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  1. #1
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    Default Housing / negative gearing / politicians

    So I was reading about what Turnbull had said to a reporter about helping his kids buy a house and fil was here defending him. And defending NG. All just supply and demand to him. NG needed to keep investors interested in property etc. And then I read this morning how scott Morrison says Grattan institute's prediction that labors plan for NG could slow housing growth by 2% and that could crash the economy!!
    My reaction is wtf?!?!
    We own our house (with the bank), I don't want house prices to dive so low that it crashes the economy but it feels so obvious that NG is distorting the housing market and making it nearly impossible for people to buy. My parents and in laws have such a different view to me. They see rising house prices as great. They really don't see any downsides as they own and their children own. But what benefit is it to house owners not planning to sell and downsize? It just benefits investors, no?? We are more stuck now that the apparent value of our house has increased as so have the other houses and stamp duty would to too high. It just seems so unfair that young couples / families are being forced to live further out from the city or even change States. And of course if things don't change my own kids will never be able to buy. Either rent or live with us forever!!
    I guess I'm curious as to what other bubhubbers think?

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    It has been proven neg gearing as well as the First Home Buyers has blown housing prices out of the water. We have investors able to afford more than first home buyers which pushes them out of the market. Then not only does the investor get the property, that family now experiences insane rental prices bc demand is so high bc no one can afford that first house.

    It's frustrating that people even 5 years ago got into the market, and now have the equity to keep buying while families like us can't even get a look in. I'm pretty sure aust is the only country in the world to do NG for this very reason.

    Of course those that already own support it. If they have investment properties they get to reduce their taxable income. If they are like your family that bought forever ago for pittance they want to keep NG so if they/their kids want to sell they can make a fortune.

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    Default Housing / negative gearing / politicians

    I believe that house prices are so high ATM because interest rates are so low.

    Rates are about half what they were 8 years ago and people are able to borrow double the amount.
    Last edited by babyno1onboard; 09-05-2016 at 17:56.

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  5. #4
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    House prices are crazy in melbourne and sydney atm...but over in parts of perth its a different story. Raising interests rates may seem like an easy fix but obviously its more complicated than that. Will be interesting to see how it all unfolds over the next few years. Im sure there are many ppl out there with ridiculous mortgages who are praying interests rates dont rise dramatically like they did back in the late 80s/early 90s. I think there will be a correction in melbourne.

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    Default Housing / negative gearing / politicians

    Quote Originally Posted by Tinkers View Post
    House prices are crazy in melbourne and sydney atm...but over in parts of perth its a different story. Raising interests rates may seem like an easy fix but obviously its more complicated than that. Will be interesting to see how it all unfolds over the next few years. Im sure there are many ppl out there with ridiculous mortgages who are praying interests rates dont rise dramatically like they did back in the late 80s/early 90s. I think there will be a correction in melbourne.
    I didn't mean that rising interest would fix the problem, but I believe house prices are what they are because of interest rates. Interest rates have impacts on many more aspects of the economy and can't be messed around with just to fix one problem as it would create another.

    But for example when I brought my first house 8 years ago I was able to borrow ~$300,000 with interest rates at 8.5%. If the interest rates were 4.35% at the time (what my mortgage is at now) the bank would have lent me ~$600,000. Big difference in buying power.

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    I think it's the opposite. Interest rates are low bc prices are so high. The economy is very sluggish and they are trying to level out the effect of the ridiculous housing prices.

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    I think raising interest rates would be a last resort. Alot of uncertainty with the economy, I guess they are treading carefully.

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    If interest rates where 9% house prices would drop. There are lots of factors to high house prices. Negative gearing is one of many. Not enough housing, people buying beyond their means. I'm not someone who believes it's all negative gearings fault and everything would be fine if we got rid of it but I don't deny it has some impact on prices.
    Also people's expectation on buying property is very different than it was years ago. Another issue is that it's takes sacrific to buy a home which is beyond some people. And of course Sydney and Melbourne are just 2 places in Australia. You can pick up a decent house in Tasmania for $250k.

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    I can understand people NG one or two properties. Land/property is a generally safe way to save for retirement. I don't understand the need to NG multiple properties.

    We put our own house to rent in Brisbane as we were posted to Canberra. We have enough equity in that house (1/3 paid off) to buy in Canberra but are awaiting the election and result before we do so.

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    Default Housing / negative gearing / politicians

    The housing market will never crash the economy, especially now with interest rates so low and demand so high , the only thing that will slow the housing market is if we stopped immigration, increased the interest rates to a much higher level and the banks stopped lending money - these things are not going to happen anytime soon (even during the GFC our housing prices remained steady )

    The reasons it's inflated is because of low interest rates and demand , our population is increasing but houses in most suburbs are not - thus creating a huge demand - the government can't stop it so it needs to focus on better transport , releasing new land and employment opportunities to the outer suburbs so first home buyers and young families can find affordable housing or like a lot of my buyers do who need /want to stay in the area buy units or smaller properties they can afford now

    I can only speak for my area in southern Sydney and I've been selling real estate for now 25 years ( I started in 1990 when interest rates were 16%!) but investors account for approx 7% of our market , we don't have the mega rich investors buying up our houses, we have families buying to them live in and most of the investors who do by here are mum and dad investors trying to set themselves up for retirement or retirees investing some of their super and that's mainly apartments as the rent return of houses in Sydney just doesn't make it affordable for most investors , even with the negative gearing tax breaks

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