What Impact Will Landlords Leaving The Victorian Market have?

Trying2SaveABuck on 31/08/2024 - 20:22
Last edited 31/08/2024 - 20:23

'Property investors have been leaving Victoria en masse, pushed out by the increasingly harsh regulatory environment, leaving the already constrained rental market worse for wear, according to real estate agency'

'in light of the current economic landscape, particularly with rising interest rates and new specific state government policies, property investors in Victoria are facing a unique set of challenges. These factors have made it increasingly difficult for Rental Providers to manage and hold onto their assets.'

https://thepropertytribune.com.au/market-insights/victorian-…

'As some investors decide to leave Victoria, first homebuyers are getting their foot in the door'

'Rental numbers fall across three states - In Victoria, rental bonds fell by more than 10,400 in the first three months of the year, and 15,600 in the space of a year.'

'Talk of Victorian investors selling up is rife, with investor groups blaming interest rates, increased land taxes, and the scrapping of no-fault evictions.'

'Prices were also falling in Victoria while most of the country rose.

The median price in Melbourne sits at $783,205, 0.6 per cent down on three months prior.
Sydney by comparison rose 1.1 per cent in the same period to hit $1,170,152
Brisbane rose 3.7 per cent to $859,240
Adelaide rose 4.7 per cent to $767,974
and Perth rose 6.4 per cent to $757,399.'

'Ashley Williams, managing director of Evolve Development in Melbourne, warned disincentivising investors could reduce home building.'

https://www.abc.net.au/news/2024-07-03/first-home-buyers-tur…

'High migration, landlord exodus trap Melbourne tenants in rental crisis'

'Melbourne tenants are being trapped in the city’s rental crisis as a landlord exodus outpaces investors buying into the market and overseas migration drives up demand.
Experts now expect soaring numbers of people will be forced into share house arrangements or to move back in with their parents in the year ahead.'

https://www.realestate.com.au/news/high-migration-landlord-e…

What do people think about the current market in Victoria in which prices are not keeping up with the rest of the nation, new builds are griding to the lowest we have seen in decades, landlords fleeing the market, migration making thE market more competitive to get a rental and the reduction in property investors making it less competitive for some first home buyers to get into the market…

so the POLL question is…What Impact Will Landlords Leaving The Victorian property Market have on the wider market and the state itself?

Poll Options

  • 321
    Overall positive impact
  • 97
    Overall negative impact
  • 18
    Neural impact
  • 13
    Im unsure
Home & Garden

Comments

  • Benoffie on 31/08/2024 - 20:28
    -4

    Just look at Adelaide. Tightest rental market and median house price has virtually doubled in a decade. Record homelessness. No sign of immigration stopping and no improvement for FHB. Landlords treated like shit on shoes. Yep, these are the glory days. 🤷‍♀️

    • AustriaBargain on 01/09/2024 - 10:22
      +29

      In my area of Adelaide all anyone talks about is when they are going to sell their house (the land really because the houses are always demolished) and collect their million+ dollars. These aren't homes, they are winning lottery tickets.

      • ssfps on 02/09/2024 - 05:04
        -1

        What really will bake their noodle later on after selling is, did their 'sound investment' actually net them any wealth, or did it just let them keep what they earned without it being devalued via "debt-economy" theft?

      • Zondor on 02/09/2024 - 11:28
        +8

        Problem is that even if we sell we're not any richer, infact, we're poorer as if we upgrade the % difference is alot higher to our next property now.

        • AustriaBargain on 02/09/2024 - 12:34
          -1

          Oh these retirees aren't buying two million dollar houses, they are retiring to poor countries or outside of the city. For a million dollars you can live in a staffed mansion for the rest of your life in certain other countries. Or they build luxury granny flats in their kids backyard. Like they find ways to spend the money, they'v had a lot of time to think about it and talk about it. And the value of the house is on top of whatever other investments or super they may have going on. When I moved to this area of Adelaide it was all old houses full of old people and in just a few years they are all getting demolished and young cashed up people moving in. Used to be dead quiet at midnight, now you can hear loud music 24/7 from multiple houses on the block around me. Including from the house I'm in.

    • HeWhoKnows on 01/09/2024 - 11:44
      +2

      Its eased up significantly in Sydney since May 2024 to the point where rents have dropped by up to $150pw for 2 and 3 bedroom units in Randwick and Coogee and less in nearby suburbs.
      The number of properties listed for lease has skyrocketed with many taking several weeks and a few price drops to rent out.

      But the media isnt reporting this because it doesnt fit their drama and scare mongering agenda.

      So I wouldn't put any weight on media reports.
      Best to look at the real estate adverts, compare renst and number of listings against early 2024 and work out whats really happening in your local rental market right now.

      As for Victoria, its a lost cause across the board unfortunately.
      Its not just property investors exiting the place.
      Its businesses as well. Not to mention the residents moving out.

      • derrida derider on 03/09/2024 - 12:28

        And yet Melbourne is still the city in Australia with the highest average household income per capita (excepting Canberra) and far more people are moving IN than OUT. It is expected to pass Sydney's population sometime within the next year - that is exactly why it is feeling a bit crowded and why it needs massive infrastructure investment.

        One thing we can agree on is we shouldn't put any weight on media reports - they always have an axe to grind. For the Murdoch papers it is of course always aimed at boomers like me, with as much anti-Labor spin as they can manage. While OPs long quote is from a newsletter aimed at property investors, ferchrissakes. Of course it is going to whinge about how hard done by investors are while at the same time talking up rental prices.

    • SORCERER on 04/09/2024 - 11:59

      Landlords treated like shit on shoes

      that's still better then they deserve tho

      • justworld on 04/09/2024 - 14:00

        Edgy comment. Would be easier if you just funnelled the negative energy into buying a house.

        • SORCERER on 04/09/2024 - 16:20

          just checked with my broker buddy, unfortunately not many properties in my area are accepting negative energy as payment.

  • 7ekn00 on 31/08/2024 - 20:40
    +31

    Far better ways to invest with far better returns and far less headaches ;)

    People voted for the politicians that set these policies, so they presumably are happy with the outcome …

    • arkie0 on 01/09/2024 - 00:16
      +40

      It's just media spin and loaded language used in the provided links like "landlords fleeing the market" - the whole post is full of quotes like it just trying to elicit a response. In one of the articles, they interview 1 person who overleveraged as if thats meant to represent all investors.

      Alot of the stats are cherry picked within the articles too. Median rents in Melbourne are still increasing, might be good for those looking to buy their first property but not as good for continuing renters.

      Investors are just shifting their capital to better performing investments - no different if your share portfolio dropped 10% and expected growth to be flat in the next few years, most people would hold, a small percentage might "flee the market". Even with a 15-20k drop in available rentals, there's still 650,000+ rental properties in Victoria, if it was that bad there would be even less.

      People voted for the politicians that set these policies, so they presumably are happy with the outcome …

      That assumes the majority of landlords voted in the labor government, some landlords that own property don't even live in Victoria, some have multiple properties but still only have 1 vote.

      • 7ekn00 on 01/09/2024 - 07:58
        +10

        Nah, there is substance to it …

        I spent $10k trying to clean cat piss out of a rental that I didn't permit cats in the first place … But due to regulation changes I needed a "good reason" (which there are none) to disallow pets …

        https://www.consumer.vic.gov.au/housing/renting/repairs-alte…

        Rental providers must have a good reason to refuse the renter’s request.

        As a result, sold all my properties and invested elsewhere for far better returns and far less headaches ;)

        • jollibot on 01/09/2024 - 09:59
          +17

          I, for one, am glad there is one fewer landlord in Australia.

          Homes are for shelter, not investment.

          • cfuse on 01/09/2024 - 12:18
            +4

            @jollibot: Anything subject to market forces is for investment. You do not want to live in a coffin apartment and you'll happily pay more not to. Everyone else is the same.

          • SlickMick on 02/09/2024 - 22:47
            +2

            @jollibot:

            Homes are for shelter

            Everyone needs shelter. That's something I'd invest in.

          • justworld on 03/09/2024 - 13:36

            @jollibot: What a home is for is really up to the purchaser.

        • arkie0 on 01/09/2024 - 11:31
          +5

          Strongly agree on both points.

          Dealing with poor tenants are one of the biggest cons for property investing. You can usually get landlord insurance that covers pet damage, EBM covers up to 70k - downside insurance being so expensive it cuts into profitability but necessary cost.

          I always tell prospective landlords there are easier ways to invest, every investment option has risk but property has way more downsides.

          • kaleidoscope on 01/09/2024 - 20:30

            @arkie0:

            I always tell prospective landlords there are easier ways to invest

            Such as? Please don’t say crypto / nft / that new virtual coin…

            • arkie0 on 01/09/2024 - 21:17
              +3

              @kaleidoscope: The usual… Super, Shares/ETFs, savings/bonds

              • kaleidoscope on 01/09/2024 - 22:15

                @arkie0: Hmm thanks.

                My knowledge on those are beyond crap. I know you can save tax you’d otherwise pay to the state through more investment on super, but then again you’d have to retire at appropriate age for any benefits yeah?

                • arkie0 on 02/09/2024 - 00:30
                  +1

                  @kaleidoscope: Can't say if it's the best option. Best to speak to an independent financial adviser, they tend to ask about your goals and timeframes and make a suggestion when they have all the information.

              • SlickMick on 02/09/2024 - 23:02

                @arkie0: Easier, but do they provide the same outcome?

                I know heaps of people who managed to come up with a 20% deposit and the ongoing costs to buy a home, and now own a valuable asset.
                I don't personally know anyone who has accumulated anywhere near as much wealth in shares or savings.

                Also, Super is a vehicle not an investment. If you can invest until retirement, then super is the ideal place for any of those investments.

                • arkie0 on 03/09/2024 - 02:08

                  @SlickMick: There's a lot of discussion around which is better but over a 30-year timeframe both shares and property have gone up about between 8 to 10% pa.

                  There's plenty of pros and cons between the 2 options but the pro of the investment property allows you to leverage which is why you see high returns in return for taking higher risk. What you're comparing is leveraged IP vs shares - do you know anyone who has borrowed money against their house to buy shares? chances are they could have higher returns than property.

                  On a scale of greatest risk/return to lowest it would be leveraged shares (when you margin loan or debt cycle to buy shares) > leveraged IP > shares > non leveraged property.

                  The other thing about shares being "easier" is most people by ETFs which is like the "median" shares - not the best returns but not below market returns. Even if you know nothing about shares, ETFs allow you do get roughly 10% pa.

                  For property you need to know enough to buy the right house in the right area which will have the most growth in the next 10-20 years, most people have just gotten lucky because every where has gotten growth.

                  • SlickMick on 03/09/2024 - 09:16
                    +1

                    @arkie0: It's all about the leverage. Even if house prices were stagnant, you still end up with 5x your initial deposit.

                    I don't think you could call leveraging 500% to invest in shares "easy". That investor wouldn't get much sleep.

                    If someone had the discipline to add to a share portfolio the equivalent of the ongoing home costs (mortgage payments etc) they'd get a good outcome over 30 years, but I don't know such a person.

                    • tomfool on 03/09/2024 - 13:30

                      @SlickMick: Not sure what the difference is, if you have equity you can borrow against that equity to buy shares and negtive gear those shares the same as property.

                      • SlickMick on 04/09/2024 - 09:55

                        @tomfool: Would you do that?

                        Okay, it's not all about the leverage. It's about the leverage + risk.

                        Most people are willing to borrow for a house. I don't personally know anyone who would for shares.

              • BartholemewH on 03/09/2024 - 13:24

                @arkie0: What sort of LVR can you get on these? Genuine question.

                • arkie0 on 04/09/2024 - 09:11

                  @BartholemewH: LVR in relation to shares? I've actually never used margin loans but when you pay off your PPOR home loan - you can create a split and use that money to invest. You're getting tax deductible PPOR home loan rates to invest in shares - which is usually up to 80% LVR and the lowest borrowing rate possible.

                  You don't have to even pay off your home fully you can, split could be 70% PPOR, 10% for investing.

          • justworld on 03/09/2024 - 13:37
            +3

            @arkie0: I refuse to buy investment properties in poor areas or deal with low-income tenants. I want tenants who have something to lose - that way we can both be responsible people in the contractual relationship.

            • SlickMick on 04/09/2024 - 10:02
              +1

              @justworld: That's a wise approach financially.

              I went the other way and bought cheap homes to provide affordable rentals for people. The problem I've had with those is the capital growth has been average compared with nice homes in better areas.

              I also have a nice home in a nice area that I'm renting out because I had to relocate. That one got trashed by scum tenants. I should have asked for more rent to omit the riffraff.
              It's probably just luck that my scum homes have good tenants.

    • AustriaBargain on 01/09/2024 - 10:24
      +3

      You know being a landlord used to be a profession, not a get rich quick scheme. It was something you did that built wealth slowly over decades, over generations. It wasn't something you invested in because "that's what everyone does".

      • ssfps on 02/09/2024 - 05:08

        Being a landlord has been a method of tax collecting from before the days of lords and manors.
        The only difference now is, the government is a bigger tax collector and the landlords (in aus) are smaller time (for now).

    • skidexa on 02/09/2024 - 17:30

      Can you share examples?

      I have heard that investing in property is popular due to ability to leverage

      • 7ekn00 on 02/09/2024 - 21:51

        I have done my example to death:

        https://www.ozbargain.com.au/comment/15638603/redir

        Sold properties, invested in land for carbon capture and capital gain, easily a 10x gain over rental income with none of the headaches …

      • arkie0 on 04/09/2024 - 09:19

        You normally start with your PPOR, your home you live in at 80% leverage e.g. 20% deposit/equity and 80% borrowed from the bank.

        Over time you pay down the loan it becomes 40% owned/equity, 60% borrowed/leveraged due to you paying down some of it and partly due to the value of the house increasing. Over the last 20 years the value of the house has increased.

        You then take 20% of the equity and use that as a deposit on a new IP.

        So now you have
        PPOR = 20% equity, 80% leveraged
        IP = 20% equity, 80% leveraged.

        Rinse and repeat - This assumes you have the income to service the payments. The risky part is you are highly leveraged and you need the value of the house to keep increasing to use this method. There's other factors like your income and whether you're positively or negatively geared to speed up the process.

    • shadyscab on 31/08/2024 - 22:10
      +6

      This is what is referred to as a "thought stopping cliche".

      Properly markets around the developed world have been impacted by a number of factors including over a decade of low interest rates, tax advantages, population growth, etc.

      Investors aren't entitled to profits, if someone overpaid or over leveraged, that is on them.

      https://en.wikipedia.org/wiki/Thought-terminating_clich%C3%A…

      • justworld on 01/09/2024 - 06:15
        +2

        No one is entitled to anything - a landlord isn't entitled to a profit and a tenant isn't entitled to a lease renewal.

        • hazzad on 01/09/2024 - 10:09
          +11

          Only thing id say to that, is that the landlord paid for the property, so its there's to do with what they want. The current state of play is that the Vic government is being very heavy handed with policy to try and force 2 scenarios, force short term leasers(Air BNB, etc) into long term lease or force landlords to sell in the hope a permenant will purchase the house. All of this to mask the fact that the state lacks the trades build at the pace to keep up with demand(mostly in part to the Big Build) and the Vic government has this silly plan to build/rebuild accomodation to house all these people. Neither of which are coming to fruition or this state can afford.

          I'll be transparent and say that we own a single investment that we use as a holiday home. We bought it in part for that reason, but also as a investment for ourselves and our kids as both my wife have been self emplyed for the last 20 odd years and dont put money into Super as paying back our mortgages was always our priority. I'll happily say that its hard to accept all these rules, regulations and tax hikes. We dont negative gear and never have, we dont yield any rent out of our property. We pay all the bills, rates and taxes. Yet we are forced to accept the concept that we shouldnt be allowed to use our home as we see fit without paying higher land taxes. There juse seems to be some belief that if you have an investment property, you must be rich and dont deserve to have it and someone else has the right to live in it. We are a single average income family.

          I get there is a shortage of housing but that isnt necessarily the fault of investors. Higher migration, lack of investment in required infrastructure and housing, construction red tape and constant waste on un-necessary Big Build projects also play a big part. Seems a little unfair to just go after investors to be honest.

          • justworld on 01/09/2024 - 13:29
            +3

            @hazzad: Yeah I agree with you - vic government mismanaged their budget and now all they know how to do is go back to the usual strategy of taxing easy targets.

            My point is that for all the people telling landlords to suck it up, no one ever seems to realise that everyone has to suck up life's framework in the same way. As a landlord, I now just have to diversify into other states - I deal with it. Similarly, tenants, and everyone else, should approach life's hassles with the same equanimity.

            • hazzad on 01/09/2024 - 13:51
              +1

              @justworld: Absolutely. For us having this invetsment property serves not only the purpose of securing our future but also gives us somewhere to get away to and create memories with our kids. We dont necesarily want to get rid of it and put our money elsewhere. The fact that it has appreciated in value is great but not really the main point of having it. We will never rent it out for the sole reason many others have pointed out and what we see, many tenants done give a hoot about someone elses place. We have rentals about us and they are all trashed. Not worth the hassle or tears.

              • justworld on 01/09/2024 - 13:53
                +3

                @hazzad: My experience is that there are good and bad tenants, but if you buy a decent rental property in a decent area, screen tenants carefully (always ask for a reference from the previous property manager - never accept anything else), and use the first 12 month lease to check for good/bad behaviour (issue a notice to vacate if you're not sure), you can mitigate a lot of the risks. There are plenty of good tenants out there.

                • hazzad on 01/09/2024 - 13:57
                  +1

                  @justworld: Im sure there are. But we arent willing to risk it, plus it was never on the books for us. We invested to much into this place for it to potentially get trashed.

          • kaleidoscope on 01/09/2024 - 20:35
            +3

            @hazzad: The problem is not everyone sees it this way… to them landlords are the evil and tenants have all the rights under the sun to do anything they want. The number one issue from what I see is lack of infrastructure development to support the record high immigration. Yet the people that are supporting these through investments are being punished for it.

          • p1 ama on 02/09/2024 - 01:35
            +2

            @hazzad:

            I'll be transparent and say that we own a single investment that we use as a holiday home.

            In other words, you have taken a dwelling off the market (or from someone who will actually use it) so that you can have access to it for several weeks per year.

            We bought it in part for that reason, but also as a investment for ourselves and our kids as both my wife have been self emplyed for the last 20 odd years and dont put money into Super as paying back our mortgages was always our priority.

            Sure, if you want an investment, you can invest in other assets if you are not happy with the regulations in property.

            I'll happily say that its hard to accept all these rules, regulations and tax hikes.

            Then sell up, it's a privilege to own an investment property.

            We dont negative gear and never have, we dont yield any rent out of our property. We pay all the bills, rates and taxes.

            As said previously, in other words, you are owning a vacant house that ought to be occupied.

            Yet we are forced to accept the concept that we shouldnt be allowed to use our home as we see fit without paying higher land taxes.

            Nobody is forcing you to own a holiday house.

            There juse seems to be some belief that if you have an investment property, you must be rich and dont deserve to have it and someone else has the right to live in it. We are a single average income family.

            Well that is the view of the Victorian people. As much as people like to whinge and whine about the Victorian government, the ALP won by a 55-45% margin state-wide in the TPP vote, with twice as many seats won as the LNP. This is a dominant victory reflecting the overwhelming view of the Victorian people.

            Ultimately, we cannot have it all the ways, we cannot have a system where rent is affordable, where house prices are affordable, and where everyone can own multiple properties and be off to the races. At some point, something has to break in the system that we currently have. We have a culture that is obsessed with hoarding real estate (just think about it, the idea of a holiday home is patently ridiculous from an objective point of view), and we have an expectation that our real estate investments will continue going up.

            We have to put the brakes on somewhere, and vacant holiday homes are a good place to start - they do not benefit renters, they do not benefit buyers.

            It's not a moral issue - I'm not coming at this from the POV that landlords are bad, and renters are good. It's an economic issue, where we've created a market that is almost like a ponzi scheme. House prices becoming more expensive, which allows people to borrow against existing houses to buy more houses, which drives up prices even more. All as banks are increasingly happy to lend more and more, forcing first time buyers into borrowing more and more, and creating a system where we cannot enact any policies to curb property prices, as a crash in prices will send vast swathes of the population into bankruptcy.

            I'm not having a go at you specifically, but you've benefited from this ballooning of property prices (and so have I), and I don't think very light touch policies which try to tweak the edges a little bit will hurt you as much as you are claiming.

            • justworld on 02/09/2024 - 01:59
              -2

              @p1 ama: It's not really an economic issue. People being forced to rent because others own multiple properties doesn't harm the economy.

              • p1 ama on 02/09/2024 - 08:18
                +2

                @justworld: It is an economic issue in several ways:

                1. People paying higher rents and / or higher property prices have less disposable income to spend on other things, which harms the economy

                2. Having such a large percentage of the population's wealth tied up in housing is an economic risk (it's basically undiversified investments at a very high risk of contagion if the market were to crash)

                3. As a population, it's forcing us to take on more debt, which increases our risk

                Either way, my point is that it's a structure that is unsustainable and at risk of collapse, which is an economic risk.

                The solution is not simple, and will require some people to give up some things. To the original point, holiday homes and vacant investments are a clear target.

                An overwhelming majority of people support vacancy taxes (e.g. for holiday homes or for foreign investors).

            • navshaf on 02/09/2024 - 18:43

              @p1 ama: "Then sell up, it's a privilege to own an investment property"
              I am happy to sell. When can i expect a 10% deposit from you?

          • Darude Sandstorm on 02/09/2024 - 16:52
            -2

            @hazzad: You paid for one, putting the price up, so I can't, and you don't even live in your house, just have it as a spare.
            Thanks.

          • BartholemewH on 03/09/2024 - 13:31
            +1

            @hazzad: 100% When I worked in tax, the vast majority of clients that had an investment was a single small house/unit at the coast that was not negstive geared. People whingeing about investors are likely whingeing about their aunts and uncles in reality, if not their parents.

            • CurlCurl on 03/09/2024 - 15:06

              @BartholemewH:

              When I worked in tax, the vast majority of clients that had an investment was a single small house/unit at the coast that was not negstive geared

              My daughter and and son in law have two rental properties. One in outer western Sydney, the other on the NSW south coast, Both with long term tenants. Neither are negative geared.

    • altomic on 31/08/2024 - 22:17
      +14

      reduced landlords = reduced investments = increased supply = decreased housing prices = increased FHB

      this is the best way to motivate tenants to work harder, work 2 jobs.

      they are already working 2 jobs to pay the massive rental prices that the "poor landlords" have to charge because "that is the what the market charges" .

      • AirbusA389 on 31/08/2024 - 22:39
        +2

        FHB itself is a subsidy that will drive up prices of new builds = higher rent prices.

        landlords are just passing on the costs — interest rates, land tax, insurance to tenants. no one is going to subsidise the tenants. it's a commercial decision where only numbers matter. tenants are also a number in landlords' pov.

        RBA is doing a really good job at driving up interest costs on the pretence of inflation, when our inflation is caused by corporate greed. The little man on the street gets blamed for "creating demand", where in reality more people end up homeless than ever.

        landlords had the ability to come up with 50-100k deposit for their investment properties when rates were 2%. they have their own owner occupied mortgages to service. they have been told: subsidise the tenants or sell up.

        yup they are selling up. let's hope they ain't selling to new owner-occupiers becos that directly reduces the supply of rental properties available. Hence i foresee within the next 12 month, there will be a massive squeeze on rentals properties and leading to a even higher rental price.

        • SBOB on 31/08/2024 - 22:41
          +10

          let's hope they ain't selling to new owner-occupiers becos that directly reduces the supply of rental properties

          Were those new owner occupiers previously living in cardboard boxes under the bridge, or would they be moving out of an existing rental and therefore doing a "-1" from the rental column while moving into their own house?

          • AirbusA389 on 01/09/2024 - 00:40
            -1

            @SBOB: with the influx of immigrants, would the "-1" from the pool of tenants be of any significance?

            most likely the new owner occupiers moved from a rental to their newly bought house. There is no net change in rental supply, just -1 from the rental pool.

            if the new owner occupiers came from a sharehouse (like i did), then there is no difference to the rental pool, just -1 house from the total number of rental houses.

            honestly, living in sharehouses to speed up saving for a deposit a lot quicker than having a 1bedroom unit to myself. i dont live in Vic, so i wont know what's the trends in Vic.

            that's why i said previously:
            the missing pieces of the puzzle: %renters vs %owners in every suburb today vs 12months ago, and %total renters across VIC today vs 12 months ago

      • CurlCurl on 01/09/2024 - 10:33
        +2

        reduced landlords = reduced investments = increased supply = decreased housing prices = increased FHB

        You're dreaming.

    • surg3on on 03/09/2024 - 10:42

      There have been massive rental hikes across the nation for the last 3 years…..

  • mskeggs on 31/08/2024 - 22:24
    +16

    If you are a landlord, and sell to a new owner occupier, doesn't their ceasing renting make it neutral?
    Or is the claim landlords ar choosing to leave properties empty?
    And is the property industry a reliable source?

    • Trying2SaveABuck on 01/09/2024 - 08:24

      If you are a landlord, and sell to a new owner occupier, doesn't their ceasing renting make it neutral?
      Or is the claim landlords ar choosing to leave properties empty?
      And is the property industry a reliable source?

      Most developments requires 75-80% of new dwellings to be sold prior to banks give builders approval without investors getting this projects off the ground is much harder and takes way longer

      in the long run less dwellings is bad

      However there is also the fair arguement less investors means less competition for current dwellings making it easier for FBH to enter the market the question is what happens to the states revenue when there is no long landlords playing high land taxes

      For the record im trying to stay neural on this - i didnt agree with the 'cash' grab tax on landlords Andrews put on that was simply unfair but at the same time i think properties uncontrolled apperication needs to be tapered off or slowed down

      • mskeggs on 01/09/2024 - 08:59
        +5

        So having the same rule for existing dwellings and new dwellings might not be a good idea.
        But we can agree existing buildings changing from rentals to ownership is neutral. So maybe tweak the rules to have a grace period for new builds or similar?
        And surely investor land tax is a drop in the bucket for state finances? It is very new, so not something that has been relied upon for decades.

        I actually think housing should be affordable for all, like food and healthcare, so don’t have any problem in making it a poor investment to drive away speculation as long as social housing or other alternatives pick up the slack.

        • arkie0 on 01/09/2024 - 11:39

          There are already rules for existing vs new dwellings for investors - There are a lot of tax deductions that are only available on new builds. Buying existing makes property investing highly unprofitable cashflow wise unless this is offset by high capital growth it's not worth it.

          It doesn't stop people from making "bad" investments into existing property though.

        • Trying2SaveABuck on 01/09/2024 - 14:58

          I actually think housing should be affordable for all, like food and healthcare, so don’t have any problem in making it a poor investment to drive away speculation as long as social housing or other alternatives pick up the slack.

          This is fair enough, although i think social housing needs to be reviewed i dont think the current system gets the best out of the social housing we have/will have in the future

          The social housing system needs to be more liquid and have far more transparency

          • mskeggs on 01/09/2024 - 17:57
            +1

            @Trying2SaveABuck: Social housing in Australia has become very broken. I like the idea of non-profit co-operative or community group owned housing, as is common in places like Vienna, as an option.
            The owner group has a long timeframe, is run for the benefit of the community, primarily the tenants, and the rent is kept fair.
            And over time properties get paid off and the proceeds can be invested in more housing. So eventually you have plenty of good quality housing renting for reasonable prices, which pressures the private market to stay competitive.
            It also sucks the air out of house speculation if it isn’t a path to investor riches, and you don’t have to buy to have a quality rental home with predictable rent and lease terms.

  • SBOB on 31/08/2024 - 22:37
    +21

    So landlords owning rental properties were happy to 'make gravy' while interest rates were low.

    Were then happy to increase rental rates (massively) when interest rates started rising higher as that's what the current rental market rates are/were (regardless of whether their investment property was mortaged to the wazooo or not)

    Now they are sad that their investment isn't making as much 'gravy' as interest rates remained high and there's taxes aimed to act as a disincentive against the increasing price of housing due (in part) to investment speculation.

    At what point do we realise that housing prices can't increase to infinity before we stop protecting investment property owners in cotton wool and stop trying to make housing investing as "safe" as bank interest?

    • AirbusA389 on 31/08/2024 - 22:40
      -2

      would you take losses if you have an investment property yourself?

      • SBOB on 31/08/2024 - 22:44
        +20

        No, but I also would probably be a grown up and realise that investments are not meant to be guaranteed returns

        If I have, for some reason, over leveraged myself getting into an investment in the hopes of 'gains', then I have to suck it up if my leveraging results in no or negative gains.

        Complaing that your incomings or dividends on an investment can't cover your costs (after negative gearing), while also investing in a market where you're also hoping to make the ongoing (sizeable) capital gains that housing as continued to have…well, my violin can only get so small.

        • justworld on 01/09/2024 - 06:16
          -7

          no point getting emotional about it just hike your rent to market rate and move on.

        • CalmLemons on 03/09/2024 - 23:07

          That's only the portion of investors who are minor players and have properties in less than ideal areas. They are the ones that are forced to sell when the interest rates go up, plus land taxes etc. These are the people news.com love talking about completely out of context.
          These are the properties FHB normally buy but also a huge part of the rental market.

          The proper investors understand/will have calculated that buying an investment property in the hope that you can make money from rental revenue is a lie are the ones that have the ability to hold onto the property for longer term CGT gains. These are the $1.5m+ properties where you are losing money in the hopes of 7-10% cgt returns p/a. And generally FHB do not buy these properties not are they a huge part of the rental market.

      • brad1-8tsi on 01/09/2024 - 00:15
        +5

        would you take losses if you have an investment property yourself?

        I did. I dropped ~10%. You just suck it up and hope to learn from it.
        I've lost worse on shares but the wins counteract the losses (mostly).

        • AirbusA389 on 01/09/2024 - 00:42

          not everyone thinks that way. try telling that to Coles and Woolworths.

          • brad1-8tsi on 01/09/2024 - 01:05
            +3

            @AirbusA389: I don't see the correlation between an average chump like me doing share or RE investment and running a (near) monopoly grocery business.

            • SpainKing on 02/09/2024 - 10:08
              +4

              @brad1-8tsi: Ignore him, he shifts the goalposts for his argument to suit whatever boogeyman is currently his ire (immigrants earlier, Coles/Woolies now, whatever the media says you should be upset about next). It's just throwing out random arguments so he doesn't have to engage with the topic at hand

      • cfuse on 01/09/2024 - 12:34

        What percentage loss is required to get people to stop whinging about reality?

        • justworld on 01/09/2024 - 13:48

          Not sure. What yearly rental increase would it take to get a tenant to do the same? Or do you think it only works one way?

    • cfuse on 01/09/2024 - 12:33
      +2

      No government is going to shank the investment property market. That won't win them any ground with anyone that matters to them.

      As long as more than one person wants something then the price is going to trend upwards. If it is borderline impossible to devalue the underlying commodity then expecting it to drop in price, with or without government fiddling, is wishful thinking.

      • AirbusA389 on 01/09/2024 - 13:07

        state govt has direct interests in property values via stamp duty and land tax. a booming property market is the hallmark of a healthy economy.

        crash the property values = crash the state govt and all banks in au, especially CBA.

        that being said.. i still think the Vic situation is somewhat the beginning of a bigger plan that we are not aware of.

        • cfuse on 01/09/2024 - 14:21

          Politicians have a direct interest in whomever gives them kickbacks, deals, or threats. No pollie is getting rich off state revenue, that goes back to the state.

          We are hardly the only country to have ever had to deal with a surfeit in affordable real estate. Maybe now is a good time to explore a bit more than just the buy or rent, house or unit mentality. Surely people can think a bit harder than a everyone homeless or nuke the economy false dichotomy too.

      • TSH on 03/09/2024 - 09:29

        Maybe not shank.
        But maybe a slow tighten your balls in a vice. They want to see how much you can bear before your nuts pop.

  • DingoBilly on 31/08/2024 - 23:31
    +25

    Lmao, when your sources are real estate agencies of course they'll say it's terrible. Like asking a cigarette company whether vapes are bad.

    As a prospective tenant in Victoria it's been great. Prices are down where I'm looking and it's far more affordable to find somewhere where I want. I'm specifically thinking to move to Vic as the housing market seems to be stabilising and be in a great position if you want to live there. If I compare to Brisbane it's awful, would hate to be buying there atm.

    I'm also a landlord myself, and as others have said, who (profanity) cares about landlords? Investments aren't meant to be risk-free amazing returns infinitely and the housing market in Australia is stupid and way over-priced. Changes like the ones made in Vic so far seem to only be helping drive prices down which is great. Hopefully other states also introduce similar so we can make housing more affordable for people across the board instead of just making investors happy.

    • JimB on 02/09/2024 - 12:08

      Are you looking to by or rent in Victoria?

      Brisbane looks so expensive to rent.

  • justworld on 01/09/2024 - 06:14

    Not worth buying IP in VIC with the higher land tax and harsher rental rules. Just buy 1 IP per spouse in each state to spread out land tax burden and avoid VIC where possible.

    • joka on 01/09/2024 - 07:53
      +9

      I don’t have four extra spouses.

      • justworld on 01/09/2024 - 13:49
        -1

        Between you and your spouse you can buy 12 properties in Australia and still pay land tax as if you own only one property in each state so I think that is sufficient. I would be happy with 6 properties myself.

        • eek on 02/09/2024 - 09:42

          One would presumably have to set up multiple companies or entities with trust agreements between them to "own" properties to avoid land tax?

          • justworld on 02/09/2024 - 09:55

            @eek: No, just buy them as an individual. States' land taxes do not overlap, so you are treated as owning one property in each state, which is not too bad as land tax is progressive.

            • filmer on 02/09/2024 - 10:04
              +2

              @justworld: You can even maximize it as some states you could probably get 2+ IPs before being hit with land tax

        • Darude Sandstorm on 02/09/2024 - 17:52

          everyone missed the joke, sorry you were downvoted

  • joka on 01/09/2024 - 07:51
    -2

    There is no housing crisis, just renters trying to get into fancy suburbs which they cannot afford. They’re the ones making all the noise.

    I had a new(ish) townhouse up for rent, all the luxury items: parquetry floor boards, plantation shutters, huge kitchen with 90cm appliances… it spent three months on the market. Yes the location wasn’t desirable but it wasn’t the worst either.

    • Hardlyworkin on 01/09/2024 - 09:41
      +11

      Ok everyone, based on this one landlords experience there is no rental crisis. So how much over priced was the place?

    • Jolakot on 02/09/2024 - 01:39
      +6

      Those 'fancy suburbs' used to be affordable places to live, like Coburg and Northcote

  • loadofrubbish on 01/09/2024 - 07:54
    +1

    Internal migration out of vic (people leaving) slowing down and international migration increasing to VIC. Most international migrants to VIC are students. I am no hosing expert but this combined with less rentals should drive rents up? it is awesome that you can still rent a 3 bed room house in Geelong outer suburb (eg Bell Park) for $450 - $430 per week.

    • fickre on 02/09/2024 - 16:49

      my current rent in geelong CBD, (townhouse, two storeys, terraced house, 10 minutes walk to westfield) is $430/week.

    • CommuterPolluter on 03/09/2024 - 12:33

      Just bought a house. Pretty substantial increase in rent listed for where we used to live.

  • pegaxs on 01/09/2024 - 07:57
    +1

    Gotta be a tiny violin deal post here somewhere… Just wait to hear them squeal when there is talk of ripping out their golden parachute negative gearing to try and fix this Ponzi scheme called "the housing market"…

    • larndis on 01/09/2024 - 09:03
      +2

      You counting on Albo or Dutton to change negative gearing?

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