Interest Rates Don't Need to Come Down.

aimon on 04/06/2024 - 16:38
Last edited 04/06/2024 - 18:57

I was just watching this video from ABC where they used the term "Higher than usual interest rates" of where we are now. This is very misleading we now have normal interest rates. The 30 year average is 4.14% and we are sitting at 4.35% now.

If anything they should probably be higher to balance out the decade of cheap cash flooding the system.

We need to stop blaming interest rates and start blaming the terrible government policies of both parties that fuelled housing speculation. I don't have anything against investing in property but you shouldn't be expecting public funds for losing money on a deal. It's dole bludging for the rich.

https://www.youtube.com/watch?v=KKtSYbHS5Cw&ab_channel=ABCNe…

https://www.rba.gov.au/statistics/cash-rate/

Financial Interest

Comments

          • jaimex2 on 05/06/2024 - 13:19

            @tomfool: Investors are already gaining plenty by skipping out on the 45 cents to the dollar that would have otherwise been income tax. The amount of 'on paper' depreciations is pretty ludicrous.

            It definitely needs tweaking - its so good no one really bothers to invest on anything other than property. We just churn appreciating dirt to each other because its such a good way to stay under $180k and make huge gains with money that otherwise would have been taxed at the maximum rate.

            Albo changing the stage 3 tax cuts hasn't done this any favours. I'm about to rip the ATO a new one this FY.

            • larndis on 05/06/2024 - 16:24
              +3

              @jaimex2: You are aware that negative gearing (i.e. reducing taxable income by deductible expenses) and the CGT discount apply equally to all types of income producing investments, right?

              Many people seem to believe that property is treated differently (to borrowing money to invest in shares, for example), when that is not the case.

              • zoombie on 05/06/2024 - 17:06
                +1

                @larndis: everyone is aware of this! the problem is that in australia we used it as a tax deduction and speculate houses to the point of ridiculous. if ppl want to speculate on shares, no one cares but ppl need a house to live in.

                btw: i find it ridiculous that if u drive to work (or catch public transport), the cost of driving is not tax deductible because the ato determines that driving to work is not work itself, theres no connection between the 2 activities.

                but the cost of owning a property is deductible against your income because somehow these 2 activities are connected.

            • Grunntt on 05/06/2024 - 17:18
              +2

              @jaimex2:

              its so good no one really bothers to invest on anything other than property.

              People really need to get out of their echo chambers occasionally and maybe stop using hyperbole to make a point (I do understand some of this is property related but my point is still relevant).

              "ASX has an average daily turnover of A$4.685 billion and a market capitalisation of around A$1.6 trillion, making it one of the world's top 20 listed exchange groups, and the largest in the southern hemisphere."

              • jaimex2 on 05/06/2024 - 21:43

                @Grunntt: Why would I or anyone invest in the ASX when -

                I know property prices have nowhere to go but up, especially with the construction sector hosed, supply scarcity guaranteed and wealthy immigrants flooding in.

                I can get a large loan from a bank easily, they wont question what its for and I can exploit things like cashbacks - It is stupid how much tax free money I received from churning lenders and receiving $4k each time while I deducted the establishment fees.

                I can cleanly pay someone to manage it for me and tax deduct that while I forget about my obligations.

                I pay someone to make up a whole bunch of bollocks about how much the building and fixtures are depreciating and deduct that - legally.

                The ASX is for your super fund and professional hedge fund managers. You're already forced into it so why play any more in there when there's a much better option that makes it easy to stay in the under 45 cent tax brackets.

                • cadwalader on 06/06/2024 - 01:32
                  +3

                  @jaimex2: All the same deductions are already built into the capital growth of your shares and dividends. They are companies, they do the accounting and then report on the profit.

                  After putting in all that effort, you get the growth as investing in shares which are much easier to manage.

                  The biggest financial difference is that its easier and more options exist to leverage into property. There are more hoops to jump through to invest in the ASX but its not out of reach to the common person. The Long term average returns on the national share market is actually better than the long term average returns on the national property market after factoring in insurance, rates, maintenance etc. Remember, you're deducting it because its an actual cost.

                  The biggest social difference is that its totally acceptable to humble brag about your property(ies) at a gathering. When you say you have a place in Balmain everybody knows how much it is worth but its perfectly acceptable to tell people where your properties are. On the flip side, you'll look like a right douche if you even mention that your share portfolio is worth 3 million++. Same reason why people buy nice cars, boats, jewellery and watches. Socially acceptable signalling. To add to that, you can wear a fake watch and photoshop a share portfolio but its going to be quite hard to owning a Balmain property or at least cost you that much in rent for the period you claim you own it.

                  • jaimex2 on 06/06/2024 - 13:36

                    @cadwalader: Yeah - there's a lot of phycology in it for sure.

                    The other part for me at least is that property is tangible and easy to understand. It's a building, I know that I'm in for.

                    I look at the share market and it looks completely erratic. Shares go up and down with almost no tangible explanation.

                    Doesn't matter if the company is doing well or poorly… Or has done nothing. There is no correlations other than bots trading and manipulating it as far as I can see.

                    Even in fields I'm an expert in. Stocks move for literally no reason other than some random fund decided to pump or dump. I'm not jumping into that shark tank.

                    Then there's the safe stocks - the make consistent gains slowly except when they get wiped.

                • tomfool on 06/06/2024 - 15:25
                  +1

                  @jaimex2: You can deduct whatever you like till you get audited. Then you have to prove your deductions are valid.

                  • jaimex2 on 06/06/2024 - 17:36

                    @tomfool: They're all valid and done by a quantitative surveyor or whatever they're called

    • Brianqpr on 06/06/2024 - 07:05

      Agree but there's no going back now. John Howard's time was when it could have been sorted out. Instead he handed out grants and further fueled house prices.

      • larndis on 06/06/2024 - 09:30
        +1

        Oh yeah pre-GFC, the glory days when there was cash to splash and no repercussions.

        As much as I'm happy to blame Howard, we could have elected Shorten and maybe the housing crisis would now be less severe. The Coalition ran a very effective fear campaign to stop that from happening.

        • Brianqpr on 06/06/2024 - 21:27
          +1

          Agreed, assisted by most of the media. What Shorten was proposing wasn't even that drastic and made a lot of sense.

          The great Aussie public decided to give us Scott Morrison instead 🙄

  • LanceVance on 04/06/2024 - 17:27
    +3

    Well said.

    • Logical on 05/06/2024 - 09:19

      It's a he said she said both agree situation then

  • Godric on 04/06/2024 - 17:46
    +7

    Packet of Chip prices need to come down though, $7 for a bag is ridic

    • SimpleLeverage on 04/06/2024 - 18:58
      +2

      $7 is redic, but we need more people to vote with their wallets. The problem is because it's "only $7" people still buy it anyway.

    • Jimothy Wongingtons on 04/06/2024 - 20:16
      +1

      You best believe I be stocking up hard these days when Amazon price matches half price packs of red rock then beats it again with sub and save

      • Godric on 04/06/2024 - 22:28
        +1

        And the Pepsi Max's!

    • Zondor on 05/06/2024 - 18:02

      I just make popcorn now

  • hasher22 on 04/06/2024 - 18:03
    +3

    Interest rates is a bandaid fix, that's all it is. No government will ever fix the core issue which they created because it helps line their own pockets.

  • AustriaBargain on 04/06/2024 - 18:18
    +11

    I just wish we'd build more houses. 20 years from now we'll have the same problem, average houses will be three million dollars each and there will be massive shortages and everyone will be scratching their heads as if 20 years wasn't enough time to import the materials and find the labour to do it. There's babies being born today that could be trained into construction workers 20 years from now. We could plant forests today that would provide the lumber needed 20 years from now. We could build steel refineries or whatever in India to get ready for future construction. But doing that doesn't make anyone rich. Dramatically increasing supply could actually erode on paper wealth. The housing bubble would take a massive interest rate to pop, but why go through that pain when no except renters and low income home buyers wants it.

    • Ghost47 on 04/06/2024 - 18:50
      +6

      Building houses is one thing, building houses that are still going to be habitable in 10-20 years is another thing. I suspect some housing that's gone up recently will need major remediation works in 10-15 years and that's probably being generous. People are dreaming if they think importing tradies from third world countries is going to help when construction standards in those countries are probably subpar compared to here.

      Cheap, fast, good. Pick two.

      • AustriaBargain on 04/06/2024 - 19:31
        +2

        Has the technology to build houses that last been forgotten or something, is it impossible for a country as large and rich and populous as Australia to rediscover it? Maybe grant some boffins at the CSIRO to look into it?

        We could train the workers better. Give them body cams and keep them to account. This isn't an unsolvable problem. Other countries are building like massive bridges, deep tunnels, giant towers, etc. Building some decent houses and apartments isn't like going to the moon or anything. It can probably be fully costed to pay itself off too. Like the NBN, even worst estimates had it paying itself off eventually even when rolling out gigabit fibre to everyone quick smart. It was just politically impossible, with Rupert Murdoch still alive and News Corp existing in its current form.

        • Ghost47 on 04/06/2024 - 20:50
          +2

          I think we're just at the stage where housing is seen as an investment first and foremost and not a place for people to live or raise their families, so developers do whatever they can to maximise their profits which means cutting corners and costs. Politicians are in their pockets so any sort of governance would be loose or totally bullshit.

          I just don't see it getting any better at all.

        • R4 on 05/06/2024 - 17:49

          The Germans build houses in factories (Google Huf Haus) than can be transported to site and erected from slab to turn key in 4 weeks. Friends of ours in Switzerland built one and it is fantastic. Maximise the use of automation and semi-skilled labour in a factory. Minimise the use of skilled labour on site. A big capital investment to build the plant and logistics chain but should be relatively pain free when outputting. It just takes investment with balls and government to get on board.

        • jaimex2 on 05/06/2024 - 21:50

          There's more pointless red tape than ever so building is super slow, expensive and only the big developers can do it at scale - and they hoard the estates they build releasing slowly to inflate prices. Best part is the red tape does the minimum to stop shoddy construction.

          TAFE also got massive cuts decades ago so there's very few trades and there's going to be even less as the current ones retire.

          Then there's also NIMBY - no one wants high density to ruin their suburb that wasn't designed to host twice the population and traffic being imposed on it.

          • AustriaBargain on 05/06/2024 - 22:33

            @jaimex2: We shouldn't have let them do it like that. Same with dentists, we could have forced them into medicare if we really wanted to.

      • H3R34TH4C0MM3NTS on 05/06/2024 - 21:19

        why do these these things need to be mutually exclusive,
        why can't. you have

        reasonably priced, quick enough , good enough. Now these how to define these qualifiers is another question.

        your saying the housing that has gone up recently (all built by local labour) is still sub par and will need major remediation works so why not have cheaper imported labour give you the same sub par result. at least you'll be paying less upfront and have it delivered quicker all things being equal.

        Singapore doesn't seem to have a problem delivering housing and infrastructure projects with the endless supply of labour from South Asia.
        The only difference there is they dont pay 6 figures for the tyre kickers and sign holders.

        The issue in this country is not whether the labour is coming from outside or within its the the lack of accountability in delivering to a minimum standard of quality or delivering at all ie Porter Davis.

  • Stewardo on 04/06/2024 - 18:43

    Allow first home owner occupiers to use negative gearing on their new build homes. But only in postcodes that are away from metro centres.
    That way you will get new housing stock built in regional areas and decrease price pressure on urban centres and get a new generation of people in regional towns.
    The most expensive part of established property is the land it sits on, Australia has lots of land, it’s just that everyone wants to live in the same areas due to employment and lifestyle benefits.
    We haven’t built enough housing for the last 30 years.
    That why it’s expensive.

    • IM-Cheap on 05/06/2024 - 00:58
      +2

      What jobs are available that any amount of incentive would convince a first home buyer to move to a regional areas? What facilities are there in terms of schools, shops, transport, recreation etc. ? If the most expensive part is the land then the answer should be to build up and the incentive should be for an apartment.

      • Stewardo on 05/06/2024 - 10:13
        +7

        That’s the mentality that’s got us in this situation. We need to stop spending money on infrastructure in cities. Linking regional areas with rail, roads and fast internet. Would decentralise the economy from the big cities. Building up regional cities will create transport recreation hospitals jobs etc away from the expensive real estate that young people can’t afford to get into.

        • SlickMick on 05/06/2024 - 13:21

          If we want cities, we should start again. Trying to get efficient transport infrastructure into Sydney, Melbourne & Brisbane would be ridiculously expensive if not impossible. But hire town planners from Japan, clearly we're not good that this.

          Since that's never going to happen, I totally agree that regional is the way to go.

          • smartazz104 on 06/06/2024 - 08:58

            @SlickMick:

            ridiculously expensive

            Someone should do as proper cost breakdown so we can see where the true rorts are…

            • SlickMick on 06/06/2024 - 10:11
              +1

              @smartazz104: I don't think it's rorts, it's just that nothing was designed for the future. Our roads follow cattle tracks, and development hasn't followed a plan.
              To try to build roads and rail now requires either tunnels or a mess of overpasses. Neither of which are cheap.

          • rehan770 on 06/06/2024 - 23:52

            @SlickMick: I don't think that will happen in Brisbane last from 1st Aig 50c. for travelling by a bus on any stages for 6 months Imao!!!

        • larndis on 05/06/2024 - 16:33

          Agree on this, I cannot understand why state governments aren't doing more to set up/grow proper regional centres, to encourage people to live outside the capitals. The lack of forward planning and coordination with local governments is astonishing.

          • Stewardo on 05/06/2024 - 18:33
            +2

            @larndis: It’s mainly about votes, if you pledge to build a football stadium, tunnel, metro line etc in the city you might have a better chance of winning election. Not as many voters in regional areas, and country areas often vote the same way each time anyway.

    • Leiothrix on 05/06/2024 - 07:58
      +5

      Negative gearing is just offsetting your expenses against your income.

      A PPOR does not generate any income so the proposition doesn't make any sense.

      If you rent out a room or granny flat or something and generate income on your PPOR you can offset the expenses against that. You also open yourself to CGT problems if/when you sell.

      • Stewardo on 05/06/2024 - 10:08

        It also offsets personal income of the same entity.
        CGT burden would be an incentive to stay in area.
        I understand negative gearing very well.
        I’m proposing if your the first owner of new build and it’s your ppor you could claim depreciation and interest as long as you reside in the house and don’t alter the load. Against your personal income tax, not rent.

    • mavis30551 on 05/06/2024 - 09:43
      +1

      THis doesnt make sense.

  • saliya on 04/06/2024 - 19:10
    +1

    Force corporations that purchase Australian property to disclose every level of ownership.
    Tax property that has any level of foreign ownership appropriately.
    Wouldn't be that hard to legislate.

  • jchay on 04/06/2024 - 19:33
    -6

    Your logic is flawed. Average interest rate over 30 years let say it’s 4%. Have you also average out the house price across 30 years? Your statement is purely supportive of high interest rate profited by banks and baby boomer. Investor who worried about high interest rate are your typical Aussie who wanted to get ahead for their retirement which is good for us tax payer paying less for their welfare later. Can you really think of few benefits of how high interest benefits people who wanted to purchase their own home? The RBA has no other available tool to tackle inflation which is only targeting ordinary average Aussie with high borrowing interest rate.

    • SpainKing on 05/06/2024 - 15:11

      You should ask ChatGPT to proofread your comments before you post them for clarity

      • jchay on 06/06/2024 - 21:08
        +1

        Sure, here is the proofread version of your text:

        Here you go.

        Your logic is flawed. The average interest rate over 30 years is, let's say, 4%. Have you also averaged out the house prices across 30 years? Your statement purely supports high interest rates, which benefit banks and baby boomers. Investors worried about high interest rates are typically Aussies who want to get ahead for their retirement, which is good for us taxpayers, as we would pay less for their welfare later. Can you really think of a few benefits of how high interest rates benefit people who want to purchase their own home? The RBA has no other available tool to tackle inflation, which is only targeting ordinary, average Aussies with high borrowing interest rates.

  • orangecarpet-22 on 04/06/2024 - 21:45
    -2

    Why are old rich white men in some room making interest rates up again for millions of people? Let the free market decide the cost of capital.

    Maybe if we had some diversity and inclusion the houses would be cheaper.

    • ssfps on 05/06/2024 - 03:12
      +4

      If we abolished the corrupt banking practices that allow banks to print money out of thin air when "loaning" money, all these downstream issues would vanish, and it would be obvious they were nothing more than engineered theft. Reasonable interest rates would be far more palatable as it would be freed from these bullshit issues of causing inflation vs crippling the poor. Instead it would be a fair, true, market of money lending, where the rates could be decided by natural supply and demand of capital.
      eg

      Austrian School economists such as Jesús Huerta de Soto and Murray Rothbard have strongly criticized fractional-reserve banking, calling for it to be outlawed and criminalized. According to them, not only does money creation cause macroeconomic instability (based on the Austrian Business Cycle Theory), but it is a form of embezzlement or financial fraud, legalized only due to the influence of powerful rich bankers on corrupt governments around the world.[40][41]

      https://en.wikipedia.org/wiki/Fractional-reserve_banking#Aus…

      rich white men

      It might interest you to know that these corrupt bankers that pioneered this system were not, primarily, "white" (by modern DEI standards). Arguably the cornerstone founders of international banking were Jewish, and Jewish people remain over-represented among the banking class.
      People throw around "white" in a derogatory manner pretty casually these days, but this illustrates why such remarks are still racist.

      The Rothschild family pioneered international finance in the early 19th century. The family provided loans to the Bank of England and purchased government bonds in the stock markets.[185] Their wealth has been estimated to possibly be the most in modern history

      https://en.wikipedia.org/wiki/History_of_banking#Rothschilds

      • orangecarpet-22 on 05/06/2024 - 16:10
        +3

        Thankyou, you said it in a much better way and I suppose my sarcasm didn’t really come through, because it’s believable in this day and age.

        • ssfps on 06/06/2024 - 00:39

          I should have realized by your second sentence!
          Still, maybe someone will learn something from the short dialectic.

      • gfjh567gh3 on 19/06/2024 - 14:42
        +1

        Yes, fractional reserve banking is incredibly evil. There's a reason that usury itself was banned for most of the world in most of history.

        Central banking is equally as bad, and required bloodshed to implement. Central banking is how a Government can 'print' money, but gives it to 'primary dealer' banks to distribute as a financial instrument (bonds/treasuries/whatever flavour they can think of). They claim that interest is paid back to the treasury, but the damage is done via inflation as this money enters the market and competes with your wages and savings for the same, finite goods.

        Central banking is also exclusively Ashkenazi Jewish, and strongly linked to 'unlinking' currency from tangible assets, such as gold or silver (which would prevent inflation).

    • gfjh567gh3 on 19/06/2024 - 14:37

      Cool it with the anti semitic remarks

  • plmko on 04/06/2024 - 22:19
    -2

    Ignoring interest rates, I find it funny the mortgage system sees someone like myself unable to service a sufficient loan for a home.

    Yet if I went into it with a partner who doesn't work, suddenly I can get that loan.

    But if I sought out a loan from overseas, I can get the amount I want and then some.

    Strange country. Perhaps there are some truths in there on why people can't get a home.

    • Poor Ass on 04/06/2024 - 23:18
      +3

      Yet if I went into it with a partner who doesn't work, suddenly I can get that loan.

      Haven't seen an example of that but each kid you have lowers your borrowing capacity. Assume the dependant with no job does too.

      But if I sought out a loan from overseas, I can get the amount I want and then some.

      You'll only be able get that loan if you have collateral or income from that country and even so you wouldn't be telling them you are buying a house in Australia they'll decline that loan

    • Sal in SA on 05/06/2024 - 05:55
      +2

      Partner unemployed will not allow you to sudden service a loan.. this is completely wrong.
      And Australian has tighter lending laws for a reason than many overseas - we don't want to lessen the lending laws - that leads to worse issues.

      It is not strange to have strong lending regulations.

    • Goremans on 05/06/2024 - 22:29

      Yeah thats not how it works. A few years ago we spoke to a broker - we had a 1yr old baby
      We couldn't borrow until my partner was working min 15 hrs a week.

      On my 60k annual…needless to say our borrowing power was not great. $450k…. still haven't bought anything.

      Doubt we'll own a home ever, im getting too old now, 38, and its looking like having a second kid will be too expensive.

      Anyway NATO/Russia war coming if not here by proxy already… so I'll probably die in a European trench in a decade or 2… yay

      Wish I was a boomber - born after the last war… will die before the next one😂

  • ForkSnorter on 05/06/2024 - 08:20
    +4

    When you have a housing crisis, the tax system should be revised to make it cheaper to build a new home.

    But that hasn't been done.

    The tax system currently makes it extremely expensive to build a new home because taxes make up around 40% of the cost of building a new home.

    WTF

    The tax system, which is currently designed to continually and massively increase the wealth of people who own multiple properties, needs to be redesigned and those tax breaks that make wealthy people wealthier need to be retargeted so that normal people can easily go buy a cheap block, and build an affordable house on it.

    • mavis30551 on 05/06/2024 - 09:40

      No government is brave enough to do this.

      The liberals just flat out wont because they only line their own pocket and thagt of their donors (who own lots of houses)

      And Labor know it will most likely be like last time they tried to make small changes to negative gearing. Murdoch press went after them hard and people got scared so they lost the election.

      Greens dont hold enough support. We really do need to start voting in progressive independents, the propaganda media train cant target every single one of them, peoples attention span is too short,.

    • Grunntt on 05/06/2024 - 09:54
      +1

      the tax system should be revised to make it cheaper to build a new home.

      In which world have you ever seen a reduction in price because the gov't makes it cheaper to do something?
      eg child care prices increased to absorb any increase in gov't funding so that the child care industry could make even more money - why would property developers be so much more charitable?

      • OhNoUShiz on 05/06/2024 - 13:06

        SME bosses need to buy more BMWs and investment houses.

      • ForkSnorter on 05/06/2024 - 14:38

        why would property developers be so much more charitable?

        You can buy a piece of land somewhere and pay a local builder to build a house on it. If there weren't so many taxes and fees, you could do it much more cheaply than you can now.

        • moar bargains on 05/06/2024 - 15:57

          But the point is that no one running a business (that's making a killing like most tradies and developers currently are) is gonna go "Oh, the government has reduced taxes so I guess I'll make it cheaper". They're gonna go "Someone was willing to pay $300k for me to build this property yesterday, so they'll still pay $300k today. That $50k that I don't have to pay the government now can get written off on a new Hilux".

          • ForkSnorter on 05/06/2024 - 16:00

            @moar bargains: Not if another builder can afford to build it $50k cheaper.

            Remember, capitalism is competition.

            • moar bargains on 05/06/2024 - 16:10

              @ForkSnorter: Competition only works when you have enough players competing. Currently, in many parts of Australia, builders are booked up 2-3 years in advance already. They're not dropping prices. See also supermarkets, telecom companies, big 4 banks, BHP/Rio, electricity generators, etc etc.

              Don't get me wrong. I agree with your basic premise that the taxation system needs to be changed to reduce the attractiveness of investing in property, but we may disagree on specific points of implementation :)

    • SlickMick on 05/06/2024 - 14:12

      I agreed with you for a while there… our leaders seem incapable of designing solutions to solve problems.

      However, our tax system isn't designed for property portfolios, in fact it is unfairly against property investment.
      Everyone picks on negative gearing, but every investment loss can reduce personal taxable income - it has nothing to do with properties.
      All the ATO would need to do is consider property investment as a business endevour rather than an investment, then losses can only be applied to rent.
      But then they'd have to allow full depreciation and travel, and introduce additional expenses, so it would only allow more deductions.

      • ForkSnorter on 05/06/2024 - 14:35
        +1

        However, our tax system isn't designed for property portfolios, in fact it is unfairly against property investment.

        Since CGT discount and negative gearing were introduced, there has been a massive increase in the number of people buying investment properties. This increases demand for housing, thereby making investors wealthier from the associated rice in prices.

        The tax breaks aren't just making it easier for investors to make money. They actively encourage investment in a very limited resource, thereby significantly increasing demand, thereby increasing the value of investors' existing stock.

        In fact, if you had bought an investment property in Sydney 20-25 years ago, you would likely have made somewhere between $1 million and 5 million in equity without having to do very much other than basic maintenance.

        Anyone owning investment properties around Australia would likely have made a minimum of $300,000 in equity per house since the start of the COVID pandemic without having to do anything. In many cases, probably more.

        How is this unfair?

        • SlickMick on 06/06/2024 - 08:54

          unfair? Who said life is fair. Do you want to have laws that keep anyone else from getting ahead?
          (If it makes you feel any better, none of my properties appreciated by more than $300,000 since covid.)

          My point is the same rules apply to any investment. The reason I invested in properties rather than shares is the banks were more willing to loan for real estate. Shares would have been a far better investment for me. I think it's the banks you should have the issue with.

          If gov wanted us to invest, then I reckon the policies were excellent. If they didn't want it to be focussed on property, maybe someone should have looked at the banks lending policies.

          • ForkSnorter on 07/06/2024 - 08:14

            @SlickMick: You were the one who said “unfair”.

            I asked “how is this unfair?”, if you happened to read it properly.

      • ssfps on 06/06/2024 - 00:43
        +1

        I agreed with you for a while there… our leaders seem incapable of designing solutions to solve problems.

        Our leaders are smart people that are successfully creating solutions for problems they want to solve, bad luck for the general population that their gain is our loss.

        • zoombie on 06/06/2024 - 10:33

          I disagree that our leaders don't know the solution to these problems. The problem is the consequences from fixing it

          1) the solution requires going through pains (aka losses and unemployment) and aussie dont want that

          2) the opposition leader (labor or liberal) will oppose it because there are lot of votes to be gain

          3) it requires drastic changes to the economy that will takes a long time to play out, meaning lots of pain for a long time.

          johnny howard started this mess and no PM has touch it ever since.

          • ssfps on 06/06/2024 - 16:14

            @zoombie:

            the solution requires going through pains (aka losses and unemployment) and aussie dont want that

            You're saying the solution to the general public's pain is more pain but for only a subgroup of that general public (eg 10% of them should lose their job or have worse living conditions)?

            Yes, those are the only two options the tv/reddit/etc (largely) present, which should clue you in that you're being presented an oversimplified dichotomy.

            Ask yourself
            1) how is it that money can suddenly be worth less?
            2) what happened to the promise of the industrial revolution by the industrialists, that mass production and automation would make everything cheaper? where is the extra wealth from these advances?
            3) why is almost all public messaging around "fixing" the economy reduced to discussion on interest rates?
            4) who makes up the rules for what interests rates actually do? do you know how low interest rates cause inflation?
            5) why would somebody believe that fixing the root issues of our economic turmoil should be so painful for the general population? what proof is there of that?

            johnny howard started this mess and no PM has touch it ever since.

            The economic path we're on was started long before the federation of aus.

            • zoombie on 06/06/2024 - 17:42

              @ssfps: wtf are you talking about? the thread is mainly about the effect of negative gearing and other taxes on house prices.

              the solution to these is to remove incentives that would encourage people to speculate on houses and to remove demands.

              the pain i was talking about is that if you induce a price fall of let say 20% or more, thats a lot of wealth that are being destroyed.

  • Trying2SaveABuck on 05/06/2024 - 08:21
    -5

    Lmao the ABC is left wing trash what do you expect?

    • ThithLord on 05/06/2024 - 08:36
      +2

      Is that why they platform Murdoch hacks on all their talk shows? Cos they're big ol' lefties?

    • mavis30551 on 05/06/2024 - 09:37
      +1

      Spoken like a true murdoch hack that just repeats the same thing spoon fed into them by foxy

      • Trying2SaveABuck on 05/06/2024 - 09:48
        -3

        Spoken like a true rub to the system

        Sky news is also fairly trash the difference is im not paying for it and it's slight better then the ABC as it is not pretending to be 'impartial' - however I don't watch it bar from the odd article so might be wrong

        I'm also convinced the only people who watch sky news are those that hate sky news - as i always here 'sky news' as an insult but I for the life of me dont know a single person who watch it lol

        Ill note I'm in Victoria it is not on FTA here

        • smartazz104 on 06/06/2024 - 09:03
          +1

          Sky news is also fairly trash the difference is im not paying for it and it's slight better then the ABC as it is not pretending to be 'impartial'

          But it is pretending to be news…

          • Trying2SaveABuck on 06/06/2024 - 09:05

            @smartazz104: So is the ABC?

            • smartazz104 on 06/06/2024 - 09:05
              -1

              @Trying2SaveABuck: Quick to jump to Sky's defense, odd…

              • Trying2SaveABuck on 06/06/2024 - 09:06
                +1

                @smartazz104: Please tell me where im defending Sky?

                The ABC being rubbish and a waste of taxpayer funds doesnt mean Sky is good - this is the kind of intellect i'd expect from people who watch Sky or ABC LMAO

                I dont hate Sky because i dont pay for it and thus not forced to consume it, i am forced to pay for ABC so i expect better ALOT better than the trash propganda it pushes out almost daily

                Doesnt reply? just downvotes me because you been called out for being a spud have a good day enjoy the propaganda the LWNJ on here make me laugh probably from Victoria our state is full of brainless left wing extremist

  • ThithLord on 05/06/2024 - 08:35
    -2

    BOFE SIDES R DA SAME very lazy. Literally ignoring the fantastic work Labor has done to bring that insane inflation under control.

    • SpainKing on 05/06/2024 - 15:20
      +1

      People saying both sides are the same are either ignorant of what the government does year-to-year or getting high off their own farts because they're so smart seeing through all the bullshit

      • ThithLord on 05/06/2024 - 15:28
        +1

        Why not both?

  • mavis30551 on 05/06/2024 - 09:36
    +1

    They definitely do. All my money goes into my mortgage, They need to ease of a few percent so I can have some money and go to the dentist.

  • MrThing on 05/06/2024 - 09:43

    Who has all this "cheap cash" you speak of?

    Seems some few got rich in the cheap cash and the rest are drowning

  • Boioioioi on 05/06/2024 - 09:47
    +1

    I think something not enough people consider when it comes to interest rates is that the impact is in relation to the overall price of housing too. As houses get more and more expensive, the same interest rate will be harder to afford.

    4.35% P/A of a $500k home loan is $21,750 interest per year
    4.35% P/A of a $1,000,000 home loan is $43,500 interest per year

    The same interest rate, but double the value. Those loans are probably on the same house, first being in 2018 and latter being today.

  • Odin on 05/06/2024 - 09:49

    Long term average became irrelevant.

    HOWEVER, you are right. Government are (profanity) up and the cause of the majority of the problems we have.

    Rates aren't going to get inflation down. Macro policy is needed to get rates down.

  • webtonmoy on 05/06/2024 - 11:30
    +3

    I think the effect of stage 3 tax cuts would push the interest rate higher. I feel that the RBA and Government are taking actions that nullify each other, prolonging the economic trouble further…

  • webtonmoy on 05/06/2024 - 11:32
    +1

    And a funny thing about numbers (about 30-year average vs 15-year average of interest rates): "If you torture data long enough, it will confess to anything".

  • jaimex2 on 05/06/2024 - 11:55
    +2

    It's completely broken and going to buckle. Brace for a hard crash because the 'soft landing' they were dreaming of is very much a fantasy.

    Doesn't matter if the rates move, it is all beyond fix now.

    If they go up investors will tear even more absurd amounts of money out of the tax system and business activity will crash. Victoria would certainly default.
    If they go down inflation will go up and house prices will soar further and you'll fall to civil disorder.

    The high wealth migration is the only thing holding it all together right now but creating its own problems.

    They'll never fix the supermarkets/resource sector profiteering. They are legally funded by them to not mess with their operations.

    • aboogee on 05/06/2024 - 12:37
      +3

      My gut feel is the truly rich investors will be able to navigate through.
      Its the middle class investors that are going to be burned. Took out too much debt without much buffer.
      As such when the crash comes, wealth gap will grow again, as always.

      • OhNoUShiz on 05/06/2024 - 13:08
        +2

        It won't crash as Australia has big enough lands to accommodate any few hundred millions increases in population.

        • jaimex2 on 05/06/2024 - 14:32
          +2

          Yep. Were going to have proper ghettos and tent cities filled by lower class Australians.

          You can't really stop this train crash, we've done everything possible to lock ourselves into this scenario.

        • smartazz104 on 06/06/2024 - 09:04
          +1

          People aren't going to live in the middle of the desert.

        • aboogee on 07/06/2024 - 15:49
          +1

          Doesn't matter whether there is a crash or not.
          Its a rigged game.
          The only thing that is certain is growing wealth gap.
          =(

      • jaimex2 on 05/06/2024 - 14:33

        An investor can always sell and stash their losses / deduct against their income. It's the lower class pool that will be increase and suffer.

  • ribze1 on 05/06/2024 - 14:54
    +1

    Yeah bugs me that the term "high interest rates" is being perpetuated. Yes high compared to the RECORD LOW it was at.

    I remember getting 7%+ on my netbank saver at one point, wouldn't have been the best rate in the market either. Mortgages would have been in the 9s and 10s.

  • drfuzzy on 05/06/2024 - 15:27
    +1

    Interest rates settings are accommodative rather than restrictive.

    Higher rates rather than lower rates are on the horizon.

    This is evidenced by asset prices all being at record high levels.

    Pick any asset: gold, real estate, shares, bitcoin, silver, rare art….all at record highs due to the accommodative monetary environment.

    Everybody wants someone else to blame.

    Personal accountability is deeply unpopular.

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