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17-05-2017, 04:55 PM | #1 | |||
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The buyer and seller sets the price.......if there's no willing buyer, the property won't sell regardless of what the vendor (or THEIR agent) wants. Housing affordability is a combination of factors: 1. Supply and Demand...prices are higher where people want to live (currently Sydney & Melbourne). This also varies between types of properties and the popularity of Suburbs. Apartments are more affordable than houses because they are currently making more of them and they are not in short supply. 2. Available Credit.....it's been relatively easy and reasonably cheap to borrow money. If that changes, so will house prices. 3. Overseas Investment......we are seen as a solid and stable place to invest, so money has flowed in and pushed up price. But this also connects back into supply. If the supply of homes was greater than the demand, prices would fall. It's the big cities that have the supply problem and therefore the high house prices, it's not as bad in the regionals. The government needs to create more housing stock in the city by re-zoning OR encourage people to move to the regionals. Commuting around the city is becoming difficult already, so regional cities would be a better solution but jobs will need to be created. Private business will only move there if Government departments move there first (creating populations to do business with). Unfortunately first home buyers need to realise that the may need to start with something in the less desirable suburbs/areas and work their way up (and that's always been the case even 30 years ago). Without negative gearing, there would be a real shortage of private rental accommodation, it would be a disaster. Capital Gains Tax came in in 1987 and was originally discounted for inflation but became difficult to calculate so they made it apply to 50% of the gain which is a much clearer formula. Developers are not the bad guys either, they have to risk large sums of money and navigate plenty of Government red-tape to create blocks of land. When the market collapsed in the early '90's the majority of them went broke, and some never recovered. If development land was more plentiful (cheaper) there'd be more blocks for sale, more houses built, therefore less competition for each house, therefore more reasonable prices. Simple economics.....the price of anything rises when demand out-strips supply. |
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17-05-2017, 08:39 PM | #2 | |||
FF.Com.Au Hardcore
Join Date: Jun 2013
Location: Adelaide
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The other chestnut I hear is that the govt need to release more land. Land must be developed in parcels as the cost to do so is very high, developers won't carve up every square inch of available land just so the poor people can have a block at a 40% discount, they'll go broke. Argue all you like about how many years income a house is today, 40 years ago our parents all scrimped and saved to buy in what was then underdeveloped, less desirable communities.
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17-05-2017, 10:07 PM | #3 | |||
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If you look at the type of house available in the outer suburbs in the 50's it was usually 2 or 3 bedrooms, 1 bathroom , basic weatherboard (half the size of today's homes). The 50's first home buyer realised it might not be close to shops, schools and parkland and many of the new estates had unmade roads in those days. They bought furniture gradually and didn't just put it on the credit card. Their kids often shared bedrooms and the family only had the one car. Compare this with the expectations of today. I'm certainly not having a go at the first home buyers of today, but many have had a 3 month trip to Europe before starting to save for a house (something their parents wouldn't have done)....sometimes you can't have everything....but please don't complain about the older generation, when you are earning a lot more than they did. These days, the outer suburbs of the 50's are now the middle suburbs and are no longer affordable for the young, unfortunately, the young home-maker is going to have to do their time in the outer suburbs until they can afford something better (just like we all had to). (yes, I know there were cheap inner suburbs in the '70's but they were horrible then with no services...people took a chance, moved in and fixed them up) maybe the next generation may need to look outside the square and 'fix up' some country towns....they've usually got great old pubs and historic buildings, existing school, maybe even a railway station to the city. Maybe this could be their chance to 'think outside the square'....we all can't live in the trend inner city and it's becoming to crowded anyway. |
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19-05-2017, 09:09 AM | #4 | ||
FF.Com.Au Hardcore
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My grandfather spent a fair bit of time in Europe before building a house back here. Most of his European trip was spent running behind a tank though.
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17-05-2017, 11:08 PM | #5 | |||
FF.Com.Au Hardcore
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Have a look at the graph titled 'Number of taxpayers earning a rental profit or loss'. Note how the number of negatively geared investors soared after 1999, the year the CGT discount was introduced. |
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17-05-2017, 11:50 PM | #6 | |||
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At least now, investors pay tax on 50% of the total gain in value, regardless of how long they've held it. Prior to 1999 there WAS a 'discount' on the CGT you paid, but it was linked to the inflation rate (in fact it was a sizeable discount if you'd owned the property for 10 years as total inflation over that time could be used to reduce the 'profit' they calculated the tax on). By removing the 'inflation over the total period' discount and replacing it with a 50% discount regardless of how long you owned the property, it costs investors more the longer they hold it.....and earns the Government $billions. $Billions more than when there was no Capital Gains Tax prior to 1987 (ie Zero). Lets get it straight, property investment can be risky, but does have it's rewards for those taking the risk, but it also earns the Government plenty of money through CGT. Personally, I'm not a big fan of negative gearing as I don't think you should be allowed to claim expenses that exceed the income on the property....that means other tax-payers are subsidising your investment. The investment should be able to stand on it's own two feet. But we need private investment, otherwise we'd have a massive shortfall in rental accommodation and society would struggle to cope with that. |
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21-06-2017, 04:51 PM | #7 | |||
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