LLs can only charge what they want in a market where demand for rental properties exceeds supply- and by extension, the more property investors (and hence rental properties) there are, the lower rental prices will be.
The solution to increasing first home ownership lies in tweaking the supply side of the equation, not the demand side.
Now, excuse me (a self-admitted property owner) while I twirl my long moustache, laugh cruelly and tie a helpless maiden to the train tracks...
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29-07-2014 15:35 #31Senior Member
- Join Date
- Mar 2012
Last edited by Gentoo; 29-07-2014 at 15:43.
29-07-2014 15:41 #32
And it has been documented in finance journals that the reasons for the huge demand in rent, is no one can afford to buy bc investors have pushed prices up. Someone had a threads here months ago with a story about it.
Giving investors more loans to rent out isn't the answer. The answer is the opposite. Give average families the opportunity to buy which will bring down rental prices for those that will always rent bc demand is lower. More people own. The problem is that house prices are so sky high it's reached the point of no return. Even if it remains static it's still too high for many.
Last edited by delirium; 29-07-2014 at 15:50.
29-07-2014 16:11 #33
However, the issue still is that once you are over say the age of 35, it may not be an option for you. The average mortgage is 25-30 years. Retirement age as it currently stands is 65 years. If you put your super into a mortgage deposit at 36 years old, then theoretically you will still be paying it off at 66 years old, once you have already 'retired'. The banks will want guarantees that mortgage will be repaid before you retire, otherwise they won't do it. Do you see the problem I am getting at? Therefore, it also has it's own limits. A good idea though.
29-07-2014 16:24 #34
I agree that supply needs to increase but we also need to fix the system to stop tulip-style property speculation.
Get rid of CGT concessions, cap negative gearing or only allow it on new builds and then house prices ... and rents ... will drop.
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