gromit on 01/07/2023 - 16:40
        
        +2
        
        @greatlamp: After the change you would see a contraction in rental availability, similar to what happened in the 80's when Labor thought it might be a good idea to get rid of negative gearing and had to quickly backtrack as rental prices quickly accelerated.
        
        greatlamp on 01/07/2023 - 19:12
        
        @gromit: Yes there would be some contraction in rental availability AND investment properties would be sold off and house prices will fall. Following that a proportion of renters will buy their own home.
        
        Instead of spending billions of tax dollars on tax deductions for investors, spend money on support for renters during the transition period.
        
        gromit on 01/07/2023 - 21:55
        
        +1
        
        @greatlamp: no house prices won't fall as the new build market will take a hit so supply constraint will keep prices high.
        
        greatlamp on 02/07/2023 - 10:49
        
        @gromit: So who is buying the houses to keep prices high if investors don't want them anymore?
        
        gromit on 02/07/2023 - 20:29
        
        +2
        
        @greatlamp: housing demand is increasing with population. We have 400k new people this year alone. We need incentives for huge increases of new capacity at the moment as we are running way behind on new builds, if you gut that then prices stay high or increase as the amount of people fighting for the supply grows.
        
        greatlamp on 03/07/2023 - 08:26
        
        -3
        
        @gromit: The prices are high because there is no incentive for them to fall.
        
        Prices are so high now that rents don't cover even half the costs of ownership. You assume that if negative gearing were removed, which makes property ownership cheaper for investors, prices would go … up.
        
        That is simply nonsense. Read some of the research posted by cadwalader below if you are unable to think this through yourself
        
        gromit on 03/07/2023 - 10:37
        
        +1
        
        @greatlamp: prices are high because of demand. removing NG will remove a large amount of investors from the market leading to less builds and hence even higher demand for a limited supply. IF you expect prices will drop with less supply you are living in a fairy land.
        
        Chandler on 03/07/2023 - 12:26
        
        +1
        
        @gromit:
        
        prices are high because of demand
        removing NG will remove a large amount of investors from the market leading to less builds and hence even higher demand for a limited supply
        
        Did you understand what you just wrote?
        
        Prices are high because of demand
        
        Yes.
        
        removing NG will remove a large amount of investors from the market
        
        Yes.
        
        leading to less builds and hence even higher demand for a limited supply.
        
        Eventually you'll see less builds yes, due to decreased demand (no investors buying property). You'll probably see a reasonably immediate drop in supply as some builders exit the market ASAP. But supply will still be high due to the size of the industry: not every builder will exit, and not every builder will be able and/or interested in pivoting to another market.
        
        I don't see how you figure you'll get a higher demand. Decreased supply? Yes, as mentioned above. But increased demand?
        
        Current demand = Investors + Occupiers. New demand = Occupiers only.
        
        Current supply is more than the maximum output of builders, due to market pressures which builders are also taking advantage of: taking on builds with no realistic intention to complete them within schedule (LDs < opportunity cost), taking on more work than capable, cutting corners/doing things "on the cheap", etc. Even with all this current supply is less than demand, hence limited supply currently.
        
        New supply will be the maximum reasonable output of builders - but is that less or greater than the new demand? Depends again on what happens with the builders (who stays, who goes, etc). Initially I see it being greater, for my aforementioned reasons.
        
        NG to the construction industry is just any of the other government financed construction schemes (insulation, solar, halls for schools, etc) - bad actors get involved to take advantage of it (builders, landowners, REAs, etc) and prices/expenses get jacked up since the government is footing part of the bill. It's just that since NG has been around for so much longer, a larger portion of the industry has turned to leaches suckling the government teat and reluctant to get the tap turned off.
        
        greatlamp on 03/07/2023 - 13:18
        
        -1
        
        @gromit: removing NG will remove a large amount of investors from the market leading to less demand immediately, and less builds in a couple of years.
        
        The supply and demand chart you have in your head does not have time on it, the real world does.
        
        gromit on 03/07/2023 - 13:30
        
        +1
        
        @greatlamp: In the real world we have a large influx of migrations, larger than at anytime in the last few decades. Unlike the timeline in your head the real world does work on supply and demand and demand is going to massively outstrip supply at the moment even without the impact of the removal of NG. removing NG would just make it worse.
        
        Duckie2hh on 03/07/2023 - 14:41
        
        @greatlamp: You also failed to mention the other side of the coin. When the property becomes positively geared, landlords would be paying tax back into the system.
        
        Duckie2hh on 01/07/2023 - 18:58
        
        @greatlamp: If negative gearing is removed, why wouldn't landlords increase rent to cover the shortfall from the gearing? For some landlords, the tax deduction at the EOFY can make or break the whole budget
        
        greatlamp on 01/07/2023 - 19:05
        
        @Duckie2hh: Why wouldn't they increase rents now? Have you ever met a landlord that chooses to charge less rent than they can?
        
        Landlords can't charge more rent than renters can afford.
        
        For some landlords, the tax deduction at the EOFY can make or break the whole budget
        
        Exactly. That's what causes house prices to fall if the tax deduction is removed.
        
        Duckie2hh on 01/07/2023 - 19:43
        
        +1
        
        @greatlamp: Yes I have. Currently landlords will charge the market rate according to supply and demand. So when gearing is removed, those landlords will have no choice but to increase rent in order to meet their mortgage repayments.
        
        The end result is those people who HAVE to rent will end up paying way more.
        
        fusion17 on 02/07/2023 - 11:46
        
        +3
        
        @Duckie2hh: People like greatlamp just can't get it.
        
        I was literally in this situation 7 yrs ago. Renting in inner west, owner wanted to sell and offered it to me off market at a good price as I was a good tenant. I wasn't ready so my only choice was to look for another place to rent. I wish the owner didn't sell.
        
        What do all the loonies think will happen if they force many of the landlords to sell? Do they think the renters will magically be able to buy them? Maybe a tiny portion.
        
        greatlamp on 03/07/2023 - 08:32
        
        +1
        
        @Duckie2hh:
        
        those landlords will have no choice but to increase rent in order to meet their mortgage repayments.
        
        Or they will sell the investment property. 100% of landlords will not be able to increase rents by 30%. The change will put pressure for rent to go up AND for property prices to go down. You seem to be ignoring half the equation.
        
        Duckie2hh on 03/07/2023 - 09:18
        
        @greatlamp: No I agree that prices are likely to fall. But I am questioning why you feel that increasing rent will ultimately result in better outcome for renters? ~ 30% of the property market is held by investors. Once 29% goes back to owner occupiers, do you think that resolves the housing crisis?
        
        greatlamp on 03/07/2023 - 09:58
        
        +1
        
        @Duckie2hh: Rent will not go up significantly. It has not kept pace with increasing property prices for 30 years, it has not kept pace with the increasing mortgage costs imposed by the recent rising interest rates. The assumption that landlords will just pass on the value of any lost tax deductions to renters is your assumption. Instead, housing prices will fall.
        
        Duckie2hh on 03/07/2023 - 09:59
        
        @greatlamp: So… remind me again how does removal of negative gearing help?
        
        greatlamp on 03/07/2023 - 10:11
        
        @Duckie2hh: It encourages the owners of investment properties to sell, instead of holding onto properties and receiving an annual income tax deduction while they anticipate capital gains.
        
        Selling lowers property prices. If you don't agree with that then explain why.
        
        Duckie2hh on 03/07/2023 - 10:37
        
        @greatlamp: Sure let's go with your logic. House prices drop by 15-20%, An influx of property comes onto the market and they get bought by owner occupiers. 1-2 years from now, what's going to happen? You suddenly will end up in the same predicament with housing supply not matching demand (birth rate + immigration). Except now, those immigrating to Australia will only have a choice from the even smaller rental market.
        
        So yes by your logic, housing prices will drop and more owner occupiers are likely to purchase the property. However it doesn't solve the problem 2-5 years down the track.
        
        Also, if you remove negative gearing for non-businesses, it could* just force landlords into changing their status OR have big businesses taking over the rental supply market.
        
        greatlamp on 03/07/2023 - 14:04
        
        +1
        
        @Duckie2hh:
        
        Except now, those immigrating to Australia will only have a choice from the even smaller rental market.
        
        If people who are trapped in renting buy their own home, they aren't renting anymore. A smaller rental market is exactly the outcome that we should be aiming for. Those immigrants are competing with less locals.
        
        I don't want to live in feudalism.
        
        Also, if you remove negative gearing for non-businesses, it could* just force landlords into changing their status OR have big businesses taking over the rental supply market.
        
        That's an entirely different discussion which already has solutions.
        
        Duckie2hh on 03/07/2023 - 14:08
        
        @greatlamp: You can't assume that everyone who is currently renting, will be able to afford a home (even if prices drops by 20%), if suddenly there are availability. You might not like feudalism, but the concept of having landlords providing rental properties is required for the market.
        
        So your solution to everything is just to remove negative gearing? How will that exactly help the 5.8% of the population* who is currently on welfare, get a roof over their head?
        
        *ref: 2021 Census from the ABS
        
        greatlamp on 03/07/2023 - 14:21
        
        +1
        
        @Duckie2hh: By reducing rental demand. Cheaper housing helps the poor, even if they are renting.
        
        I don't have to assume everyone will buy their own home. You are assuming landlords won't exist without negative gearing.
        
        Duckie2hh on 03/07/2023 - 14:38
        
        @greatlamp: I did not assume nor say that landlords would not exist. I said that it was likely for landlords to exit the market which results in increased rent. Great for those who will get their home, but terrible for those that have to rent due to their situation.
        
        Cheaper housing helps the poor, even if they are renting
        
        How will a reduction in property price (lets say 20%) help renters? You have just jumped on this band wagon that negative gearing is bad, landlords are bad; without actually putting forward any thoughts on the renters themselves. You automatically assumed that a drop in property price, exit of landlords will equate to more people owning their own home. As I have said before, whilst this is true in the short term; it will make zero impact on housing affordability 2-5 years down the track. You will still see 50+ groups touring any remaining landlords that have properties for let.

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