Statistically though, households in regional areas earn less than Sydney/capital cities. So the family living in Mildura may pay a lot less to buy/rent, but their factory wages are also a lot less. Obviously I don't have exact figures but I think you'd find when you look at wage:housing ratio it's probably reasonably close. I read people here who live in capital cities saying how they aren't high income and are normal for the city and are earning 150k. Families in rural areas are often earning half that.
In addition my community is a perfect example of how neg gearing has completely ruined it for many first time home buyers. We are factory workers, farmers, truck drivers, very blue collar. A small proportion of the community has wealth and many have 6 or 7 investment properties. This has driven up prices so many ended up renting. Rental demands are huge now, so rentals prices are completely ridiculous for a small town and now investors are actually in positive gearing bc the rent vs buy price is high. The low to middle income people now can afford mortgage repayments but rent is so high in relation to wages many can't save the deposit. It's actually cheaper to pay off a mortgage here! Return on rentals is over 7%.
I think negative gearing should be changed dramatically but I honestly think if anyone thinks that will cause housing prices to drop they're kidding themselves.
And then when it doesn't the critics will say "see it didn't make a difference" and want to bring it back in.
I know negative gearing is not the sole reason for crazy prices, it's much more complex than that. But I do think an overhaul is needed. I don't even think it's should be totally taken away. 1 investment property and that's it is my stance when I become Prime Minister
Last edited by Little Miss Sunshine; 03-03-2016 at 11:29.
Little Miss Sunshine (03-03-2016)
"Mr Hawtrey said the mistake was "an unfortunate typo" that should have read $1.9 trillion but it had no impact on the overall findings. He also stood by the report."
The article says the report was also done before labour released their plans, but it doesn't say whether the premise of it was scrapping it for established homes and reducing the CGT discount to 25%, but I'm assuming those two things were factored in as the only error Labour are pointing out is a typo.
Last edited by A-Squared; 03-03-2016 at 12:55.
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