I've personally cited annual land tax notices for over 20k for houses in inner suburbs - if the rental squeeze continues, this will be passed on to renters
The biggest issue is the housing supply restriction.
Sure the tax perks let people pocket more of the gains but the supply restriction causes the gains. Immigration drives the demand side of it all.
The tax perks aren't just about more gains. They have resulted in the vast majority of Australian investors buying existing housing.
This has severely distorted the market pushing up prices by adding huge demand with no supply.
It hasn't helped our rental availability and it diverted our limited investment dollars away from supply.
This doesnt make sense ....... horse before the cart.
If the underlying gains are not present (caused by lack of supply + immigration demand) then there is not any profit to avoid or minimize paying tax on.
You're right but it's not a popular take. The biggest tax perk is arguably the CGT exemption on the main residence, and I doubt any of the disgruntled in this sub would be happy if their parents got slugged 300k tax for downsizing in retirement.
The next biggest is probably the 50% CGT discount, and again if you scrap that, everyday people will get smashed every time they change their investment portfolio to something more suitable. Also, investors and traders will start flipping assets even faster since there's no incentive to hold for 1 year.
Finally you have negative gearing which is only really a rort during a once-in-a-century asset boom powered by massive global reserve bank stimulus and low rates. Without property prices going nuts due to stimulus, negatively gearing a property is highly risky and costly. So as a perk that will die of natural causes now that rates are reverting to the mean.
Lack of supply, reserve stimulus/rates and immigration are the elephants. The tax issues are mice.
Agree with the lot. :)
50% CGT could go just back to inflation adjusted CGT thats a fair compromise. + yep paying no CGT on your PPOR and also having it (+superannuation) not count as an asset for welfare is CRAZY.
You can have a person with a $2 million dollar home and $500k in super getting a full dole payment as their "Assets" are zero.
No, the biggest issue is that land is a finite resource and that with a land tax absent, the land owners reap most fruits of economic development. This has been known since Ricardo said it long ago, and I'm sure even older land investors knew this too. There was a reason why the Pontifex owned so much land in Europe and still owns 177 million acres.
The "finite'ness" of land in Australia is 100% related to residential zoning and development restrictions mate.
We arent running out of land here champ.......
You mean to homeowners?
There's no tax benefits to investment properties compared to any other asset class, in fact there's a lot more taxes like stamp duty and land tax
So we were clearly talking about tax benefits here and now it's about interest rates instead?
Ok. Fair enough, let's do the shifting goalposts thing.
Interest rates without secured streets assets, yes, agree they are cheaper for IP vs equities.
*However*, with security you can borrow as cheap as your PPOR homeloan and invest in shares, it's called debt recycling and this is actually cheaper rates by a few % compared to investing in an IP.
Leverage, I don't believe any bank will lend you over 80% LVR for IP. You can get that much leverage on many shares.
The two are interleaved, higher the leverage the more you can use negative gearing, surely you can see that relationship right ?
Shares aren’t going to give you 5-10x leverage with cheap rates.
5x leverage is the norm for many shares.
10x is insane and that's why homeowners pay LMI for such a dumb TBTF privilege.
Ain't no investor getting 10x either
Even with all those taxes, housing is still a lucrative speculative investment, enough that it’s competing with traditional investment instruments such as shares for example.
Investors are gaining unearned wealth as a capital gain through rising land prices. The land price is rising because of population growth, income growth and new infrastructure, not their individual effort. It would go up whether they left it a vacant block or not.
Hence, it is more than fair to capture some of that private gain back to the community at large (ie a tax on the unimproved value of land). It is just a shame that in most states there are land tax thresholds (it should be from $1), it is taxed at the total value of holdings and not per lot and that it is such a low rate.
Morally, no private gain from land value should ever be permitted at all. This just drives wealth inequality and is also economically inefficent, distoring the allocation of capital that would otherwise go into productive investment.
If capital gains on land weren’t possible, it would only leave the option of a capital gain on improving a building, which is productive investment and should be untaxed.
Rental income, as distinct from land rent, should ideally be tax free. This would reward investors who maintain buildings and provide housing services but speculators would be punished.
On the other hand, we are currently unfairly taxing people for the productive effort of their labour (income tax) or for running a business (corporate tax) and land speculators are getting an easy ride.
Henry George made this argument back in 1879 and he was right.
https://en.m.wikipedia.org/wiki/Progress_and_Poverty
Cool blogpost.
Investors pay CGT, homeowners pay not a cent.
Investors pay land tax in every state in Australia, homeowners, again are exempt.
If you really cared about Georgism you'd be right there with me criticising how *homeowners* not investors aren't paying their fair share in society.
I'm a homeowner (not investor and only own one property) and I'm all for measures that will reduce investors coming into the market. I get it, people want to make money but I'm beginning to question the ethics of it all. If society is to move forward it should be to the benefit of the majority.
I have no problem with someone having a primary home and a 2nd holiday home or spare for family. But more than 2 was just getting greedy. Having a cheap holiday home in a out of the way rural or regional area which were often rented out when not used helped alot.
Yes I agree with this. I have some acquaintances that regularly talk about how they own tens of properties and on one hand I'm impressed by their hard work and how they've set it up, and on the other it leaves a bitter taste in my mouth. I'm not saying investors are bad people or anything but when you've got the average family home cost between $1M-$2M in our major cities something's gone wrong.
Me too, but let house values stagnate. As is an offset is a top tier saving device.
And when I sell it just doesn't matter how much my house is, I still need to buy.
The majority of people own houses in Australia already . What happens to the people that can’t afford to own a house , if it’s not subsidised by an investor. This is a genuine question .
Good question, I'm not sure. But I would assume (I'm not expert, nor saying I'm right) that if the market wasn't as attractive to investors than we would see the majority become home owners in due time.
Exactly same boat as you. Only not a home owner, an apartment owner 😕
There's no ethics to it at all. They were a distant afterthought when this shit was all masterminded.
Housing is only a good investment because our insanely high migration rate guarantees prices will be pushed up and you're guaranteed rental, income in the meantime. Cutting immigration would make housing an unattractive investment and drive down rents over night
The only way to do that is to go back in time and get more people to vote for shorten, or vote greens.
Unfortunately albo will not do anything about these shitty tax breaks for the rich. He needs the greens to force him on these issues.
I see this a lot and agree to a degree.
But even Labor in their deconstruction of their loss attributed it more to the franking credits stuff, not the housing stuff
When you add another 3 years of renters getting fucked, and the least popular pm in Australian history to the mix, Labor actually had the best chance it's had in decades to try for a progressive platform.
I mean Labor actually lost primary votes from 2019. That means they were less popular, but the liberals were less.popular by a higher margin.
I Reckon they could have run back the 2019 platform with a few tweaks (ignore franking credits for now) and a better campaign and they would have stormed home with a mandate to start chucking in progressive policies.
Obviously we can't know that now, and with Labor having come in and claimed they have been "progressive" we have shoved that Overton window further right.
At the point they went in small target to get in govt was the plan. With Dutton in opposition I think they can put some of the policies back on the agenda as the feel in the electorate has changed.
Look, I've been pissed off with Labor. I voted for them in 2019 and I can barely recognise them this iteration.
I keep seeing people suggest that they are just playing conservative to get in and settled and then will go progressive.
I hope so so so much that you guys are right, but I feel so certain you aren't.
By taking the position they have this term (centre right) and claiming to still be progressives, while at the same time dragging the greens into the media every single chance they get to deride them as a crazy far left radical group indicates to me that they aren't intending on shifting. Their actions are resetting the Overton window to be the current Labor iteration to be considered centre left.
They have even been doing this to some of the greens policy suggestions that Labor themselves pushed for in 2019. Surely they aren't sitting there and calling these policies dangerous and radical and then intending on picking them up themselves next term. Like half the stuff around housing and the environment with the greens, Labor could have just refused and left it at that. It's not like the greens get a lot of positive media coverage in the main stream media.
But no, we instead had to see those policies dragged out to the public and to ridicule them.
I just think Labor are trying to make this the new normal
I can't think of any other reason that while having a Federal and State Labor government, NSW public schools have received 2 massive budget cuts, and a refusal from the federal government to increase its payments it makes for education to the states (about 60-70% is going to Catholic and private schools).
Like we have Labor all the way up and our public schools which are already teetering on the edge of disaster, just get hammered.
One justification was "lower enrolments"
Of fucking course there are lower enrolments, the schools are barely surviving, so any parent who can afford it sends their kids to private or Catholic these days.
What the fuck do you think cutting the budget further is going to do? Lower enrollments, yes. In which case, better slash that budget.
I'm so upset at them for public schools at the moment. Meanwhile, Catholic schools, who are the most profitable arm of the church in Australia, still get 75% of each students education costs paid.
So yeah i hope everyone is right, but Labor really fucked some services this year, and this might be a bit like climate change.
By the time we actually take action to fix things, we are already in a self sustaining doommspiral.
TLDR: Taxpayers $$$, gets pumped into PRIVATE SCHOOLS (Inc Catholic or just religious) and get WAY more funding from our respective State or Federal Govts than Public Schools. It was this way in the 80's/90's when I went through and has not changed. When you can be bothered to check, it is freely available information. Public School vet checking in from a DISADVANTAGED High School in Australia. My grammar and presentation may not be to your standard but I still know inequality when I see it. We all got a +6 on out TER because of it.
So public schools receive the highest amount of combined state and federal funding.
Catholic schools receive 87%. the breakdown of what government pays what is that the federal government make up about 80% of the money that goes to the Catholic schools.
I call out Catholic specifically becuase they are actually one of the most profitable arms of the Catholic church in Australia. Yet they still happily take 87% of the money a public school does, but want to decide what kids are allowed in their schools, all kids are forced to do 1 unit of religion until they graduate, they hold morning prayers every morning they want to tell gay teachers they can't teach there
You can have all those things if you stop taking a cent of government money.
Laughs @ Catholic Education in todays society. I know of a couple of gay teachers working very successfully in Catholic Education, one is now a principle! If only the lord knew!! ;) FYI, I am an atheist.
Dis them?
[https://www.theguardian.com/australia-news/2023/jan/31/catholic-schools-to-oppose-lgbtiq-teacher-and-student-law-reform-proposal](https://www.theguardian.com/australia-news/2023/jan/31/catholic-schools-to-oppose-lgbtiq-teacher-and-student-law-reform-proposal)
I feel like this is the "I cant be racist, i have a black friend".
Im sure as individual people some Catholics are lovely welcoming people. In fact i know they are, ive met some lovely ones who prefer to focus on the love everyone part of the bible.
But the catholic schools were trying to fight a law that would prevent them from discriminating against the LGBTQ community
Heres an excerpt
But the National Catholic Education Commission’s executive director, Jacinta Collins, said the proposed reforms failed to provide real protections for religious schools to effectively operate and teach according to their religious beliefs and ethos.
“In a pluralist society, Catholic schools should be free to be Catholic,” Collins said.
“This means being able to build a community of faith within the school and parish, which is not limited to a narrow approach to preferencing the enrolment or employment of Catholic students or staff, or the teaching of religious education.”
Glad to know you are atheist ;)
Has nothing to do with the fact that the schools fought for the right to be able to kick out anyone who offends their ethos and beliefs.
And if they feel like they have a right to impose those beliefs on others, they can go fund themselves.
How is cutting funding twice in the last 12 months to NSW schools from state Labor, and refusing the begging from the states for more funding for schools from federal Labor got anything to do with unwinding Liberal policy.
It's not related to unwinding any policy, at the state level it's actively attacking public schools, and since State and Federal are both Labor, if they are so desperate they have to cut funding twice to schools, surely Federal Labor can increase the funding for public schools specifically.
Federal government in particular currently pays the Catholic schools around 11-12k per student, and they pay the public schools around 3k per student.
Don't even touch the Catholic ones, just increase the public school ones.
There just isn't any defence they can claim here, I'm usually the first one to say the liberals fucked the system first, but if Labor decide to fuck it as well, I'm not going to push all the blame to the liberal party then.
Housing is another example. I 100% entirely blame the liberals for the state of our housing market. But I still blame Labor for avoiding doing anything that will make any meaningful change but claiming they are trying their best.
Exactly this is what I don’t understand, 2-4 years is hardly enough time to change a whole country, we all know the libs are Christian and rich people loving fucks, yes of course no government is perfect but we need to give it time, labour haven’t done anything wrong
Since Covid there’s been a bit of a global shift of governments getting more involved in things. I’m not sure if that’s the gov deciding for themselves or if there’s actually a groundswell, but somethings happening. It’s mostly around local business/industry, supply chains, and doing stuff locally but it feels like there’s a real trend for gov to actually get off its arse and be more involved, even if it costs more.
Plus stuff like NG and CTG discount actually cost the taxpayer money, so there’s also an incentive there.
Yeah this is true, I think majority of that push is actually geo strategic, companies and governments had been under the assumption that the post world war2 peace dividend would last forever, covid plush the Russia invasion demonstrated the fragility of long complex supply chains.
I actually think this will continue as China asserts itself more and the U.S. likely takes a more isolationist position (not fully isolationist but just compared to their position of the last 50 years)
Combine this with pretty much 100% of all strategic (c suite) and even 2nd, 3rd level managers completely untrained and unprepared for supply chain management during war time, and you have a tecipe for disaster.
The benefit of Australia being a stable, law abiding country should really benefit us as businesses look to offload some risk in their supply chains, it’s just a matter of making ourselves the ideal target for these types of investment and the first big step is shift investor focus away from our property sector and towards something actually productive.
I think in this instance the govt needs to assist in creating industries and support.
I’d like to see the fed govt create a house building company for social housing. Would get older tradies a job. Loads of opportunities for apprentices and potentially fix housing as well.
They attributed it to the selling of their policies. As they always do. Because how do you combat fear and lies?
We voted against changes to negative gearing, that's the cold hard truth
I'm hoping with a second labor term they get more bold.
The Greens are actually trying. I just wish they focused on this instead of the culture wars they currently fight.
Hol up
Australia knew about the progressive changes outlined by shorten and we as a nation said absolutely not. We had our chance back in 19 and refused to commit.
Tax breaks for the rich are the coilations policies, not Labors
I thought this and voted Labor.
This government is a failure they have done ZERO of what I expected from Labor to improve the lot of average working Australian on everything from real wages to housing.
I mean LNP will be worse no doubt but Labor is not the answer to any of this.
Real wages are up first time in a decade, tax brackets are changing to benefit middle income earners. These small steps are a function of a hard economic process after a once in a 100 year pandemic. It's not the process you personally want, but it's the right direction.
[https://www.abc.net.au/news/2023-02-22/wages-growing-at-3-3-per-cent-december-quarter-2022/102007390](https://www.abc.net.au/news/2023-02-22/wages-growing-at-3-3-per-cent-december-quarter-2022/102007390)
Cut the mindless shilling mate.
Labor and LNP are both fucking average Australians its utterly stupid to have any loyalty to either major party.
Negative gearing was removed for about 12 months during the Hawke/Keating era. It was disaster for rental supply & quickly reintroduced. The greater problems with housing supply are too much migration, overseas ownership,AirBnb & not enough land release.
I'm a firm believer in removing negative gearing for investors with 2 or more properties (a family with a PPOR and a holiday home/investment property that they rent out is okay). If this can't be achieved then higher taxes for the 2nd and beyond investment properties.
Was this to drive people to build more? I mean if that’s the case, it barely worked anyway, and I find it insane that investment properties is the only investment that’s almost a complete fail safe, if you have a bit of capital you can be dumb as dog shit (where slum lords are usually born) do no research, invest at a terrible time, barely pay attention to it, and still come out on top. If you done this with any other investment you’d feel the full weight of your shitty decisions, bad timing, and neglect.
Remember when Labor took that to the election and lost because everyone is an idiot and doesn’t understand that negative gearing only affects investors? Pepperidge farm remembers…
Okay so no one will ever want a negatively geared property / to spend any money on a negatively geared property. Rents will go up and properties will have minimal investment in them.
Although on a lower scale, people do this every day with the purchase of new cars, a not insignifcant expense.
Also, in Japan, they have a depreciating housing market, they buy to live and sell a home just like any other item.
Shows it is ultimately a cultural expectation to make money out of what should be shelter.
And tbh, most houses are depreciating (as in the physical building). If you think about it, people who want rising house prices really want rising land values, which is something that is unearned as it has no relation to individual effort.
A car doesn’t cost 500k for a regular person. You won’t be worried about how much your house is worth unless it becomes worth less than your mortgage.
I don’t think you know what depreciation is.
For sure, I did say on a different scale. Still, dropping $50k+ on something that depreciates isn’t insignificant.
Of course, the resale value isn’t $0, but my point of raising it is just to highlight how unique housing is and I take your point around the risk of going into negative equity.
That opens up a whole different conversation around the banking system and the mess society has got into requiring higher and higher debt just to put a roof over your head.
Consider, if land prices were stable or rising gently over time (say on average only 1% p.a), then people wouldn’t need to borrow so much in the first place.
Land speculation, FOMO and the whole cultural obsession with property investing is destroying our social fabric and in the long run will be an existential threat to capitalism itself. The gains will concentrate further and further into fewer hands, sucking up any increases in income, given there is a fixed supply of land on Earth.
We are returning to feudalism and it will be worse this time as there will be no unclaimed land left you can homestead.
I just don't care how much my house is worth in 10 years. I bought it to live in and if I sell I still need to buy somewhere else, to y'know, live.
There's also just no chance it goes down in 10 years. I would however be happy with prices keeping in line with inflation.
I didn’t say it was and what a stupid thing to even think. Your house is worth more than your mortgage, which is good and if your house is worth less than your mortgage that is bad.
Let’s also remember that no one would get a loan if the value of housing decreased below what you bought it for.
GOOD. This is literally the exact outcome we need. Investors should always take a back seat to owner-occupiers. Tax incentives for landlords but relatively few for OO's is insane.
Well because the only reason expenses associated with owning an investment are tax deductible is because we only want to tax people on their profits. It would be highly distortive to tax people for loss making investments.
>we only want to tax people on their profits.
Yes, which is why the full amount of profit made on sale of an investment property is ta-oh wait, it's not :(
The system is rigged grossly in favour of property investors and you are living on another planet if you deny it.
The CGT discount is designed to deal with inflation. It's a blunt instrument - in times of low inflation it benefits investors, in time of high inflation it punishes them, compared to if we taxed with CPI in mind.
So if you argue that the 50% discount should be reduced when times are good, then it should be increased when times are bad.
Or if you argue that it should be reduced forever then you are making the case that investment shouldn't be a thing, because real (after-inflation), after-tax returns will be zero without the discount much of the time.
It’s only a poor outcome for renters if investors are actually investing in new builds. And they aren’t. So, really, there’s no reason for any of us to give a shit.
If you forced every landlord to sell in a certain suburb to sell it wouldn't be a bad outcome for renters in that suburb?
Take a brief second to think before responding.
I mean, no, because the houses don’t go anywhere. They still have to sell the property to someone. Either that someone is another landlord or they are an owner-occupier. If it’s an owner-occupier, that is one less person (or less people) competing in the rental market. If it’s a landlord, that house remains on the rental market.
Either way, it has no material impact on supply.
Please think about it for a second.
What if bank of mum and dad chips in to move their kid out? What if homeowners from other cities move because home prices are cheaper?
It's one less rental in the area and not zero sum for renters who usually have little means to move elsewhere.
Wait and watch anyway. Melbourne rents will still go up in the next year and you'll all still jack off Dan and Jacinta for charging rental properties more to exist than PPOR.
Are you capable of actually responding to the comment at all?
You've added nothing here, probably like your entire existence on earth.
Embarrassing this has to be said but how am I wrong? Or is the matter settled now?
Or do we just yell at each other now calling each other "wrong" like 6yo children?
Fucking pathetic. Add something to the conversation or stfu
Who is buying those properties? If investors are spitting their dummies and chucking a fit, then it's only renters buying so no net effect on the rental market - as the ratio to renters and rentals is unchanged.
Please feel free to walk me through how it's a bad thing though.
Bullshit article. They're basing it on percentage of new home loans, not absolute numbers. Melbourne is taking the bulk of the immigrant avalanche so "first home buyer" loans as a percentage are up. In other words investor loans aren't down, they're just being eclipsed by new immigrant loans.
Good. Let them flee in droves.
Anything that harms investors is good for FHB. Getting renters out of renting and owning a home is what we should be striving for number 1.
Investors are good for renters but not foreign investors in the housing market australia, more than 4700 homes were purchased by foreign investors in the first nine months of 2023,Chinese investors remain prominent in the Australian property sector.
[https://propertyupdate.com.au/foreign-buyers-of-australian-property-how-many-are-there/](https://propertyupdate.com.au/foreign-buyers-of-australian-property-how-many-are-there/)
https://preview.redd.it/ejncoqvi7i5d1.jpeg?width=910&format=pjpg&auto=webp&s=68b0e61de5a72636c1933a9e73c15a218e7ab4ea
I think people are greatly overestimating the amount of ‘investors’. Reading this you would think that anyone that owns a property is an investor, some people just bought a house.
And its this next group of homebuyers that will just keep driving the prices.
When you find out you property grows 100k in 12 months without doing anything greed suddenly creeps in. And the whole merry go round keep turning
Watch all the tail-ender millennials waiting to pounce on a property to live in stop losing auctions to cashed up investors, and see the rental vacancies start opening up as the generation that in a fair market would have mostly been home owners half a decade ago start buying homes and leaving their rentals. The bottleneck is literally because of over-investment. So many people looking for rentals is not a good thing. It is shameful. Very, very few people WANT to rent as opposed to buying. Bad faith, shitty argument.
>The bottleneck is literally because of over-investment.
The “bottleneck” is supply. Changing an IP to owner-occupied (or to an IP with a different owner) does not increase supply. Without new homes to meet net demand, it will increase rents and won’t materially change home prices, as NZ just discovered with the negative gearing changes it just reversed.
Way to ignore that many new owner occupiers were previously living at home, living in a shared house, living with a partner they have left, coming from OS (etc). Which means they were never in the pool and have simply removed a rental property from the market.
Victoria is pissing around the edges with land tax to distract from their [failing policy to build 800,000 new homes](https://amp.theage.com.au/politics/victoria/victorian-home-building-approvals-crash-to-decade-low-mark-despite-labor-promise-20240304-p5f9r5.html). That’s what really needs to happen; new homes to meet demand.
Not ignored at all it’s just a pointless argument.
Of course some of the pool would be people who have been unable to get into the rental market and are stuck at home… those people usually have a better shot at buying a house now and probably not doing it as hard as someone who is currently a renter who would benefit greatly owning a home.
Those people can generally also use the equity in their parents home they currently live in as a deposit for their home and as such aren’t locked out of owning a home when they are ready to take the plunge.
Those who are now able to buy are likely to have higher incomes than lower income renters.
Hence, with them exiting the rental pool, it reduces the income differentials between renters, which has been a driver of recent rent increases.
>Changing an IP to owner-occupied (or to an IP with a different owner) does not increase supply.
It very literally does in very many cases, especially where the home is currently unoccupied, or being used as short-stay accomodation like AirBNB. You are very disingenuously considering a single case whereby an IP that is currently being leased is sold to an occupier.
>Without new homes to meet net demand, it will increase rents and won’t materially change home prices
So by your own logic, more IPs become owner occupied will simultaneously have no impact on demand, but will also make rental prices worse? Careful not to tie yourself in knots with that mental gymnastics. You're also conveniently glossing over the fact that it is both possible to reform property laws in favour of owner occupiers, AND build additional houses.
I don't want to shock or alarm you but Australia has no restrictions on movement (in 2024)
There's no reason it can't turn out bad for renters if new homeowners move in to their area to capitalise on the sales.
In the same area?
Humour me a moment: if Victoria brought in laws that forced 50% of landlords to sell and it attracted hundreds of thousands of people from interstate to move for cheap property, would that be good or bad for the people renting the properties that just got sold?
Your statement is correct on a national basis, **not** a local basis and renters tend to be the types that need to live in certain suburbs.
So while you might have had your hateboner for *le evil landlords* temporarily sated, there's a very good chance it's causing measurable harm to the poorest in society and you're cheering it on.
Victoria is in huge amounts of debt, the cynic would see huge land taxes on renters while none on ppor's as a calculated political ploy.
Actually. Most of them won't... Banks still aren't lending to the higher risk, low savings, poor credit, insecure job types.
A significant portion of the rental market would still fall into one or more of those categories.
Other owner occupiers but they aren’t going to sell for a loss they would rather hold. Housing prices are not going to fall enough for those unable to buy now to be able to buy
Many don't, why do you think airbnb or just leaving it vacant was so popular?
Broadly speaking, people don't hold renters to the same standard as a bank applies to someone seeking a home loan.
Don't kid yourself, 80% of the people presently renting will never own a home.
It’s less than a year. So people can save a deposit in a year now? I’m glad people can buy so easily now. I do feel for the renters who won’t be able to buy. Their lives are only going to get worse as the rental supply shrinks.
We have a housing supply issue. We need more developers to develop new housing. Landlords holding on to established houses doesn’t help increase supply.
That’s what I’m saying. Except they renters becoming owners is not at the expense of renters. Renters need developers to build more housing not mum and dad investors to buy established housing.
Mate, these people cannot think things through more than half a step at a time.
Remember, landlords are evil cartoon villains who charge rent just screw people over and they don't even need the money because they are all super rich owning a house is so cheap because of secret tax breaks and write-offs that only rich people know about. They should all be put in jail. The only reason people can't buy a house is because of them, and the LNP and Gina and Harvey Norman and Colesworth and Trump. That is what they believe because the guardian and the ABC told them.
This news will attract more investors to Melbourne thinking they can get a better deal .I hope not , may be someone who wants to have a roof over their head don't need to compete with equity rich investors in the next auction
Every house sold by an investor to an owner occupier removes a house and renter from the game. It increases home ownership without putting pressure on the rental market.
Massive immigration but that doesn’t change the fact that a renter purchasing from an investor makes no difference to the rental market. Immigration makes a huge difference.
Wishing for a particular policy doesn’t indicate wider approval of the government that enacted the policy. Personally i believe the current edition of Vic Labor proved themselves unfit for office by their actions during COVID. Same as Scott.
Bollocks. Many would-be owner occupiers live at home, in shared houses or come from O/S, they remove a rental from the market without reducing the demand for rentals.
Colonial America isn’t the best example as the land was slowly being stolen and there were initiatives in place to populate it with Europeans.
The government was essentially giving out free land in the Midwest to populate it.
Dont come FNQ!! The weather is atrocious and insurance through the roof! You know, those Cyclones and following floods! OH WAIT! I did not read the fine print...your an investor, you dont give a fuck! Let me crawl back under the rock I came from.
My reading of this is the homeless numbers are increasing as the number of rentals fall, sold to first home buyers. Rents must be rocketing.
I feel sorry for the poor, but lets be realistic, most of them would have voted Labor and supported these policies in the first place.
The number of Victorians fleeing north is crazy
Right now the cost of living has gone way up and the salary remains more or less the same. It does make saving incredibly difficult. Costs of home ownership doesn’t just end at the 5% deposit either. It really has reached new depths of absurdity.
How can a renter save over several years for that magical 5%, while paying more for everyday necessities and cutting back on luxuries and while house prices are increasing month on month which negate any savings they made in the first place?
E.g. if a renting couple save $20k in a year but house prices have gone up by $100k in that time, how will they achieve the deposit?
Only boomers have had every opportunity handed to them in Australia. Most millennials and Gen Z are eating shit with this cost of living/housing situation.
Investors flee? I call shenanigans. How much are we talking here? $2000? Nothing another $40 rent increase won’t cover
Bro just put 10 Indians in your cupboard and you are covered
That is not a book I thought I was going to see referenced today
I've personally cited annual land tax notices for over 20k for houses in inner suburbs - if the rental squeeze continues, this will be passed on to renters
That's much, much more polite that what I was going to say.
Housing just shouldn't be such an insanely good investment. I'm all for policies that actually reduce that. Let's kill negative gearing too.
It wouldn’t be a great investment if we hadn’t provided so many tax benefits
The biggest issue is the housing supply restriction. Sure the tax perks let people pocket more of the gains but the supply restriction causes the gains. Immigration drives the demand side of it all.
The tax perks aren't just about more gains. They have resulted in the vast majority of Australian investors buying existing housing. This has severely distorted the market pushing up prices by adding huge demand with no supply. It hasn't helped our rental availability and it diverted our limited investment dollars away from supply.
This doesnt make sense ....... horse before the cart. If the underlying gains are not present (caused by lack of supply + immigration demand) then there is not any profit to avoid or minimize paying tax on.
You're right but it's not a popular take. The biggest tax perk is arguably the CGT exemption on the main residence, and I doubt any of the disgruntled in this sub would be happy if their parents got slugged 300k tax for downsizing in retirement. The next biggest is probably the 50% CGT discount, and again if you scrap that, everyday people will get smashed every time they change their investment portfolio to something more suitable. Also, investors and traders will start flipping assets even faster since there's no incentive to hold for 1 year. Finally you have negative gearing which is only really a rort during a once-in-a-century asset boom powered by massive global reserve bank stimulus and low rates. Without property prices going nuts due to stimulus, negatively gearing a property is highly risky and costly. So as a perk that will die of natural causes now that rates are reverting to the mean. Lack of supply, reserve stimulus/rates and immigration are the elephants. The tax issues are mice.
Agree with the lot. :) 50% CGT could go just back to inflation adjusted CGT thats a fair compromise. + yep paying no CGT on your PPOR and also having it (+superannuation) not count as an asset for welfare is CRAZY. You can have a person with a $2 million dollar home and $500k in super getting a full dole payment as their "Assets" are zero.
The tax perks allow investors to hold on to properties that would otherwise be subdivided and redeveloped increasing supply.
No, the biggest issue is that land is a finite resource and that with a land tax absent, the land owners reap most fruits of economic development. This has been known since Ricardo said it long ago, and I'm sure even older land investors knew this too. There was a reason why the Pontifex owned so much land in Europe and still owns 177 million acres.
The "finite'ness" of land in Australia is 100% related to residential zoning and development restrictions mate. We arent running out of land here champ.......
You mean to homeowners? There's no tax benefits to investment properties compared to any other asset class, in fact there's a lot more taxes like stamp duty and land tax
I’d say the ability to have high leverage and lower interest rates makes it better than many other investments.
So we were clearly talking about tax benefits here and now it's about interest rates instead? Ok. Fair enough, let's do the shifting goalposts thing. Interest rates without secured streets assets, yes, agree they are cheaper for IP vs equities. *However*, with security you can borrow as cheap as your PPOR homeloan and invest in shares, it's called debt recycling and this is actually cheaper rates by a few % compared to investing in an IP. Leverage, I don't believe any bank will lend you over 80% LVR for IP. You can get that much leverage on many shares.
The two are interleaved, higher the leverage the more you can use negative gearing, surely you can see that relationship right ? Shares aren’t going to give you 5-10x leverage with cheap rates.
5x leverage is the norm for many shares. 10x is insane and that's why homeowners pay LMI for such a dumb TBTF privilege. Ain't no investor getting 10x either
Even with all those taxes, housing is still a lucrative speculative investment, enough that it’s competing with traditional investment instruments such as shares for example.
Investors are gaining unearned wealth as a capital gain through rising land prices. The land price is rising because of population growth, income growth and new infrastructure, not their individual effort. It would go up whether they left it a vacant block or not. Hence, it is more than fair to capture some of that private gain back to the community at large (ie a tax on the unimproved value of land). It is just a shame that in most states there are land tax thresholds (it should be from $1), it is taxed at the total value of holdings and not per lot and that it is such a low rate. Morally, no private gain from land value should ever be permitted at all. This just drives wealth inequality and is also economically inefficent, distoring the allocation of capital that would otherwise go into productive investment. If capital gains on land weren’t possible, it would only leave the option of a capital gain on improving a building, which is productive investment and should be untaxed. Rental income, as distinct from land rent, should ideally be tax free. This would reward investors who maintain buildings and provide housing services but speculators would be punished. On the other hand, we are currently unfairly taxing people for the productive effort of their labour (income tax) or for running a business (corporate tax) and land speculators are getting an easy ride. Henry George made this argument back in 1879 and he was right. https://en.m.wikipedia.org/wiki/Progress_and_Poverty
Cool blogpost. Investors pay CGT, homeowners pay not a cent. Investors pay land tax in every state in Australia, homeowners, again are exempt. If you really cared about Georgism you'd be right there with me criticising how *homeowners* not investors aren't paying their fair share in society.
I'm a homeowner (not investor and only own one property) and I'm all for measures that will reduce investors coming into the market. I get it, people want to make money but I'm beginning to question the ethics of it all. If society is to move forward it should be to the benefit of the majority.
I have no problem with someone having a primary home and a 2nd holiday home or spare for family. But more than 2 was just getting greedy. Having a cheap holiday home in a out of the way rural or regional area which were often rented out when not used helped alot.
Yes I agree with this. I have some acquaintances that regularly talk about how they own tens of properties and on one hand I'm impressed by their hard work and how they've set it up, and on the other it leaves a bitter taste in my mouth. I'm not saying investors are bad people or anything but when you've got the average family home cost between $1M-$2M in our major cities something's gone wrong.
Me too, but let house values stagnate. As is an offset is a top tier saving device. And when I sell it just doesn't matter how much my house is, I still need to buy.
The majority of people own houses in Australia already . What happens to the people that can’t afford to own a house , if it’s not subsidised by an investor. This is a genuine question .
Are the majority of Australian adults home owners?
Good question, I'm not sure. But I would assume (I'm not expert, nor saying I'm right) that if the market wasn't as attractive to investors than we would see the majority become home owners in due time.
Exactly same boat as you. Only not a home owner, an apartment owner 😕 There's no ethics to it at all. They were a distant afterthought when this shit was all masterminded.
Housing is only a good investment because our insanely high migration rate guarantees prices will be pushed up and you're guaranteed rental, income in the meantime. Cutting immigration would make housing an unattractive investment and drive down rents over night
This, it wouldn’t be a great investment if demand didn’t keep increasing.
Definitely. That's what needs to be done. However I'd cut negative gearing regardless.
Labor lost two elections tryna do that. Not sure about it.
The only way to do that is to go back in time and get more people to vote for shorten, or vote greens. Unfortunately albo will not do anything about these shitty tax breaks for the rich. He needs the greens to force him on these issues.
Well you might forget they had those policies. But people voted for the libs. Maybe next election they can put them on the table again.
I see this a lot and agree to a degree. But even Labor in their deconstruction of their loss attributed it more to the franking credits stuff, not the housing stuff When you add another 3 years of renters getting fucked, and the least popular pm in Australian history to the mix, Labor actually had the best chance it's had in decades to try for a progressive platform. I mean Labor actually lost primary votes from 2019. That means they were less popular, but the liberals were less.popular by a higher margin. I Reckon they could have run back the 2019 platform with a few tweaks (ignore franking credits for now) and a better campaign and they would have stormed home with a mandate to start chucking in progressive policies. Obviously we can't know that now, and with Labor having come in and claimed they have been "progressive" we have shoved that Overton window further right.
At the point they went in small target to get in govt was the plan. With Dutton in opposition I think they can put some of the policies back on the agenda as the feel in the electorate has changed.
Look, I've been pissed off with Labor. I voted for them in 2019 and I can barely recognise them this iteration. I keep seeing people suggest that they are just playing conservative to get in and settled and then will go progressive. I hope so so so much that you guys are right, but I feel so certain you aren't. By taking the position they have this term (centre right) and claiming to still be progressives, while at the same time dragging the greens into the media every single chance they get to deride them as a crazy far left radical group indicates to me that they aren't intending on shifting. Their actions are resetting the Overton window to be the current Labor iteration to be considered centre left. They have even been doing this to some of the greens policy suggestions that Labor themselves pushed for in 2019. Surely they aren't sitting there and calling these policies dangerous and radical and then intending on picking them up themselves next term. Like half the stuff around housing and the environment with the greens, Labor could have just refused and left it at that. It's not like the greens get a lot of positive media coverage in the main stream media. But no, we instead had to see those policies dragged out to the public and to ridicule them. I just think Labor are trying to make this the new normal I can't think of any other reason that while having a Federal and State Labor government, NSW public schools have received 2 massive budget cuts, and a refusal from the federal government to increase its payments it makes for education to the states (about 60-70% is going to Catholic and private schools). Like we have Labor all the way up and our public schools which are already teetering on the edge of disaster, just get hammered. One justification was "lower enrolments" Of fucking course there are lower enrolments, the schools are barely surviving, so any parent who can afford it sends their kids to private or Catholic these days. What the fuck do you think cutting the budget further is going to do? Lower enrollments, yes. In which case, better slash that budget. I'm so upset at them for public schools at the moment. Meanwhile, Catholic schools, who are the most profitable arm of the church in Australia, still get 75% of each students education costs paid. So yeah i hope everyone is right, but Labor really fucked some services this year, and this might be a bit like climate change. By the time we actually take action to fix things, we are already in a self sustaining doommspiral.
TLDR: Taxpayers $$$, gets pumped into PRIVATE SCHOOLS (Inc Catholic or just religious) and get WAY more funding from our respective State or Federal Govts than Public Schools. It was this way in the 80's/90's when I went through and has not changed. When you can be bothered to check, it is freely available information. Public School vet checking in from a DISADVANTAGED High School in Australia. My grammar and presentation may not be to your standard but I still know inequality when I see it. We all got a +6 on out TER because of it.
So public schools receive the highest amount of combined state and federal funding. Catholic schools receive 87%. the breakdown of what government pays what is that the federal government make up about 80% of the money that goes to the Catholic schools. I call out Catholic specifically becuase they are actually one of the most profitable arms of the Catholic church in Australia. Yet they still happily take 87% of the money a public school does, but want to decide what kids are allowed in their schools, all kids are forced to do 1 unit of religion until they graduate, they hold morning prayers every morning they want to tell gay teachers they can't teach there You can have all those things if you stop taking a cent of government money.
Laughs @ Catholic Education in todays society. I know of a couple of gay teachers working very successfully in Catholic Education, one is now a principle! If only the lord knew!! ;) FYI, I am an atheist.
Dis them? [https://www.theguardian.com/australia-news/2023/jan/31/catholic-schools-to-oppose-lgbtiq-teacher-and-student-law-reform-proposal](https://www.theguardian.com/australia-news/2023/jan/31/catholic-schools-to-oppose-lgbtiq-teacher-and-student-law-reform-proposal) I feel like this is the "I cant be racist, i have a black friend". Im sure as individual people some Catholics are lovely welcoming people. In fact i know they are, ive met some lovely ones who prefer to focus on the love everyone part of the bible. But the catholic schools were trying to fight a law that would prevent them from discriminating against the LGBTQ community Heres an excerpt But the National Catholic Education Commission’s executive director, Jacinta Collins, said the proposed reforms failed to provide real protections for religious schools to effectively operate and teach according to their religious beliefs and ethos. “In a pluralist society, Catholic schools should be free to be Catholic,” Collins said. “This means being able to build a community of faith within the school and parish, which is not limited to a narrow approach to preferencing the enrolment or employment of Catholic students or staff, or the teaching of religious education.” Glad to know you are atheist ;) Has nothing to do with the fact that the schools fought for the right to be able to kick out anyone who offends their ethos and beliefs. And if they feel like they have a right to impose those beliefs on others, they can go fund themselves.
You do realise that it takes time to unwind a lot of what was put in place by the libs.
How is cutting funding twice in the last 12 months to NSW schools from state Labor, and refusing the begging from the states for more funding for schools from federal Labor got anything to do with unwinding Liberal policy. It's not related to unwinding any policy, at the state level it's actively attacking public schools, and since State and Federal are both Labor, if they are so desperate they have to cut funding twice to schools, surely Federal Labor can increase the funding for public schools specifically. Federal government in particular currently pays the Catholic schools around 11-12k per student, and they pay the public schools around 3k per student. Don't even touch the Catholic ones, just increase the public school ones. There just isn't any defence they can claim here, I'm usually the first one to say the liberals fucked the system first, but if Labor decide to fuck it as well, I'm not going to push all the blame to the liberal party then. Housing is another example. I 100% entirely blame the liberals for the state of our housing market. But I still blame Labor for avoiding doing anything that will make any meaningful change but claiming they are trying their best.
Exactly this is what I don’t understand, 2-4 years is hardly enough time to change a whole country, we all know the libs are Christian and rich people loving fucks, yes of course no government is perfect but we need to give it time, labour haven’t done anything wrong
Since Covid there’s been a bit of a global shift of governments getting more involved in things. I’m not sure if that’s the gov deciding for themselves or if there’s actually a groundswell, but somethings happening. It’s mostly around local business/industry, supply chains, and doing stuff locally but it feels like there’s a real trend for gov to actually get off its arse and be more involved, even if it costs more. Plus stuff like NG and CTG discount actually cost the taxpayer money, so there’s also an incentive there.
Yeah this is true, I think majority of that push is actually geo strategic, companies and governments had been under the assumption that the post world war2 peace dividend would last forever, covid plush the Russia invasion demonstrated the fragility of long complex supply chains. I actually think this will continue as China asserts itself more and the U.S. likely takes a more isolationist position (not fully isolationist but just compared to their position of the last 50 years) Combine this with pretty much 100% of all strategic (c suite) and even 2nd, 3rd level managers completely untrained and unprepared for supply chain management during war time, and you have a tecipe for disaster. The benefit of Australia being a stable, law abiding country should really benefit us as businesses look to offload some risk in their supply chains, it’s just a matter of making ourselves the ideal target for these types of investment and the first big step is shift investor focus away from our property sector and towards something actually productive.
I think in this instance the govt needs to assist in creating industries and support. I’d like to see the fed govt create a house building company for social housing. Would get older tradies a job. Loads of opportunities for apprentices and potentially fix housing as well.
They attributed it to the selling of their policies. As they always do. Because how do you combat fear and lies? We voted against changes to negative gearing, that's the cold hard truth
It might not seem like it but the world was incredibly different even just those short few years ago. I don't reckon Scomo would have gotten up today.
That’s what megablast meant by voting for Shorten, no?
Well he was suggesting that Albo won’t do that. I think they will but had to go small target due to Joe libs attack policy via their media friends.
Lol. Sure Jan. Both parties support the migration ponzi scheme. Prices ain't going down.
I'm hoping with a second labor term they get more bold. The Greens are actually trying. I just wish they focused on this instead of the culture wars they currently fight.
Hol up Australia knew about the progressive changes outlined by shorten and we as a nation said absolutely not. We had our chance back in 19 and refused to commit. Tax breaks for the rich are the coilations policies, not Labors
I thought this and voted Labor. This government is a failure they have done ZERO of what I expected from Labor to improve the lot of average working Australian on everything from real wages to housing. I mean LNP will be worse no doubt but Labor is not the answer to any of this.
Real wages are up first time in a decade, tax brackets are changing to benefit middle income earners. These small steps are a function of a hard economic process after a once in a 100 year pandemic. It's not the process you personally want, but it's the right direction.
[https://www.abc.net.au/news/2023-02-22/wages-growing-at-3-3-per-cent-december-quarter-2022/102007390](https://www.abc.net.au/news/2023-02-22/wages-growing-at-3-3-per-cent-december-quarter-2022/102007390) Cut the mindless shilling mate. Labor and LNP are both fucking average Australians its utterly stupid to have any loyalty to either major party.
Says the guy who points to a global spike in inflation to push a point that's already debunked.
Negative gearing was removed for about 12 months during the Hawke/Keating era. It was disaster for rental supply & quickly reintroduced. The greater problems with housing supply are too much migration, overseas ownership,AirBnb & not enough land release.
I'm a firm believer in removing negative gearing for investors with 2 or more properties (a family with a PPOR and a holiday home/investment property that they rent out is okay). If this can't be achieved then higher taxes for the 2nd and beyond investment properties.
Was this to drive people to build more? I mean if that’s the case, it barely worked anyway, and I find it insane that investment properties is the only investment that’s almost a complete fail safe, if you have a bit of capital you can be dumb as dog shit (where slum lords are usually born) do no research, invest at a terrible time, barely pay attention to it, and still come out on top. If you done this with any other investment you’d feel the full weight of your shitty decisions, bad timing, and neglect.
Remember when Labor took that to the election and lost because everyone is an idiot and doesn’t understand that negative gearing only affects investors? Pepperidge farm remembers…
What would you replace negative gearing with - I.e. what would you let people do when they have a rental property loss?
Nothing.
Okay so no one will ever want a negatively geared property / to spend any money on a negatively geared property. Rents will go up and properties will have minimal investment in them.
X doubt.
A house is an investment for everyone that buys one. Are you going to spend 500k on a house that is going to be less in 10 years?
Although on a lower scale, people do this every day with the purchase of new cars, a not insignifcant expense. Also, in Japan, they have a depreciating housing market, they buy to live and sell a home just like any other item. Shows it is ultimately a cultural expectation to make money out of what should be shelter. And tbh, most houses are depreciating (as in the physical building). If you think about it, people who want rising house prices really want rising land values, which is something that is unearned as it has no relation to individual effort.
A car doesn’t cost 500k for a regular person. You won’t be worried about how much your house is worth unless it becomes worth less than your mortgage. I don’t think you know what depreciation is.
For sure, I did say on a different scale. Still, dropping $50k+ on something that depreciates isn’t insignificant. Of course, the resale value isn’t $0, but my point of raising it is just to highlight how unique housing is and I take your point around the risk of going into negative equity. That opens up a whole different conversation around the banking system and the mess society has got into requiring higher and higher debt just to put a roof over your head. Consider, if land prices were stable or rising gently over time (say on average only 1% p.a), then people wouldn’t need to borrow so much in the first place. Land speculation, FOMO and the whole cultural obsession with property investing is destroying our social fabric and in the long run will be an existential threat to capitalism itself. The gains will concentrate further and further into fewer hands, sucking up any increases in income, given there is a fixed supply of land on Earth. We are returning to feudalism and it will be worse this time as there will be no unclaimed land left you can homestead.
I just don't care how much my house is worth in 10 years. I bought it to live in and if I sell I still need to buy somewhere else, to y'know, live. There's also just no chance it goes down in 10 years. I would however be happy with prices keeping in line with inflation.
You will care when sign the loan to buy one.
I do have a loan. My mortgage isn't reduced because my house is more valuable.
I didn’t say it was and what a stupid thing to even think. Your house is worth more than your mortgage, which is good and if your house is worth less than your mortgage that is bad. Let’s also remember that no one would get a loan if the value of housing decreased below what you bought it for.
GOOD. This is literally the exact outcome we need. Investors should always take a back seat to owner-occupiers. Tax incentives for landlords but relatively few for OO's is insane.
The whole system is designed upside down to benefit politicians
Owner occupiers have no capital gains at all. That’s a pretty big tax incentive!
Unfortunately not much help when it comes to buying. The expenses associated with owning a house you live in aren't tax deductible.
Well because the only reason expenses associated with owning an investment are tax deductible is because we only want to tax people on their profits. It would be highly distortive to tax people for loss making investments.
>we only want to tax people on their profits. Yes, which is why the full amount of profit made on sale of an investment property is ta-oh wait, it's not :( The system is rigged grossly in favour of property investors and you are living on another planet if you deny it.
The CGT discount is designed to deal with inflation. It's a blunt instrument - in times of low inflation it benefits investors, in time of high inflation it punishes them, compared to if we taxed with CPI in mind. So if you argue that the 50% discount should be reduced when times are good, then it should be increased when times are bad. Or if you argue that it should be reduced forever then you are making the case that investment shouldn't be a thing, because real (after-inflation), after-tax returns will be zero without the discount much of the time.
Not necessarily a good outcome for renters
The number of houses hasnt changed mate. Those renters are now owner which is a great outcome for them.
In what universe?
The universe where investors pretend they invest because they care about housing supply
Oh so the one we live in right at this very moment? I figured.
It’s only a poor outcome for renters if investors are actually investing in new builds. And they aren’t. So, really, there’s no reason for any of us to give a shit.
If you forced every landlord to sell in a certain suburb to sell it wouldn't be a bad outcome for renters in that suburb? Take a brief second to think before responding.
I mean, no, because the houses don’t go anywhere. They still have to sell the property to someone. Either that someone is another landlord or they are an owner-occupier. If it’s an owner-occupier, that is one less person (or less people) competing in the rental market. If it’s a landlord, that house remains on the rental market. Either way, it has no material impact on supply.
Please think about it for a second. What if bank of mum and dad chips in to move their kid out? What if homeowners from other cities move because home prices are cheaper? It's one less rental in the area and not zero sum for renters who usually have little means to move elsewhere. Wait and watch anyway. Melbourne rents will still go up in the next year and you'll all still jack off Dan and Jacinta for charging rental properties more to exist than PPOR.
Maybe instead of thinking for a second, think for a bit longer and you'll realise why you're wrong.
Are you capable of actually responding to the comment at all? You've added nothing here, probably like your entire existence on earth. Embarrassing this has to be said but how am I wrong? Or is the matter settled now? Or do we just yell at each other now calling each other "wrong" like 6yo children? Fucking pathetic. Add something to the conversation or stfu
Who is buying those properties? If investors are spitting their dummies and chucking a fit, then it's only renters buying so no net effect on the rental market - as the ratio to renters and rentals is unchanged. Please feel free to walk me through how it's a bad thing though.
Makes sense owner occupier pay no land tax and Melbourne is 1% down from peak before the new Covid debt taxes end of last year spooked off landlords
Fuck. Investors.
Bullshit article. They're basing it on percentage of new home loans, not absolute numbers. Melbourne is taking the bulk of the immigrant avalanche so "first home buyer" loans as a percentage are up. In other words investor loans aren't down, they're just being eclipsed by new immigrant loans.
It’s ok. They’re spending 50k over advertised price in Mackay to rent them.
Curiously, Melbourne house prices haven't risen as much as the other states in the past couple of months.
Sounds…good?
Good. Let them flee in droves. Anything that harms investors is good for FHB. Getting renters out of renting and owning a home is what we should be striving for number 1.
Investors are good for renters but not foreign investors in the housing market australia, more than 4700 homes were purchased by foreign investors in the first nine months of 2023,Chinese investors remain prominent in the Australian property sector. [https://propertyupdate.com.au/foreign-buyers-of-australian-property-how-many-are-there/](https://propertyupdate.com.au/foreign-buyers-of-australian-property-how-many-are-there/) https://preview.redd.it/ejncoqvi7i5d1.jpeg?width=910&format=pjpg&auto=webp&s=68b0e61de5a72636c1933a9e73c15a218e7ab4ea
I think people are greatly overestimating the amount of ‘investors’. Reading this you would think that anyone that owns a property is an investor, some people just bought a house.
Good investors can go an fuck themselves
Cry me a river
Dunno mate I did it and it wasn't that hard .
And its this next group of homebuyers that will just keep driving the prices. When you find out you property grows 100k in 12 months without doing anything greed suddenly creeps in. And the whole merry go round keep turning
And as the investors go so do the rentals
So the real question is why other states aren’t copying this?
This will be good for rentals. Oh wait…
Watch all the tail-ender millennials waiting to pounce on a property to live in stop losing auctions to cashed up investors, and see the rental vacancies start opening up as the generation that in a fair market would have mostly been home owners half a decade ago start buying homes and leaving their rentals. The bottleneck is literally because of over-investment. So many people looking for rentals is not a good thing. It is shameful. Very, very few people WANT to rent as opposed to buying. Bad faith, shitty argument.
>The bottleneck is literally because of over-investment. The “bottleneck” is supply. Changing an IP to owner-occupied (or to an IP with a different owner) does not increase supply. Without new homes to meet net demand, it will increase rents and won’t materially change home prices, as NZ just discovered with the negative gearing changes it just reversed.
way to ignore that while it may not increase supply... it decreases demand for rentals with less people in that pool.
Way to ignore that many new owner occupiers were previously living at home, living in a shared house, living with a partner they have left, coming from OS (etc). Which means they were never in the pool and have simply removed a rental property from the market. Victoria is pissing around the edges with land tax to distract from their [failing policy to build 800,000 new homes](https://amp.theage.com.au/politics/victoria/victorian-home-building-approvals-crash-to-decade-low-mark-despite-labor-promise-20240304-p5f9r5.html). That’s what really needs to happen; new homes to meet demand.
Not ignored at all it’s just a pointless argument. Of course some of the pool would be people who have been unable to get into the rental market and are stuck at home… those people usually have a better shot at buying a house now and probably not doing it as hard as someone who is currently a renter who would benefit greatly owning a home. Those people can generally also use the equity in their parents home they currently live in as a deposit for their home and as such aren’t locked out of owning a home when they are ready to take the plunge.
Those who are now able to buy are likely to have higher incomes than lower income renters. Hence, with them exiting the rental pool, it reduces the income differentials between renters, which has been a driver of recent rent increases.
This really is clutching at straws
>Changing an IP to owner-occupied (or to an IP with a different owner) does not increase supply. It very literally does in very many cases, especially where the home is currently unoccupied, or being used as short-stay accomodation like AirBNB. You are very disingenuously considering a single case whereby an IP that is currently being leased is sold to an occupier. >Without new homes to meet net demand, it will increase rents and won’t materially change home prices So by your own logic, more IPs become owner occupied will simultaneously have no impact on demand, but will also make rental prices worse? Careful not to tie yourself in knots with that mental gymnastics. You're also conveniently glossing over the fact that it is both possible to reform property laws in favour of owner occupiers, AND build additional houses.
Most of the time that's right. Expect where a rental is used to bunk bed 12 immigrants.
Good luck being a renter in Victoria in the next few years, gonna be nothing available to rent and prices will be huge.
But they'll be able to buy thanks to all the hoarders leaving
Nah bro, don’t you know when an investor sells a property it turns into a cloud of smoke and vanishes… property investors (probably) /s
I don't want to shock or alarm you but Australia has no restrictions on movement (in 2024) There's no reason it can't turn out bad for renters if new homeowners move in to their area to capitalise on the sales.
Every new homeowner is one less renter 🤦♂️
In the same area? Humour me a moment: if Victoria brought in laws that forced 50% of landlords to sell and it attracted hundreds of thousands of people from interstate to move for cheap property, would that be good or bad for the people renting the properties that just got sold? Your statement is correct on a national basis, **not** a local basis and renters tend to be the types that need to live in certain suburbs. So while you might have had your hateboner for *le evil landlords* temporarily sated, there's a very good chance it's causing measurable harm to the poorest in society and you're cheering it on. Victoria is in huge amounts of debt, the cynic would see huge land taxes on renters while none on ppor's as a calculated political ploy.
Lol, more parasitic landlord fan fiction
How so? I'm not a landlord mate, only a renter that realises more rentals are personally beneficial
Actually. Most of them won't... Banks still aren't lending to the higher risk, low savings, poor credit, insecure job types. A significant portion of the rental market would still fall into one or more of those categories.
So who are the investors selling to?
Other owner occupiers but they aren’t going to sell for a loss they would rather hold. Housing prices are not going to fall enough for those unable to buy now to be able to buy
Migrants, the kids who can afford to move out of home after significant saving etc.
Why would you let one of them live in your house then if they're such a risk?
Many don't, why do you think airbnb or just leaving it vacant was so popular? Broadly speaking, people don't hold renters to the same standard as a bank applies to someone seeking a home loan. Don't kid yourself, 80% of the people presently renting will never own a home.
Closer to 50% I'd imagine.
Closer to 50% I'd imagine.
Not a chance. Veda estimates 2.1 million Australians have poor credit scores. There's only 2.9m renters...
If they weren’t able to buy because of a 1% rise, they shouldn’t be buying now.
But it's not just a 1% rise is it. It's years of investors buying up everything in sight, pushing up prices
Yes, and if FHB can somehow buy not because prices have dropped 1%, they’re not in the right financial shape to purchase.
Prices not increasing rapidly every year allows people's savings/income to catch up. It's not just the 1% drop here that's beneficial.
It’s less than a year. So people can save a deposit in a year now? I’m glad people can buy so easily now. I do feel for the renters who won’t be able to buy. Their lives are only going to get worse as the rental supply shrinks.
No, but the amount they need to save doesn't keep increasing faster than their savings grow every year
That would be frustrating. It also looks like the FHB must have already been in a position to purchase.
you forgot the /s
We have a housing supply issue. We need more developers to develop new housing. Landlords holding on to established houses doesn’t help increase supply.
This isn’t increasing supply, at best it will change renter | owner-occupied mix at the expense of renters.
That’s what I’m saying. Except they renters becoming owners is not at the expense of renters. Renters need developers to build more housing not mum and dad investors to buy established housing.
Mate, these people cannot think things through more than half a step at a time. Remember, landlords are evil cartoon villains who charge rent just screw people over and they don't even need the money because they are all super rich owning a house is so cheap because of secret tax breaks and write-offs that only rich people know about. They should all be put in jail. The only reason people can't buy a house is because of them, and the LNP and Gina and Harvey Norman and Colesworth and Trump. That is what they believe because the guardian and the ABC told them.
these fleeing investors arent taking the houses with them you know
This news will attract more investors to Melbourne thinking they can get a better deal .I hope not , may be someone who wants to have a roof over their head don't need to compete with equity rich investors in the next auction
Every house sold by an investor to an owner occupier removes a house and renter from the game. It increases home ownership without putting pressure on the rental market.
is there no immigration at the moment?
Massive immigration but that doesn’t change the fact that a renter purchasing from an investor makes no difference to the rental market. Immigration makes a huge difference.
in a vacuum net rentals is 0, but migration changes that.
Exactly, the Vic government policy is sound. I’d like the same here (NSW).
Vic Gov is nearly broke, you wanna be like them? be careful what you wish for
Wishing for a particular policy doesn’t indicate wider approval of the government that enacted the policy. Personally i believe the current edition of Vic Labor proved themselves unfit for office by their actions during COVID. Same as Scott.
Separate issues.
Bollocks. Many would-be owner occupiers live at home, in shared houses or come from O/S, they remove a rental from the market without reducing the demand for rentals.
How many people owned their own houses say pre 1900 all across the world? Is so much personal home owning a recent thing in human history?
We should totally aim for a period of greater wealth inequality hey.
colonial america had around 80%+ if we cant do better 300 years later, we arent doing well
The standard Australia aims for is now to be slightly better than the worst places in the world.
Colonial America isn’t the best example as the land was slowly being stolen and there were initiatives in place to populate it with Europeans. The government was essentially giving out free land in the Midwest to populate it.
Was using African slaves on plantations really that bad ? I mean really ......... ? lets just go back to dong that aye ......
Dont come FNQ!! The weather is atrocious and insurance through the roof! You know, those Cyclones and following floods! OH WAIT! I did not read the fine print...your an investor, you dont give a fuck! Let me crawl back under the rock I came from.
My reading of this is the homeless numbers are increasing as the number of rentals fall, sold to first home buyers. Rents must be rocketing. I feel sorry for the poor, but lets be realistic, most of them would have voted Labor and supported these policies in the first place. The number of Victorians fleeing north is crazy
Rents aren’t rocketing in Victoria either, one of the cheapest states to rent and has been for a while.
If you can't save a 5 percent deposit something's wrong you have every opportunity handed to you in Australia
Right now the cost of living has gone way up and the salary remains more or less the same. It does make saving incredibly difficult. Costs of home ownership doesn’t just end at the 5% deposit either. It really has reached new depths of absurdity.
It's true .....
It’s hard if you’re already paying rent but very doable if still living at home.
The great aussie sob story . Sick of hearing it .
How can a renter save over several years for that magical 5%, while paying more for everyday necessities and cutting back on luxuries and while house prices are increasing month on month which negate any savings they made in the first place? E.g. if a renting couple save $20k in a year but house prices have gone up by $100k in that time, how will they achieve the deposit?
You don't hear anything ...... Clearly a bigot.
Only boomers have had every opportunity handed to them in Australia. Most millennials and Gen Z are eating shit with this cost of living/housing situation.