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  1. #141
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    I see your point about overextending your borrowing and using refinancing as a way to service your loan, and how this can be compared to a Ponzi scheme in a sense (still a far cry from what a Ponzi scheme actually is, but we will have to agree to disagree on this, and I think going on and on about it is really losing track of the focus of this topic) but most people don't do this.

    Real estate is not like other assets. It's a very unique asset class and can't be compared to depreciating assets because (1) land doesn't have a useful life and (2) land can't be reproduced.

    If you have time, have a read of the document I posted above that was published by RBA about the history of housing price growth in Australia. It explains what drives prices and demand.

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  3. #142
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    Quote Originally Posted by witherwings View Post
    I see your point about overextending your borrowing and using refinancing as a way to service your loan, and how this can be compared to a Ponzi scheme in a sense (still a far cry from what a Ponzi scheme actually is, but we will have to agree to disagree on this, and I think going on and on about it is really losing track of the focus of this topic) but most people don't do this.

    Real estate is not like other assets. It's a very unique asset class and can't be compared to depreciating assets because (1) land doesn't have a useful life and (2) land can't be reproduced.

    If you have time, have a read of the document I posted above that was published by RBA about the history of housing price growth in Australia. It explains what drives prices and demand.
    Agree with you completely.

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  5. #143
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    Quote Originally Posted by Rose&Aurelia&Hannah View Post
    Comparing a house purchase to a car is very odd. Cars deappreciate in value very quickly. Houses/land appreciate value slowly, as in generationally.

    Most people are supportive of NG for 1-3 properties. Not for multiples. This is because most house investors are mum/dad or people preparing for retirement. They aren't quick income earners but rather slow and steady assets.

    Yes- if you purchase a property with minimal deposit and if the market tanks then you are stuffed. But if you are sensible and plan ahead for the ups& downs then property is a good long term investment. This is not in any way a ponzi scheme.

    If people choose to over extend themselves or risk 'flipping' houses then that is risky. You can win or lose large amounts very quickly.

    I honestly don't see how long term property investment is anything like a ponzi scheme.
    Personally, I would support negative gearing on new builds as that makes sense as it really is helping to build up supply. As it is, investors have an advantage over potential buyers. Why can't mortgage payments for owner occupiers be offset against personal incomes? Or make every house only open to sale to first home buyers for the first month? Of course that would not work now as who would decide a fair price? I guess I just feel the government should be doing more to help people who want to own their home rather than washing their hands and blaming demand / free market etc when NG encourages investment for capital gain.

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    Correct me if I'm wrong but isn't the point of a capitalist society to have less govt interference? I understand more socialist/communist societies are regulated more by the govt.

    How do investors have an advantage over potential buyers? Or did you mean owner occupiers?

    Tbh I don't like it when the govt interferes with anything.


    ETA- you'd support NG on new builds? How about for those owner occupier that then rent their property out 2-20yrs later? From memory FHO were exempt from SD if they lived in their property for a year. Failure to do so and you had to pay the money. So the govt is/was helping FHO to buy a house. Actually it was the govt 'helping' with that idiotic FHOG that lead house prices to sky rocket. One could argue that govt helping actually made it worse.
    Last edited by Rose&Aurelia&Hannah; 12-05-2016 at 21:53.

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  8. #145
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    and to be totally honest - negative gearing on new homes is much more prevalent.

    One of the major factors in negative gearing is the depreciation allowed - which tends to be substantially more on new properties. So cutting out negative gearing discounts for existing properties but leaving them for new properties wont actually make a huge gain for the government.

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  10. #146
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    Default Housing / negative gearing / politicians

    Quote Originally Posted by Freyamum View Post
    Personally, I would support negative gearing on new builds as that makes sense as it really is helping to build up supply. As it is, investors have an advantage over potential buyers. Why can't mortgage payments for owner occupiers be offset against personal incomes? Or make every house only open to sale to first home buyers for the first month? Of course that would not work now as who would decide a fair price? I guess I just feel the government should be doing more to help people who want to own their home rather than washing their hands and blaming demand / free market etc when NG encourages investment for capital gain.
    Making interest on mortgages for owner occupiers tax deductible will benefit high income earners more than lower income earners. I think it will just make the rich richer and the poor poorer as the saying goes.

    Making properties only available to owner occupiers for the first month will just mean that sellers won't accept any offers until that month has passed.
    Last edited by babyno1onboard; 12-05-2016 at 22:14.

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  12. #147
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    Default Housing / negative gearing / politicians

    Just saw this in my news feed:

    http://www.domain.com.au/news/it-mig...-all-autopromo


    It’s Sydney’s biggest house price drop, but in the grand scheme of things it doesn’t mean much

    "“This is the sharpest correction that I’ve got on record,” Domain Group’s chief economist Dr Andrew Wilson says.

    “And there’s every likelihood that we’ll get another drop in June given that auction clearance rates are moderating, banks are tightening their lending rules and buyers and sellers are going to be distracted by an election.”

    Yet would-be first home buyers overjoyed that the psychological barrier of the $1 million median house price is no more can hold off on popping the champagne.

    The boom’s over, but no crash is imminent. As Dr Wilson points out, the most recent drop is less than the one in December. So there could be an even smaller fall in June. It’s not as if there’s been any major trigger to substantiate a more significant correction, like a large rise in interest rates or a jump in unemployment.

    The market’s now simply finding its new level now after the heat of most of last year.

    When Sydney reclaims its million-dollar median house price is another question. If Labor were to sneak in with its promise to end negative gearing, investors might jump back into the market to try to beat the deadline of July 1 next year, pushing up prices again. Or there could be a spring revival prompting a million-dollar median again by the end of the year.

    One thing’s clear. In the grand scheme of things – when you look at the data over the past 20 years – this little dip doesn’t mean much. The median house price has almost doubled in a decade – it was $527,430 in March 2006. And 20 years ago it was a mere $217,686. How unreal does that sound in today’s world – yet at the time it may as well have been a million dollars."
    Last edited by witherwings; 13-05-2016 at 07:00.

  13. #148
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    Quote Originally Posted by witherwings View Post
    Just saw this in my news feed:

    http://www.domain.com.au/news/it-mig...-all-autopromo


    It’s Sydney’s biggest house price drop, but in the grand scheme of things it doesn’t mean much

    "“This is the sharpest correction that I’ve got on record,” Domain Group’s chief economist Dr Andrew Wilson says.

    “And there’s every likelihood that we’ll get another drop in June given that auction clearance rates are moderating, banks are tightening their lending rules and buyers and sellers are going to be distracted by an election.”

    Yet would-be first home buyers overjoyed that the psychological barrier of the $1 million median house price is no more can hold off on popping the champagne.

    The boom’s over, but no crash is imminent. As Dr Wilson points out, the most recent drop is less than the one in December. So there could be an even smaller fall in June. It’s not as if there’s been any major trigger to substantiate a more significant correction, like a large rise in interest rates or a jump in unemployment.

    The market’s now simply finding its new level now after the heat of most of last year.

    When Sydney reclaims its million-dollar median house price is another question. If Labor were to sneak in with its promise to end negative gearing, investors might jump back into the market to try to beat the deadline of July 1 next year, pushing up prices again. Or there could be a spring revival prompting a million-dollar median again by the end of the year.

    One thing’s clear. In the grand scheme of things – when you look at the data over the past 20 years – this little dip doesn’t mean much. The median house price has almost doubled in a decade – it was $527,430 in March 2006. And 20 years ago it was a mere $217,686. How unreal does that sound in today’s world – yet at the time it may as well have been a million dollars."
    Ahhhh the election. My house goes for auction a couple of weeks beforehand. Darn it. I hope that won't scare of buyers

  14. #149
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    Default Housing / negative gearing / politicians

    I've already figured out a loophole around negative gearing not being allowed anymore if labor wins.. And assuming they have the balance of power in the senate, since it's a double dissolution election. The legislation might not even get passed. If it does there are ways around it - unfortunately only for the rich folk. Sorry to everyone else who is in the majority.
    Last edited by witherwings; 13-05-2016 at 07:41.

  15. #150
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    Default Housing / negative gearing / politicians

    Quote Originally Posted by babyno1onboard View Post
    Ahhhh the election. My house goes for auction a couple of weeks beforehand. Darn it. I hope that won't scare of buyers
    Can you delay the marketing campaign and auction?

    ETA - or bring it forward..


 

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