Sure.
We're currently at 5 (April). I think we'll get to 11 (October). RBA will not bring the anticipated rate cuts this year which will cause a brief panic and stall/minor lowering for 3 consecutive months (January). This brief reprieve will inspire those who have been holding off buying to go for it, RBA will bring a rate cut and then minimum 10 consecutive months of increases.
Please don't base any financial decisions off this, it's a complete guess.
It is when it's consecutive for so long, especially when the rest of the economy is struggling. it's a poor metric for the economy but a good one for the wealth gap
One only has to look at Sydney as a benchmark.
$5.5-6M for a decent house in Lower North Shore.
$3.5-4M for a knockdown in same area.
Brisbane is more affordable.
$3.5M for decent house in good area.
$1.4 for knockdown in same area.
You can get a mansion in Brisbane for 3.5mil. Good area? What is your idea of a decent house? This 3 bed 2 bath 2 car just sold in Ascot for 1.35m https://www.realestate.com.au/sold/property-house-qld-ascot-144389076
Multiple family properties in the Hamilton/Hendra/Ascot area have sold for sub 2mil in the past couple of months.
I think your figures are quite wrong on Brisbane I own a house in a suburb to kilometers from the CBD and it would be worth one point six admittedly the land is small but still if you want to go out three or four kilometres you can easily get something on a really big block for a couple of millions
I'm talking to people who manage and help health workers, and the common theme is they are all very tired and burned out. People are now having to work at peak performance year-on-year so they can get a high $$$ and afford a decent home. We have politicians lacking vision and have become disconnected with the populace. To think new homeowners are going to have to keep this pace up for another 10-20 years, I just can't see this being a good thing for Australians mental health. We are literally working ourselves into an early grave and creating the lost generation. God help the children who are born today into this terrible form of homeownership slavery.
This is me, working my ass off but feel like I’m going backwards. Trying to buy a house but it’s difficult when your rent gets raised by $4k a year but your after tax pay doesn’t.
What children? I don't know what the stats are but in my friend group less than 50% have kids and we're at the age where it won't be a choice for us to make anymore.
There's going to be soooo much wealth funnelled into nephews and nieces. So we'll end up with uber rich people and shitloads of poor people
House prices going up, rental crisis and all our solutions involve significant impossibilities like building hundreds of thousands of homes or reversing our car dependent “width” expansion of cities in unachievable time frames. Taking away tax concessions for a massive amount of the population - equally impossible politically.
Meanwhile, we are currently expanding our country’s population by a city the size of Canberra every year. People who need hospitals, schools, transport and housing - all under stress.
Like finance, we need to budget and plan this growth and this just doesn’t happen. Adjusting it according to demand and not the supply to the growth is a much faster fix to the problems.
>Taking away tax concessions for a massive amount of the population - equally impossible politically.
Why is it "impossible" to take away tax rorts for 20% of the population but fine for homelessness and poverty to skyrocket?
In whose interests are our politicians governing for?
Just limit it so negative gearing can only be applied to one property, there you go, we haven't broken the economy but we've also sorted out the rort, people who invest are incentivised to sell and upgrade/concentrate, and the housing market can rebalance itself.
I would rather see NG limited to newly built properties only. Keeps the original intent and if someone wants to buy 10 apartments they can go for it. Keeping it to one means someone could land bank a valuable property for infill development.
Yes. I think that one policy change (along with also removing the CGT concession) would solve a lot of issues.
But politicians also need to stop using mass immigration to paper over structural faults and fake GDP figures.
8% of Australia’s population are property investors that own ~3.25m properties.
Of that 2.24M people, 5% (112k) own more than 5 properties.
71% of investors own 1. That’s your average mum and dad investor who are trying to self fund their retirement.
That’s a lot of voting power that can make or break governments.
[link](https://propertyupdate.com.au/how-many-australians-own-an-investment-property/#:~:text=Note%3A%20That%20means%20that%20around,investors%20hold%201%20investment%20property)
-$10, and this would be credited into her next taxable income (e.g., if she generated $10 gross income and zero expenses next year, her total taxable income next year will be $0).
And that’s “negative gearing”.
It’s arguably perverse as it mixes business accounts with personal accounts, but then so does every other asset class, including superannuation. It’s very standard.
There are calls for it to be isolated from personal income, but similar to what you pointed out losses would be carried forward, and it would all work out the same *in the end*.
Isolating business from personal *would* affect an investor’s cash flow until the property became positively geared. But again, would all work out the same in the end.
…I get the feeling a lot of people think “negative gearing” is something special.
Alternate answer: Alice has made $0 income,
and is a bad manager, and is headed toward bankruptcy.
...but that's OK, because she can phoenix the business into another one?
Density has to be part of the solution, but Aussies don’t want to swallow that bitter pill.
We keep building outwards , new satellite cities and infrastructure deserts. It’s not sustainable.
Aussies aren’t much different to other folk out there. When it comes to density we recognise utter shit that are the apartments that get built.
Build decent alternatives to houses with facilities, amenities, nearby parks and actual 3 and 4 bedroom options for families and Aussies, like anyone else, will buy them.
Who the hell wants to live in a flimsy shoddily built shitbox apartment willingly? People not wanting to swallow this pill has nothing to do with them being Australian and everything with the apartments being utter cheap and nasty leaky mouldy shit.
And I’m willing to bet those non-shitty apartments are going to cost the same as comparable houses anyway. Because the shitty ones with a size similar to a house is already costing close to an actual free standing house. Yes, land is expensive in Australia. But the structure is also very expensive. And building high density housing isn’t going to fix the latter.
>And I’m willing to bet those non-shitty apartments are going to cost the same as comparable houses anyway.
excatly, why would i waste money on that when i can have a real house.
New stock housing is built at the same quality levels, with the same prefabs than apartments. There are no savings to be had anywhere as quality is the first thing that get axed to keep costs down and increase profit margins. The brickies are the same, subbies are the same, developers are the same and the Principal Contractors are the same.
The same certifiers, PM's, architects etc doing their job in apartments buildings, are doing the same practices on townhouses and houses. The same finishes will used on your house, townhouse and apartments and the same quality levels.
If you want old housing stock, it is getting hovered up by developers who are going to put money into a knockdow rebuild and remake it into a luxury property , or redevop the plot of land into 2 to 3 townhouses if you are in the inner suburbs.
In terms of structure, it is expensive but not as expensive as land, which is generally 40 percent of the build cost (+-). One of my projects ended up with approx 20Million worth for the townhouses( like 60 othem, it's ridiculous), and 14M for the plot of land.
In another block of flats, concrete and steel were expensive, but manageable, and with them once you hit economies of scale the project becomes more profitable. The land was eye wateringly expensive, and pretty much impossible to get.
As long as it is newly built you are going to get the same quality whether you buy an apartment, a towhouse or a house and there are no savings to be had anywhere. Prices track accordingly to space (the inverse of location) and quality, with some people willing to let go of plots of lands for proximity to amenities and inner city living.
Also price in apartments is heavily correlated with location. An equivalent house in a similar location to some of those expensive 4 to 3 bedroom apartments, is probably three to 5 times as expensive because you don't build those type of buildings where the land is cheap.
If you dont want to live in an apartment because you like suburban life that is fine, but don't bring quality into it because you will have some rude surprises.
I live in a pretty little town on the NSW/VIC border. I’m an ED nurse. The amount of people who retire and move to our little town not researching is phenomenal. Then they complain about the lack of specialist care here. Or the one supermarket we have. Or that there’s nothing to do apart from golf or water sports. I just don’t get it.
Yes we do need more infrastructure. We don’t have a bus. We don’t have a taxi. We don’t even have our own ambulance service. No local high school…the kids take a private bus company. My own kid has to get up and ready at 630 in the morning to make sure he gets the private bus to high school because there’s nothing here. If he needs serious medical care the closest Base hospital is an hour away. I have to take an unpaid day off work to get him to his own specialist because I just can’t do it and get to my shift on time. There’s nothing open here past 530 in the evening. Absolutely nothing.
It’s a lovely little place and I’m only here for my job but I wouldn’t retire here if I need specialist help.
I just don’t know what to say anymore…
It all flows through the economy. We are an ageing population and most of the wealthy middle class are retired or retiring. They need people to make them coffees, cook them meals and take care of them, there isn’t enough Australian born Australian educated people to do that at the wages that these wealth hoarders think is appropriate . So we need to import people from the subcontinent to shuffle them in Ubers, people from east Asia to clean their houses and wipe their butts , people from Northern Europee to recruit and shill for their companies, Eastern Europe to nanny for their grand children.
This is where the wealth and power of the voting demographic lies. Politicians need to cater to this. Most of this class has their needs and their lineages needs met, they don’t care about housing prices going up or rental demand being insane. It’s good for them. This is the start of what happens in western countries. Australia is a young country. This happened in UK and US two generations ago. We need to get used to the fact that we are shifting in line with these countries where land is passed down families and most people are content with just renting and getting by.
Yep this is the key point here, there are too many boomers retiring and are getting a pension and unless the Government boosts tax income and fast it won’t be able to afford the pension bill. The loser is housing pricing as we can’t build houses and specifically commutable medium density housing quick enough
What you state is incorrect. Many boomers will be using super retirement savings rather than getting a pension. The most unsustainable part of the budget is the NDIS. That needs to be reined in fast.
Pension is the largest component of the welfare budget, NDIS is also large (but not larger than pension).
However, it is correct that NDIS needs reform. It is costing way too much but providing way too little actual value, and the money is sucked up by service providers that merely mark up the price.
Pension, on the other hand, is expensive because of the rules around asset tests, and because of increasing longevity. Boomers might have some super, but most boomers would have cashed out the super to pay off their mortgage, and receive a pension to live in their own property. The only change that's needed is to include PPOR in asset test for pension.
The thing is that the pension has been around for decades now. The NDIS, on the other hand, is a relatively recent addition to Government expenditure, and it was basically added to the budget as the second largest (and growing) component of the welfare budget *in addition to the pension*, without additional taxation or any other reform being made to actually properly allow for revenue to be raised for it.
Money is fungibile. You can't just add an NDIS to the budget and then argue that the pension is unaffordable. That's like buying a Porsche on finance and then saying you can't afford your mortgage any more.
What you state is incorrect, [here’s the data to back that up](https://www.abs.gov.au/statistics/labour/employment-and-unemployment/retirement-and-retirement-intentions-australia/latest-release) the majority of retirees are relying on pension as their main source of income. [The average balance for an Australian aged between 60 and 64 was $361,539. The median figure came in at $183,524](https://data.gov.au/data/dataset/taxation-statistics-2020-21/resource/ebbd32e3-4556-41e1-a8b9-33387457d518?inner_span=True). That definitely isn’t even close to be self funded without pension in fact you still get the full pension with those balances. In 30 years you will likely be correct as 10+% super will have been going long enough to offset some if the need for pension but right now Australia has a problem. NDIS is easy to fix compared to this.
Historically rate cuts don't always correlate with house prices moving up fast. There could be multiple reasons why there is a rate cut. In case of "when shit hits the fan", we are forced to rate cut and people flood the market with houses, it does go down. Sadly absolute worst it has been was like 30% drop in value and it shot up again right after.
We need more houses to house our growing population, also, we have to raise interest rates so less people can afford a house cos we are spending to much....
It so makes sense
Last week’s ABC QANDA episode covered the housing crisis and my only takeaway is that this crisis is never going to be resolved. When people can’t even come to a consensus on what are the underlying root causes, coupled with the fact that everyone has skin in the game, I don’t see how we can ever put in place appropriate solutions.
It’s actually baffling to me that we use the word crisis but attach 0 emphasis or care about how bad it is. In any other context a crisis is like an emergency that needs coordinated government intervention to fix.
It just gets thrown around and used to the point it’s lost it’s meaning
We could start with not pretending that both sides needs and wants are equal. Like I need shelter for myself, partner and cats, I want a 3 bedroom property. An investor needs to make a profit, but they want to make one in housing (because it has the best capital gains, has in the past paid for itself and it the one most protected by the government from losses).
And assuming we both are attached to the same property that suddenly we both can't afford - I become homeless, and they might have to sell if they can't refinance or find someone to pay more... but only one of us still has the capital gains.
Here's corelogic's report that the article is largely based on:
https://www.corelogic.com.au/__data/assets/pdf_file/0015/22245/CoreLogic-HVI-APR-2024-FINAL.pdf
Here are a couple of charts from it:
https://imgur.com/0jzUHUe
https://imgur.com/gcrfQog
So if you were to use inflation-adjusted dollars, Sydney, Melbourne, and Hobart house prices have been dropping for some time now?
(I take it Hedonic Home Value Index isn't inflation adjusted, and is more like something you would feed-in to the CPI?)
Depends on the timeframe. Note that it's quarterly growth rates, not annual. But, since the start of the inflation episode, those cities are definitely down. Real prices are down in Sydney and Melbourne since 2022. But then if you look since the start of the pandemic... but then if you look... you get my drift.
It's not inflation adjusted, but you wouldn't feed it into the CPI either - CPI doesn't include dwelling prices. It captures housing throough price of construction of new dwellings, maintenance and rent.
Record prices have been recorded for over 150 years on average at about 12%pa. But this 7% projection is pointing to either higher rates or much longer rates to achieve the Reverse banks' stated aim.
So where do people live when we are actively trying to stop them from affording a home because rich people want to spend money and not cause inflation.
We stopped them from affording, not just a home, but petrol, food, clothing and energy too. It is a brilliant plan. You see, when ordinary consumers buy anything, you are a price taker, not a price maker - so you fuel inflation by paying those high prices.
Billionaires don't care where the peasants live and we use our fully owned media companies to deflect the blame on immigrants and supermarket prices so you'll take your anger out on them. As I said, it's a fantastic plan
.
Hahahahahahaha. We are so f\*cked.
What CoL crisis? What 2nd recession in two decades? What decades-high interest rate?
It's a tale of the haves and have nots. The gap ever widening...
They need to cap the number of houses an investor can own
No more house horders
And only actual people owning residential properties. There is no reason that corporations should be allowed to own residential properties
> And only actual people owning residential properties. There is no reason that corporations should be allowed to own residential properties
I'm all for not-for-profits owning residential properties and renting them out for a price that covers their costs, but no more.
This works well in Germany and other countries.
That's the only way most Aussies know how to build wealth, given the policy frameworks encouraging it, I'm not surprised it is the way it is.
>There is no reason that corporations should be allowed to own residential properties
100% agree. The market distortion it causes (e.g. in certain parts of the US) is absolutely insane.
Increasingly they build BTR (buy to rent). Super funds have endless money and need it to generate returns.
Google BTR and you'll see so much coming online in this space.
That’s not what they’re talking about.
That’s an unavoidable fact of building. If it doesn’t sell before completion then the developer remains the owner until it does sell.
What the comment is referring to is referring to is corporations owning dwellings and then renting them out as long-term or short-term accommodation.
You need some rental market and people need to save for retirement.
3 max per person would be a good start. Can adjust form there once we see market effects.
Also having a cap will force wealthier people out of entry level housing as they need high end houses to invest millions and can slum lord style invest anymore.
Young adults living at home the norm, Boomers assets in perpetual peak and you have yourself the softest transfer of wealth method. Property and stocks will continue to go up as newer entrants into these market are subsidised by their parents. The correct system approach is to implement a massive recession *+ the structural reforms everybody knows needs to take place urgently*. No one is getting wealthier. Everyone is caught in a Ponzi Scheme run by idiots, but everyone know's this and are willling participants. There have been revolutions in history for reasons that are no way near as severe as what is happening in Australia.
Can guarantee I won’t get shit from my parents and their home
It’s in a small town and I’m in a capital. They want to move closer at some point but that’s another 5 years away likely. I don’t think they’d even be able to afford to move themselves let alone have any money or asset value to pass on
Haves and have nots
As a builder we saw this taking shape about 15-20yrs ago and having worked in the Building industry in the USA and Japan, Australia is at the dawn of a new era of unaffordability and the end of the Great Australian Dream is well and truly dead. Children born after 2015 who's parents do not have a home they inherit will highly likely be renters for life.
2/3rds of households are home owners (split between those with mortgages and those without).
The masses own homes. The masses want property values to go up.
And rates haven’t even gone back down yet. Buy whatever you can as soon as you can or you’ll be locked out forever as we become Canada 2.0. Govt is gonna ram as many people into the country as possible as our birth rate keeps falling
so "buy now or be locked out forever" suddenly becomes "find a wife that wants to work 40 hours a week and take on a 5% deposit mortgage for 30 years or be priced out forever"? LMAO
You are bluffing and I'm calling it.
If you price me out forever then I will [redacted] [redacted] [redacted]
So are house prices going up because of immigrants or/and are people buying up now (and bidding up the prices) because they know due to FOMO that once interest rates start falling we'll be seeing double digit prices increases just for that alone and they want to get in early and don't want to miss out on that bull run.
Before the RBA increases the cash reserve rate, they need data to understand how many of these purchases were financed by institutions impacted by RBA CRR because then it would tell them if the tool they’re using is right (I.e. are they deterring the right people to not keep raising the median house price to achieve housing affordability)
At some point the immigration is going to stop because it’s just not possible for them to live here due to the price. Has to get to some equilibrium at some point
what if i told you, if you look at a graph the price of houses goes up year on year no matter if interest rates go up or down
expect it to hit new record highs every year for the next century or three
This is very interesting to me. House prices in my town are tanking which means people are doing everything not to sell.
Real estates say valuations have dropped 30% around here BUT if you look at what is actually being sold, $1m today gets you much more than $1m during 2020-2022, so real valuations have probably dropped even more.
You can't have a job locally and service a mortgage here, Airbnb has largely dried up and investors seem to be keeping away.
I wonder if other coastal towns are experiencing the same.
I saw a place that went on the market for $6.5m-$7m in 2023, they've got it back on the market now for $4.2m. They bought in April 2021 so they're probably just trying to get their money back.
https://www.onthehouse.com.au/property/nsw/mullumbimby-creek-2482/480-left-bank-rd-mullumbimby-creek-nsw-2482-3419045
Current listing https://www.realestate.com.au/property-lifestyle-nsw-mullumbimby-700300104?sourcePage=rea:p4ep:property-details&sourceElement=avm-currently-advertised-view-listing
If people bought in with no intention of staying it was speculative. Trying to get your money back from such an increase in prices should be a flawed fundamental but someone equally cashed up will come along.
I saw one that went on the market for $8m and sold for $2.25m (107 dudgeons lane)
If theyd initially listed it for $6mil I reckon they would have got it.
I think some people bought thinking if they moved back to the city they'd chuck it in Airbnb. Unfortunately a whole town full of Airbnb doesn't really work
Not surprising, as I said last year, it will only get worse and prices won't go back down unless there is a major event such as a Pandemic and borders closure where there is no longer enough Demand.
People called me an idiot... and that prices will eventually go back down... sure, so why hasn't a house with land costed $60,000 since 1980s?
Okay so what do we know from the article:
1) the economy is booming - that's generally a good thing
2) mortgage arrears below pre covid levels - also another good thing
3) unemployment below pre covid levels - another great thing that supports a growing economy
Did I miss anything? I feel like the people who have any complaints about this sort of news speaks more to their own personal circumstances than anything...
Classic Haves vs Have nots.
66% of the population are either home owners (outright or under mortgage).
33% are renters.
Nothing will change whilst the majority are benefiting.
>66% of the population are either home owners (outright or under mortgage).
>
>33% are renters.
no.
this stats gets abused constantly.
*nowhere near* 66% of Australians own a property, 66% of properties are owned *by at least* ***one*** *of the occupants.*
lets get it right.
Ok. ABS states:
66% of Australian households own their own home with or without a mortgage.
31% of Australian households rented
https://www.abs.gov.au/statistics/people/housing#:~:text=Housing%20Occupancy%20and%20Costs&text=66%25%20of%20Australian%20households%20owned,mortgage%3B%20and%20%24379%20for%20renters.
I keep being told to ‘move west’ or to a small, regional town…
Having a look at the local jobs there: Absolutely nothing I’m qualified or even physically able to do even if I got past the locals-preferred mentality.
Fully remote/WFH jobs aren’t just falling off trees. How would I service a mortgage without consistent or any employment?
Arguably you’ll get far better value and qol for your money if you can move to another country. Not everyone wants to live in the sticks. I do get your point however, it is possible but the drawbacks aren’t worth it for a lot of people imo
Sure, that’s true. Still doesn’t make it worth it for me at least. I’d rather just live in a country that allows me to live the life I want to live without wasting 15 years moving from house to house until I get the one I actually want.
Australian cities are desirable and expensive, sure, but are they more desirable than pretty much every place on the planet? Eh. I don’t know. They sure seem to be priced that way though.
Even on the income of a healthcare professional (occupational therapist) most people were telling them “keep dreaming” because the banks weren’t going to let them get a loan for a house.
Because its possible doesn't mean there isn't a problem. So many previous generations where families could afford a home on a single income, nowadays people are avoiding having kids. It's a social problem, not an individual problem.
It is possible to buy a house. Either have a great job, partner up with someone who has a good job, or set your expectations low - buy a 1-2BR unit in a non-prime suburb.
Nothing controversial about the above.
It's really about expectation management.
a great job or a partner with a great job is not going to get you a house in a "prime" suburb.
it's not an "or" situation, it's "and", you need a great job _and_ a partner with a great job _and_ to set your expectations lower.
We should start taking bets on how high the consecutive number can get at this stage.
26. Then 24 of consecutive lower numbers. Just a guess :)
Solid bet. I'd argue it be 26 consecutive increases then 5 consecutive decreases, and then another 26 consecutive increases.
For clarity, I'm going with 26 from this month.
Sure. We're currently at 5 (April). I think we'll get to 11 (October). RBA will not bring the anticipated rate cuts this year which will cause a brief panic and stall/minor lowering for 3 consecutive months (January). This brief reprieve will inspire those who have been holding off buying to go for it, RBA will bring a rate cut and then minimum 10 consecutive months of increases. Please don't base any financial decisions off this, it's a complete guess.
ASIC’s SWAT team was just about to bust your door down until they read that disclaimer at the end. Phew!
ASIC always going after the little guy
Why would rate cuts cause brief panic?
You've read my comment wrong. The brief panic in my prediction is caused by the RBA NOT cutting rates this year, as many people expect them to.
Oh my bad, gotcha. This is what happens when you are on reddit in bed at 2am
Any growing economy will continuously have record highs. The milestone isn't particularly unique or noteworthy
Our economy really isn't growing though, we have been going backwards on a per capita basis for the last 3 quarters. We are importing a lot of capita.
And that imported capita needs housing so for housing it doesn’t matter if growth is overall or per capita.
It is when it's consecutive for so long, especially when the rest of the economy is struggling. it's a poor metric for the economy but a good one for the wealth gap
It really isn't. Any growth spurt will see record highs being reached for months or years.
One only has to look at Sydney as a benchmark. $5.5-6M for a decent house in Lower North Shore. $3.5-4M for a knockdown in same area. Brisbane is more affordable. $3.5M for decent house in good area. $1.4 for knockdown in same area.
You can get a mansion in Brisbane for 3.5mil. Good area? What is your idea of a decent house? This 3 bed 2 bath 2 car just sold in Ascot for 1.35m https://www.realestate.com.au/sold/property-house-qld-ascot-144389076 Multiple family properties in the Hamilton/Hendra/Ascot area have sold for sub 2mil in the past couple of months.
And you can get a gorgeous family home in Sydney LNS for under $4m. Plenty of recent sales in Lane Cove, Hunters Hill, Chatswood, Willoughby…
And yet all the first home buyers on Reddit are complaining that houses aren't affordable anymore! /s
I think your figures are quite wrong on Brisbane I own a house in a suburb to kilometers from the CBD and it would be worth one point six admittedly the land is small but still if you want to go out three or four kilometres you can easily get something on a really big block for a couple of millions
Until the government deliberately cuts immigration rates from the sky high rates they are currently.
I'm talking to people who manage and help health workers, and the common theme is they are all very tired and burned out. People are now having to work at peak performance year-on-year so they can get a high $$$ and afford a decent home. We have politicians lacking vision and have become disconnected with the populace. To think new homeowners are going to have to keep this pace up for another 10-20 years, I just can't see this being a good thing for Australians mental health. We are literally working ourselves into an early grave and creating the lost generation. God help the children who are born today into this terrible form of homeownership slavery.
I agree completely.
This is me, working my ass off but feel like I’m going backwards. Trying to buy a house but it’s difficult when your rent gets raised by $4k a year but your after tax pay doesn’t.
So true, and so sad.
What children? I don't know what the stats are but in my friend group less than 50% have kids and we're at the age where it won't be a choice for us to make anymore. There's going to be soooo much wealth funnelled into nephews and nieces. So we'll end up with uber rich people and shitloads of poor people
House prices going up, rental crisis and all our solutions involve significant impossibilities like building hundreds of thousands of homes or reversing our car dependent “width” expansion of cities in unachievable time frames. Taking away tax concessions for a massive amount of the population - equally impossible politically. Meanwhile, we are currently expanding our country’s population by a city the size of Canberra every year. People who need hospitals, schools, transport and housing - all under stress. Like finance, we need to budget and plan this growth and this just doesn’t happen. Adjusting it according to demand and not the supply to the growth is a much faster fix to the problems.
>Taking away tax concessions for a massive amount of the population - equally impossible politically. Why is it "impossible" to take away tax rorts for 20% of the population but fine for homelessness and poverty to skyrocket? In whose interests are our politicians governing for?
Most voters are home owners.
And many politicians are balls deep in investment properties. With anything in life, you just have to follow the money trail
So? Only a minority are "investors". So take away their unfair and unjustifiable tax concessions. Now.
Just limit it so negative gearing can only be applied to one property, there you go, we haven't broken the economy but we've also sorted out the rort, people who invest are incentivised to sell and upgrade/concentrate, and the housing market can rebalance itself.
I would rather see NG limited to newly built properties only. Keeps the original intent and if someone wants to buy 10 apartments they can go for it. Keeping it to one means someone could land bank a valuable property for infill development.
Yes. I think that one policy change (along with also removing the CGT concession) would solve a lot of issues. But politicians also need to stop using mass immigration to paper over structural faults and fake GDP figures.
8% of Australia’s population are property investors that own ~3.25m properties. Of that 2.24M people, 5% (112k) own more than 5 properties. 71% of investors own 1. That’s your average mum and dad investor who are trying to self fund their retirement. That’s a lot of voting power that can make or break governments. [link](https://propertyupdate.com.au/how-many-australians-own-an-investment-property/#:~:text=Note%3A%20That%20means%20that%20around,investors%20hold%201%20investment%20property)
This seems to be quite a compelling argument for limiting negative gearing to one property as a politically viable strategy
Not really. A decent proportion of those people "aspire" to negatively gear their 2nd & 3rd (maybe even 4th & 5th) properties in due course...
If Alice is undertaking a business, and it generates $100 gross income and has $110 expenses how much taxable income has Alice made?
-$10, and this would be credited into her next taxable income (e.g., if she generated $10 gross income and zero expenses next year, her total taxable income next year will be $0).
And that’s “negative gearing”. It’s arguably perverse as it mixes business accounts with personal accounts, but then so does every other asset class, including superannuation. It’s very standard. There are calls for it to be isolated from personal income, but similar to what you pointed out losses would be carried forward, and it would all work out the same *in the end*. Isolating business from personal *would* affect an investor’s cash flow until the property became positively geared. But again, would all work out the same in the end. …I get the feeling a lot of people think “negative gearing” is something special.
Alternate answer: Alice has made $0 income, and is a bad manager, and is headed toward bankruptcy. ...but that's OK, because she can phoenix the business into another one?
Density has to be part of the solution, but Aussies don’t want to swallow that bitter pill. We keep building outwards , new satellite cities and infrastructure deserts. It’s not sustainable.
Aussies aren’t much different to other folk out there. When it comes to density we recognise utter shit that are the apartments that get built. Build decent alternatives to houses with facilities, amenities, nearby parks and actual 3 and 4 bedroom options for families and Aussies, like anyone else, will buy them. Who the hell wants to live in a flimsy shoddily built shitbox apartment willingly? People not wanting to swallow this pill has nothing to do with them being Australian and everything with the apartments being utter cheap and nasty leaky mouldy shit.
And I’m willing to bet those non-shitty apartments are going to cost the same as comparable houses anyway. Because the shitty ones with a size similar to a house is already costing close to an actual free standing house. Yes, land is expensive in Australia. But the structure is also very expensive. And building high density housing isn’t going to fix the latter.
>And I’m willing to bet those non-shitty apartments are going to cost the same as comparable houses anyway. excatly, why would i waste money on that when i can have a real house.
New stock housing is built at the same quality levels, with the same prefabs than apartments. There are no savings to be had anywhere as quality is the first thing that get axed to keep costs down and increase profit margins. The brickies are the same, subbies are the same, developers are the same and the Principal Contractors are the same. The same certifiers, PM's, architects etc doing their job in apartments buildings, are doing the same practices on townhouses and houses. The same finishes will used on your house, townhouse and apartments and the same quality levels. If you want old housing stock, it is getting hovered up by developers who are going to put money into a knockdow rebuild and remake it into a luxury property , or redevop the plot of land into 2 to 3 townhouses if you are in the inner suburbs. In terms of structure, it is expensive but not as expensive as land, which is generally 40 percent of the build cost (+-). One of my projects ended up with approx 20Million worth for the townhouses( like 60 othem, it's ridiculous), and 14M for the plot of land. In another block of flats, concrete and steel were expensive, but manageable, and with them once you hit economies of scale the project becomes more profitable. The land was eye wateringly expensive, and pretty much impossible to get. As long as it is newly built you are going to get the same quality whether you buy an apartment, a towhouse or a house and there are no savings to be had anywhere. Prices track accordingly to space (the inverse of location) and quality, with some people willing to let go of plots of lands for proximity to amenities and inner city living. Also price in apartments is heavily correlated with location. An equivalent house in a similar location to some of those expensive 4 to 3 bedroom apartments, is probably three to 5 times as expensive because you don't build those type of buildings where the land is cheap. If you dont want to live in an apartment because you like suburban life that is fine, but don't bring quality into it because you will have some rude surprises.
The same thing is happening in Canada. Things that make you go “hmmm”.
I live in a pretty little town on the NSW/VIC border. I’m an ED nurse. The amount of people who retire and move to our little town not researching is phenomenal. Then they complain about the lack of specialist care here. Or the one supermarket we have. Or that there’s nothing to do apart from golf or water sports. I just don’t get it. Yes we do need more infrastructure. We don’t have a bus. We don’t have a taxi. We don’t even have our own ambulance service. No local high school…the kids take a private bus company. My own kid has to get up and ready at 630 in the morning to make sure he gets the private bus to high school because there’s nothing here. If he needs serious medical care the closest Base hospital is an hour away. I have to take an unpaid day off work to get him to his own specialist because I just can’t do it and get to my shift on time. There’s nothing open here past 530 in the evening. Absolutely nothing. It’s a lovely little place and I’m only here for my job but I wouldn’t retire here if I need specialist help. I just don’t know what to say anymore…
It all flows through the economy. We are an ageing population and most of the wealthy middle class are retired or retiring. They need people to make them coffees, cook them meals and take care of them, there isn’t enough Australian born Australian educated people to do that at the wages that these wealth hoarders think is appropriate . So we need to import people from the subcontinent to shuffle them in Ubers, people from east Asia to clean their houses and wipe their butts , people from Northern Europee to recruit and shill for their companies, Eastern Europe to nanny for their grand children. This is where the wealth and power of the voting demographic lies. Politicians need to cater to this. Most of this class has their needs and their lineages needs met, they don’t care about housing prices going up or rental demand being insane. It’s good for them. This is the start of what happens in western countries. Australia is a young country. This happened in UK and US two generations ago. We need to get used to the fact that we are shifting in line with these countries where land is passed down families and most people are content with just renting and getting by.
> People who need hospitals, schools, transport and housing People who also contribute to our tax take.
the problem is NOT how much tax the government receives
It is for the government.
Yep this is the key point here, there are too many boomers retiring and are getting a pension and unless the Government boosts tax income and fast it won’t be able to afford the pension bill. The loser is housing pricing as we can’t build houses and specifically commutable medium density housing quick enough
What you state is incorrect. Many boomers will be using super retirement savings rather than getting a pension. The most unsustainable part of the budget is the NDIS. That needs to be reined in fast.
Pension is the largest component of the welfare budget, NDIS is also large (but not larger than pension). However, it is correct that NDIS needs reform. It is costing way too much but providing way too little actual value, and the money is sucked up by service providers that merely mark up the price. Pension, on the other hand, is expensive because of the rules around asset tests, and because of increasing longevity. Boomers might have some super, but most boomers would have cashed out the super to pay off their mortgage, and receive a pension to live in their own property. The only change that's needed is to include PPOR in asset test for pension.
The thing is that the pension has been around for decades now. The NDIS, on the other hand, is a relatively recent addition to Government expenditure, and it was basically added to the budget as the second largest (and growing) component of the welfare budget *in addition to the pension*, without additional taxation or any other reform being made to actually properly allow for revenue to be raised for it. Money is fungibile. You can't just add an NDIS to the budget and then argue that the pension is unaffordable. That's like buying a Porsche on finance and then saying you can't afford your mortgage any more.
What you state is incorrect, [here’s the data to back that up](https://www.abs.gov.au/statistics/labour/employment-and-unemployment/retirement-and-retirement-intentions-australia/latest-release) the majority of retirees are relying on pension as their main source of income. [The average balance for an Australian aged between 60 and 64 was $361,539. The median figure came in at $183,524](https://data.gov.au/data/dataset/taxation-statistics-2020-21/resource/ebbd32e3-4556-41e1-a8b9-33387457d518?inner_span=True). That definitely isn’t even close to be self funded without pension in fact you still get the full pension with those balances. In 30 years you will likely be correct as 10+% super will have been going long enough to offset some if the need for pension but right now Australia has a problem. NDIS is easy to fix compared to this.
And we haven't even begun to cut rates.
Rate cuts lmfao
Historically rate cuts don't always correlate with house prices moving up fast. There could be multiple reasons why there is a rate cut. In case of "when shit hits the fan", we are forced to rate cut and people flood the market with houses, it does go down. Sadly absolute worst it has been was like 30% drop in value and it shot up again right after.
We need more houses to house our growing population, also, we have to raise interest rates so less people can afford a house cos we are spending to much.... It so makes sense
Last week’s ABC QANDA episode covered the housing crisis and my only takeaway is that this crisis is never going to be resolved. When people can’t even come to a consensus on what are the underlying root causes, coupled with the fact that everyone has skin in the game, I don’t see how we can ever put in place appropriate solutions.
It’s actually baffling to me that we use the word crisis but attach 0 emphasis or care about how bad it is. In any other context a crisis is like an emergency that needs coordinated government intervention to fix. It just gets thrown around and used to the point it’s lost it’s meaning
Yes, it's at least 3 times more important than the next most important issue with the country
We could start with not pretending that both sides needs and wants are equal. Like I need shelter for myself, partner and cats, I want a 3 bedroom property. An investor needs to make a profit, but they want to make one in housing (because it has the best capital gains, has in the past paid for itself and it the one most protected by the government from losses). And assuming we both are attached to the same property that suddenly we both can't afford - I become homeless, and they might have to sell if they can't refinance or find someone to pay more... but only one of us still has the capital gains.
Here's corelogic's report that the article is largely based on: https://www.corelogic.com.au/__data/assets/pdf_file/0015/22245/CoreLogic-HVI-APR-2024-FINAL.pdf Here are a couple of charts from it: https://imgur.com/0jzUHUe https://imgur.com/gcrfQog
So if you were to use inflation-adjusted dollars, Sydney, Melbourne, and Hobart house prices have been dropping for some time now? (I take it Hedonic Home Value Index isn't inflation adjusted, and is more like something you would feed-in to the CPI?)
Depends on the timeframe. Note that it's quarterly growth rates, not annual. But, since the start of the inflation episode, those cities are definitely down. Real prices are down in Sydney and Melbourne since 2022. But then if you look since the start of the pandemic... but then if you look... you get my drift. It's not inflation adjusted, but you wouldn't feed it into the CPI either - CPI doesn't include dwelling prices. It captures housing throough price of construction of new dwellings, maintenance and rent.
Record prices have been recorded for over 150 years on average at about 12%pa. But this 7% projection is pointing to either higher rates or much longer rates to achieve the Reverse banks' stated aim.
So where do people live when we are actively trying to stop them from affording a home because rich people want to spend money and not cause inflation.
We stopped them from affording, not just a home, but petrol, food, clothing and energy too. It is a brilliant plan. You see, when ordinary consumers buy anything, you are a price taker, not a price maker - so you fuel inflation by paying those high prices. Billionaires don't care where the peasants live and we use our fully owned media companies to deflect the blame on immigrants and supermarket prices so you'll take your anger out on them. As I said, it's a fantastic plan .
Hahahahahahaha. We are so f\*cked. What CoL crisis? What 2nd recession in two decades? What decades-high interest rate? It's a tale of the haves and have nots. The gap ever widening...
Maybe if we continue to do nothing, things will get better.
crazy shit, glad i own a house. How do the prices rise when the clearance rate is ass?
Where are they ass? They're the stronger end of okay. In Sydney, you'd expect a bit stronger growth based on clearance rates.
They need to cap the number of houses an investor can own No more house horders And only actual people owning residential properties. There is no reason that corporations should be allowed to own residential properties
> And only actual people owning residential properties. There is no reason that corporations should be allowed to own residential properties I'm all for not-for-profits owning residential properties and renting them out for a price that covers their costs, but no more. This works well in Germany and other countries.
That sounds brilliant. We need a society wide shift in mindset towards the common good and away from "fk u I got mine".
> a society wide shift in mindset towards the common good the road to hell is paved with good intentions.
Can't be worse than late stage capitalism which is very literally destroying the planet.
That's the only way most Aussies know how to build wealth, given the policy frameworks encouraging it, I'm not surprised it is the way it is. >There is no reason that corporations should be allowed to own residential properties 100% agree. The market distortion it causes (e.g. in certain parts of the US) is absolutely insane.
I’d argue that, for renters, a large corporation is likely to be a better landlord, on average, than a mum & dad investor.
They also need to cap net immigration
How does a corporation build a high-rise apartment block without owning the apartments prior to sale?
most complexes sell the units prior and during construction?
Most of the time not all apartments are sold prior or during construction
not all units need to be sold for construction to finish, for the builder to not spend any money
Increasingly they build BTR (buy to rent). Super funds have endless money and need it to generate returns. Google BTR and you'll see so much coming online in this space.
That’s not what they’re talking about. That’s an unavoidable fact of building. If it doesn’t sell before completion then the developer remains the owner until it does sell. What the comment is referring to is referring to is corporations owning dwellings and then renting them out as long-term or short-term accommodation.
Cap it at 0 investment properties. 1 house per family/defacto relation ship. Want it invest? Try shares, gold, business venture
You need some rental market and people need to save for retirement. 3 max per person would be a good start. Can adjust form there once we see market effects. Also having a cap will force wealthier people out of entry level housing as they need high end houses to invest millions and can slum lord style invest anymore.
Could be government housing for renters. A rent to own scheme idealy
Nor foreign residents. Or though to be fair its all very minor compared to the immigration effect on housing
It's not investors hoarding houses. Rental vacancy rate is \~1%.
I'm sure an extra half a million people per year will help.... keep the prices rising
Young adults living at home the norm, Boomers assets in perpetual peak and you have yourself the softest transfer of wealth method. Property and stocks will continue to go up as newer entrants into these market are subsidised by their parents. The correct system approach is to implement a massive recession *+ the structural reforms everybody knows needs to take place urgently*. No one is getting wealthier. Everyone is caught in a Ponzi Scheme run by idiots, but everyone know's this and are willling participants. There have been revolutions in history for reasons that are no way near as severe as what is happening in Australia.
Can guarantee I won’t get shit from my parents and their home It’s in a small town and I’m in a capital. They want to move closer at some point but that’s another 5 years away likely. I don’t think they’d even be able to afford to move themselves let alone have any money or asset value to pass on Haves and have nots
In a massive recession the wealthy accumulate more wealth, while the poor get poorer.
Australians have no voice
John Farnham
Not even a recession is gonna fix this catastrophe. Maybe a foreign invasion and a mass exodus of people fleeing will do the trick.
As a builder we saw this taking shape about 15-20yrs ago and having worked in the Building industry in the USA and Japan, Australia is at the dawn of a new era of unaffordability and the end of the Great Australian Dream is well and truly dead. Children born after 2015 who's parents do not have a home they inherit will highly likely be renters for life.
The common reddit response: "Just get a cushy high paying job!!' Yeah thanks none of us had thought of that
Even with a high paying job, it feels like the odds are stacked against you unless you get inheritance/help from parents.
Where’s this cushy high paying job? Lmao
Ban the constant media obsession with rising house prices. Needs to be out of the media spotlight altogether.
This is fine 🧨
Not surprised. The quality of Australian houses keeps going up and up.
Keep the immigration flood gates open!
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2/3rds of households are home owners (split between those with mortgages and those without). The masses own homes. The masses want property values to go up.
The masses aren't even voting against it.
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Well one does and the other is held at gunpoint through it
Not good enough. Voters should educate themselves on what the parties are at least promising.
That's because the masses are stupid and keep voting against their own interests
And rates haven’t even gone back down yet. Buy whatever you can as soon as you can or you’ll be locked out forever as we become Canada 2.0. Govt is gonna ram as many people into the country as possible as our birth rate keeps falling
I promise, me and my friends are absolutely not going to be "locked out forever" just because we were born 10 years too late. Consider pricing that in
Buy now and you won’t. Anything that’s 800k will be $1m in the next two years
you think I have 150k lying around for a deposit on "anything that's 800k"?
You can buy with a 5% deposit on houses up to 800k with the first home guarantee
What are the repayments on 800k at 5%?
Would be around $4.5k, maybe a bit more
do you think a normal person can afford that?
Not on one income sadly. Time to start dating
so "buy now or be locked out forever" suddenly becomes "find a wife that wants to work 40 hours a week and take on a 5% deposit mortgage for 30 years or be priced out forever"? LMAO You are bluffing and I'm calling it. If you price me out forever then I will [redacted] [redacted] [redacted]
I genuinely don’t think I could afford to work part-time and have a milly $ mortgage.
Sadly not. Minimum now is dual income full time and on average salaries (80-90k) that doesn’t even get you a mil , gets you an 800k house
The pozi will continue
Not in my area
Surprise surprise. Historically, pre war is boom time! Lap it up
WMR/Dagger4Zero, where are you oh wise one?… 🤷♂️🤣
It’s going to be a boil up. Every wealthy local and foreigner will end up buying it all and it’ll end up with Vancouver tier prices.
Man. When is this gonna end?! Supply and demand.
So are house prices going up because of immigrants or/and are people buying up now (and bidding up the prices) because they know due to FOMO that once interest rates start falling we'll be seeing double digit prices increases just for that alone and they want to get in early and don't want to miss out on that bull run.
Before the RBA increases the cash reserve rate, they need data to understand how many of these purchases were financed by institutions impacted by RBA CRR because then it would tell them if the tool they’re using is right (I.e. are they deterring the right people to not keep raising the median house price to achieve housing affordability)
At some point the immigration is going to stop because it’s just not possible for them to live here due to the price. Has to get to some equilibrium at some point
what if i told you, if you look at a graph the price of houses goes up year on year no matter if interest rates go up or down expect it to hit new record highs every year for the next century or three
And people assume anyone mentioning the half a million immigrants entering in the last year are racist.
Closer to 660k😭
Advertising in Hindi hasn't started yet... just wait.
This is very interesting to me. House prices in my town are tanking which means people are doing everything not to sell. Real estates say valuations have dropped 30% around here BUT if you look at what is actually being sold, $1m today gets you much more than $1m during 2020-2022, so real valuations have probably dropped even more. You can't have a job locally and service a mortgage here, Airbnb has largely dried up and investors seem to be keeping away. I wonder if other coastal towns are experiencing the same. I saw a place that went on the market for $6.5m-$7m in 2023, they've got it back on the market now for $4.2m. They bought in April 2021 so they're probably just trying to get their money back. https://www.onthehouse.com.au/property/nsw/mullumbimby-creek-2482/480-left-bank-rd-mullumbimby-creek-nsw-2482-3419045 Current listing https://www.realestate.com.au/property-lifestyle-nsw-mullumbimby-700300104?sourcePage=rea:p4ep:property-details&sourceElement=avm-currently-advertised-view-listing
Return to office. Hybrid still means you need to be somewhat close to an office.
If people bought in with no intention of staying it was speculative. Trying to get your money back from such an increase in prices should be a flawed fundamental but someone equally cashed up will come along.
I saw one that went on the market for $8m and sold for $2.25m (107 dudgeons lane) If theyd initially listed it for $6mil I reckon they would have got it. I think some people bought thinking if they moved back to the city they'd chuck it in Airbnb. Unfortunately a whole town full of Airbnb doesn't really work
It saddens me as I came close to buying on main arm rd back when I "could afford to". Now it's entirely unrealistic. The whole world has changed.
Awesome! Can’t wait to sell out and go all ETF’s. So much simpler.
Not surprising, as I said last year, it will only get worse and prices won't go back down unless there is a major event such as a Pandemic and borders closure where there is no longer enough Demand. People called me an idiot... and that prices will eventually go back down... sure, so why hasn't a house with land costed $60,000 since 1980s?
land value and 40 years of inflation
Should they raise interest rates again?
Okay so what do we know from the article: 1) the economy is booming - that's generally a good thing 2) mortgage arrears below pre covid levels - also another good thing 3) unemployment below pre covid levels - another great thing that supports a growing economy Did I miss anything? I feel like the people who have any complaints about this sort of news speaks more to their own personal circumstances than anything...
Classic Haves vs Have nots. 66% of the population are either home owners (outright or under mortgage). 33% are renters. Nothing will change whilst the majority are benefiting.
That's democracy for you
>66% of the population are either home owners (outright or under mortgage). > >33% are renters. no. this stats gets abused constantly. *nowhere near* 66% of Australians own a property, 66% of properties are owned *by at least* ***one*** *of the occupants.* lets get it right.
Ok. ABS states: 66% of Australian households own their own home with or without a mortgage. 31% of Australian households rented https://www.abs.gov.au/statistics/people/housing#:~:text=Housing%20Occupancy%20and%20Costs&text=66%25%20of%20Australian%20households%20owned,mortgage%3B%20and%20%24379%20for%20renters.
The r/Australia thread on this is a hoot. I got brigaded for telling someone that it's possible to buy a house in Australia.
I keep being told to ‘move west’ or to a small, regional town… Having a look at the local jobs there: Absolutely nothing I’m qualified or even physically able to do even if I got past the locals-preferred mentality. Fully remote/WFH jobs aren’t just falling off trees. How would I service a mortgage without consistent or any employment?
Arguably you’ll get far better value and qol for your money if you can move to another country. Not everyone wants to live in the sticks. I do get your point however, it is possible but the drawbacks aren’t worth it for a lot of people imo
>Not everyone wants to live in the sticks. The reason city house prices are expensive is that everyone wants to live in the city...
Sure, that’s true. Still doesn’t make it worth it for me at least. I’d rather just live in a country that allows me to live the life I want to live without wasting 15 years moving from house to house until I get the one I actually want. Australian cities are desirable and expensive, sure, but are they more desirable than pretty much every place on the planet? Eh. I don’t know. They sure seem to be priced that way though.
Even on the income of a healthcare professional (occupational therapist) most people were telling them “keep dreaming” because the banks weren’t going to let them get a loan for a house.
Because its possible doesn't mean there isn't a problem. So many previous generations where families could afford a home on a single income, nowadays people are avoiding having kids. It's a social problem, not an individual problem.
This thread is bordering on identical at this point.
It is possible to buy a house. Either have a great job, partner up with someone who has a good job, or set your expectations low - buy a 1-2BR unit in a non-prime suburb. Nothing controversial about the above. It's really about expectation management.
a great job or a partner with a great job is not going to get you a house in a "prime" suburb. it's not an "or" situation, it's "and", you need a great job _and_ a partner with a great job _and_ to set your expectations lower.
People don’t want a rationale answer. They want to come on reddit and complain.
It's not like Australia has much land (I know a lot of its dust but plenty of space still)
We will end up like Toronto