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  1. #161
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    Quote Originally Posted by Elijahs Mum View Post
    Prices won't fall dramatically in Sydney - investors are mainly buying new units in our area and if they leave negative gearing for new dwellings it won't change a thing - it "may" make the older units slightly more affordable but it still comes down to supply and demand - sydney suburbs are not getting any bigger yet we have more people moving in so obviously there isn't enough dwellings of any kind for everyone , especially houses , so it pushes the prices up

    When we had the burst of first home buyers buying up everything to take advantage of the grant a few years back they all bought units and the majority of them rented them out anyway!
    A condition of the first homeowners grant was you must live in the dwelling continuously for at least 6 months so if people were renting it out then they weren't supposed to be.

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    Default Negative Gearing - Politics talk

    Quote Originally Posted by A-Squared View Post
    Property prices are based on supply and demand right?

    So if for example there are 100 properties. 60 were owned by owner occupiers and 40 were owned by investors. If say all of those investors left the market because of the changes proposed, their 40 houses would be available for sale, so those 40 houses would then be available to the 40 renters. So supply stays the same and demand stays the same = no change in prices.
    If all 40 investors sold their house then there would be an increase in supply = cheaper housing.

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    Quote Originally Posted by BigRedV View Post
    A condition of the first homeowners grant was you must live in the dwelling continuously for at least 6 months so if people were renting it out then they weren't supposed to be.
    They did, for 6 months then rented them out

  4. #164
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    Quote Originally Posted by A-Squared View Post
    Property prices are based on supply and demand right?

    So if for example there are 100 properties. 60 were owned by owner occupiers and 40 were owned by investors. If say all of those investors left the market because of the changes proposed, their 40 houses would be available for sale, so those 40 houses would then be available to the 40 renters. So supply stays the same and demand stays the same = no change in prices.
    Demand comes into it, but at the end of the day the price of a property price is determined by what someone is willing to pay for it.

    Remove the negative gearing component, and the sale price of properties could potentially decrease if property becomes less attractive for investors and the people left in the market (ie demand) are not willing to pay as much as the investors were.
    Last edited by SSecret Squirrel; 26-02-2016 at 21:58.

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    Quote Originally Posted by SSecret Squirrel View Post
    Demand comes into it, but at the end of the day the price of a property price is determined by what someone is willing to pay for it.
    Yes and in NSW they have now brought in a 10% margin in price guides to stop agents underquoting to bring more people in.

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    Quote Originally Posted by BigRedV View Post
    If all 40 investors sold their house then there would be an increase in supply = cheaper housing.
    Depends on your area - technically in our area as disused before there is a 6% investor market, out of that 6% when you work out how many would be negatively geared ( let's say 50% for arguments sake) so 3% of the properties would be effected but even then not all would sell up as capital gain is still a great reason to hold onto property ( so again let's say 50% do) that leaves 1.5% of your market that would sell - ( roughly 170 properties ) and they would not all sell at once so no it's not enough to make an big impact on prices because there is so much demand anyway ( worst case if they did all sell at once it would only cause a temporary drop anyway)

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    A-Squared  (26-02-2016),BH-KatiesMum  (27-02-2016)

  9. #167
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    I really think it's more complicated than getting rid of negative gearing = cheaper housing.

    The knock on effect of tax changes usually take years to play out especially in something like a housing market.

    The main problem with negative gearing is it just costs too much in lost tax for no good reason. In a country that can't afford it it should go. We are cutting benefits for single mums and low income earners yet still allowing this. It doesn't make sense.

    This comes back to my problem with non fixed terms for governments. If governments had some guts and were prepared to give things 10 years to work before panicking about losing an election and caving we might see positive change. But we won't.

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    BH-KatiesMum  (27-02-2016),binnielici  (27-02-2016),gingermillie  (27-02-2016),Marshy68  (26-02-2016),SSecret Squirrel  (26-02-2016),witherwings  (26-02-2016)

  11. #168
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    Quote Originally Posted by Elijahs Mum View Post
    Depends on your area - technically in our area as disused before there is a 6% investor market, out of that 6% when you work out how many would be negatively geared ( let's say 50% for arguments sake) so 3% of the properties would be effected but even then not all would sell up as capital gain is still a great reason to hold onto property ( so again let's say 50% do) that leaves 1.5% of your market that would sell - ( roughly 170 properties ) and they would not all sell at once so no it's not enough to make an big impact on prices because there is so much demand anyway ( worst case if they did all sell at once it would only cause a temporary drop anyway)
    Given the prices around here I don't know many first home buyers who could afford around here, even units. When a 3 bedroom unit in Wolli Creek is well over $1 million, first home buyers have to look elsewhere.

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    Quote Originally Posted by BigRedV View Post
    If all 40 investors sold their house then there would be an increase in supply = cheaper housing.
    But demand would have gone up if all 40 renters wanted to buy instead of rent. = no change to prices.

  13. #170
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    Quote Originally Posted by BigRedV View Post
    Yes and in NSW they have now brought in a 10% margin in price guides to stop agents underquoting to bring more people in.
    This has been the case in SA for many many years.


 

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