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  1. #171
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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.

    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.
    Not exactly true, the numbers to investors still need to stack up. Most investors use negative gearing at the beginning of their investment with the aim to eventually positively gear it or make a profit, this can't happen if they just pay 'what ever it takes to beat out the first home owners'.

  2. #172
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    Quote Originally Posted by Sonja View Post
    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.
    Totally agree with this! Policies aren't in place long enough to be effective. Complete waste of money and energy. Politicians care more about being in power than they do about making any positive change.

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  4. #173
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    Quote Originally Posted by BigRedV View Post
    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.
    This is an important point, first home owners need to buy where they can afford. My SIL used to live in Western Sydney and housing there was very affordable. Maybe some first home owners need to think about buying somewhere not so ideal instead of looking to buy their dream home.

  5. #174
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    Default Negative Gearing - Politics talk

    Quote Originally Posted by A-Squared View Post
    But demand would have gone up if all 40 renters wanted to buy instead of rent. = no change to prices.
    Your example assumes that people who rent can immediately become home owners. This just isn't the case. There are 2 distinct markets - buyers and renters. Imagine if in your example of 40 investors putting their properties on the market, 20 of them are snapped up by renters who could afford to buy. The remaining 20 investment owners are still trying to sell their properties but the properties are just sitting there on the market for weeks because no one can afford to buy. It takes some time for them to adjust their expectations and reduce their asking price. The other 10 investors realise it is not a good market to sell in at the moment and decide to hold on to the property and start renting again. All of a sudden, 20 renters are bidding for 10 rental properties, and of course, the law of demand and supply dictates the price - which is now significantly higher than it was before. The remaining 10 homeless people will either have to move somewhere else because there's just nothing available, or wait for the price to drop for those other 10 houses before being able to afford to buy. More likely, since now rent is so lucrative, those 10 properties are bought by other investors who then rent it out to the 10 homeless people. Eventually prices will adjust but the rent has just gone up.
    Last edited by witherwings; 26-02-2016 at 22:23.

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  7. #175
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    People seem really confused about what is being proposed. My understanding is that if you have properties that are currently negatively geared they can stay that way, it will only be for future purchases.
    The way prices will come down is because negative gearing would only be offered on new builds, hence increasing housing stock. And there would be less competition for purchasing existing houses as investors would either have to positively gear in this instance or wear their losses.

    Anyway I totally agree any big change in policy needs years for meaningful data to be established on the effect. The plural of anecdote is not data

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  9. #176
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    Quote Originally Posted by witherwings View Post
    Your example assumes that people who rent can immediately become home owners. This just isn't the case. There are 2 distinct markets - buyers and renters. Imagine if in your example of 40 investors putting their properties on the market, 20 of them are snapped up by renters who could afford to buy. The remaining 20 investment owners are still trying to sell their properties but the properties are just sitting there on the market for weeks because no one can afford to buy. It takes some time for them to adjust their expectations and reduce their asking price. The other 10 investors realise it is not a good market to sell in at the moment and decide to hold on to the property and start renting again. All of a sudden, 20 renters are bidding for 10 rental properties, and of course, the law of demand and supply dictates the price - which is now significantly higher than it was before. The remaining 10 homeless people will either have to move somewhere else because there's just nothing available, or wait for the price to drop for those other 10 houses before being able to afford to buy. More likely, since now rent is so lucrative, those 10 properties are bought by other investors who then rent it out to the 10 homeless people. Eventually prices will adjust but the rent has just gone up.
    Totally see what you're saying and agree, I was giving that example in response specifically to the comment that alluded that if investors weren't buying as many properties that magically renters could all afford to buy and not rent.

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  11. #177
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    Default Negative Gearing - Politics talk

    Quote Originally Posted by A-Squared View Post
    This is an important point, first home owners need to buy where they can afford. My SIL used to live in Western Sydney and housing there was very affordable. Maybe some first home owners need to think about buying somewhere not so ideal instead of looking to buy their dream home.
    Housing in western Sydney isn't even really affordable anymore. Median house price in Sydney's west is $692k. Is that really affordable for average wage earners?

    Land value in Blacktown (very working class suburb) increased 47%
    http://m.smh.com.au/nsw/residential-...06-gm0gqy.html

    This is the cheapest house I could find in Blacktown which is 35km from cbd. The rest of the houses were well over $600k and some were close to $1 million. And this road this house is on is a very busy main road.

    ImageUploadedByThe Bub Hub1456513887.893821.jpg

    A block of land in Sydney's outer suburbs is more expensive than a house in Melbourne.

    http://www.domain.com.au/news/a-bloc...160218-gmwhkt/

    What $1 million can buy you in Sydney...how many first home buyers are in the $1 million market?
    http://www.domain.com.au/news/what-a...160204-gmizf8/



    Would you want to live in Elizabeth? Because that's about the only comparable option available to people in Sydney. And even then, houses are all still over $400k. As I posted earlier in the thread, housing commission area, cheapest house available for sale is $409k. If I didn't own a house and this was my only option I wouldn't buy. I grew up around there and I work there, no way I'm raising my own kids there. This is where the show struggle street was filmed. No thanks.

    ImageUploadedByThe Bub Hub1456513190.929250.jpg

    I really don't think people understand the ridiculous house prices in Sydney.

    The first home owner grant is available for new dwellings only that are under $750k. You would be pushing shiz uphill to find property like that in Sydney.
    Last edited by BigRedV; 27-02-2016 at 05:23.

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  13. #178
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    Default Negative Gearing - Politics talk

    Quote Originally Posted by A-Squared View Post
    Totally see what you're saying and agree, I was giving that example in response specifically to the comment that alluded that if investors weren't buying as many properties that magically renters could all afford to buy and not rent.
    I didn't say that all renters would be able to afford to buy, I just simply said that if there were more houses on the market because investors were selling there would be an increase in supply and if investors weren't buying then there would be less demand.
    Last edited by BigRedV; 27-02-2016 at 05:30.

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    I don't understand negative gearing 😜 but we have a old house paid 210,000 in Adelaide. Most people in Adelaide want a new house. Not cheap not crap in a good area. Ours is in 'bad ish' area. We have rented it out now again to move she told me to get the tax depreciation thing.

    I think MOST people could afford a house. Just like we could go on a holiday if I didn't drink coffee out or eat take out during the week. And DH didn't drink a carton a week. These are my examples.... If mums didn't spend hundreds in Kmart on cheap crap every time the new stuff comes out

    It's hard you just have to save.

  15. #180
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    Quote Originally Posted by monnie24 View Post
    I don't understand negative gearing 😜 but we have a old house paid 210,000 in Adelaide. Most people in Adelaide want a new house. Not cheap not crap in a good area. Ours is in 'bad ish' area. We have rented it out now again to move she told me to get the tax depreciation thing.

    I think MOST people could afford a house. Just like we could go on a holiday if I didn't drink coffee out or eat take out during the week. And DH didn't drink a carton a week. These are my examples.... If mums didn't spend hundreds in Kmart on cheap crap every time the new stuff comes out

    It's hard you just have to save.
    This is really unrealistic in Sydney. A lot of money goes on rent. I think it's a bit presumptuous to say everyone is wasting their money on shopping. Aren't you the one with like a million prams

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