Housing Affordability Scheme success?

Discussion in 'Property Market Economics' started by boomtown, 13th Sep, 2008.

  1. boomtown

    boomtown Member

    5th May, 2008
    Obviously not all of those will go through but that sounds like an awful lot of supply. I wonder where they are planning on putting them in.

  2. BayView

    BayView Member

    2nd Feb, 2007
    Mornington Peninsula
    The supply will be for the type of renters that we would probably not entertain as potential tenants in our IP's.

    My guess is that it will be a nightmare for the Landlords who sign up for it due to rent defaults and so on.

    A generalisation for sure, but....

    If the $8k was nett, and paid in advance, then maybe. But it wont be; it'll be before tax no doubt.

    Good luck.

    Currently, around 20% of rent is eaten up in holding costs - not including loan interest. Then, deduct another 20% to subsidise the losers (sorry; tenants), that's half the rent gone before loan interest.

    Let's call it ALL the rent gone in costs after you factor in defaults and damage, and a low growth property thrown in.

    We end up with $8k of before tax deductions and many headaches.
  3. craigb

    craigb craigb

    2nd Sep, 2008
    canberra act
    Don' want to be rude but i think its a w--k, the crud gov has reduced house prices already by forcing home owners out of their homes on interest rates, want cheap houses, then just move the rates to 15% the idiots.
    I hope i havn't offend just my thought on this! cranky!!!
  4. LynnH

    LynnH Member

    17th Nov, 2004
    Brisbane (Southern Bayside)
    Agree with Marc. Noel Whittaker said a couple of weeks back in a newspaper column that he couldn't see much value in such a scheme for investors.

    My understanding was that the '$8K' was made up of $6K in tax rebates and $2K of 'in kind' benefits from the state governments (e.g. rate subsidies, stamp duty concessions, etc). So I wonder how many applications from "Corporate Australia" will actually result in construction, once "Corporate Australia" analyses the fine print of the scheme. My guess would be 'not many'!

  5. myla

    myla Member

    23rd Jun, 2006

    a bit of propaganda i would say from Tanya,

    most likely a spin after the report yesterday indicating not many interested in setting up first home savings accounts,

    spot on lynneh

  6. grossreal

    grossreal Member

    14th Aug, 2005
    sydney nsw
    hi all
    you can down load the information onthe project from the gov website
    the application for this scheme closed 2 weeks ago and yes it is at this stage 6k in tax relief and 2k in kind.
    and as for who is in it will I have my finger in.
    and until it comes out and we get real numbers its a bit of a lottery.
    remembering two things here
    1. its not thru as yet and won't be until oct
    and 2
    they have not said where the properties or allocation will be.
    so its a case of put in anf hope at this satge and no commitment from either side.
    so until a
    we know where
    b who is the renters
    c numbers
    d what the tax back is
    ewho the lenders are
    its abit o0f a spinning coin at this stage and alot of hot air
    but I am in it as they say
    you can't win if you don't take the field.
    but that does not mean we are going to kick off if we don't like the field or the ref we will be taking our ball and walking off.
    hope this helps but I think it won't.
    the min number of units must by 20 and above to qualify
    Last edited: 14th Sep, 2008
  7. fernfurn

    fernfurn Member

    6th Apr, 2006
    By a Bellarine beach
    With this type of tenant, wouldnt centrelink be paying the rent anyhow. Could be guaranteed if you can actually rent to the Dept then they put a tenant in, pay the rent and restitute any damage
  8. grossreal

    grossreal Member

    14th Aug, 2005
    sydney nsw
    hi celica
    no this scheme will be managed by fahcsia and they are asking for different people to be put on their lists.
    and the developing company with have a lease /agreement to rent at an amount with fahcsia.
    and that developing company/owner can't be changed for the 10 years that the agreement is in place unless they sell to someone int he scheme or someone that applys to the shceme and is approved
    and if that person/company wants to be part at the shceme at any time the same procedure as is current wil be required to be done.
    so it not as simple as renting at 20% below market and away you go.
    alot of these scheme sound simple to start( as it easy to say we are going to do this)but in the setup and running of these scheme thats were all the problem areas start to show up
    and with this scheme there are alot that I see but at the end of the day if there is money to be made you have to be in it to win it.
    it is very early days at this stage.
    and not sure if it will work if at the end of the day there is not margin then it is not going anywhere form me.
  9. grossreal

    grossreal Member

    14th Aug, 2005
    sydney nsw
    hi all
    another great well thoughtout scheme.
    to date no progress on it comming out and another hump in the road of progress.
    will it happen
    have not got a clue but there is alot of hurdles in the way at this stage.
    and another was put up yesterday
    in the form of charities
    is a charity is involved in this scheme they could lose the charity status as they are producing an income and as such can't be involved.
    now that sounds silly to me as the uniting church is a very large lender in the finance industry so you work out where the logic is in that one.
    but they will work it out.
    its been put back three times so far and the latest was yesterday with the computer generated answer that its still to be given the thumbs up
    now I have not got any clue
    how or why someone in an office in canberra would think that a person would leave a unit or house vacant ( and it has to not been lived in) for 4 months (and thats how long its been since this started) in a market that is over heated ( and thats the reason they started this scheme in the first place)
    and the places that they are filling are still there.
    and heres the funny thing if they are not they have redo it all over again.
    well it will work its self out it always does
    just an update
  10. Witzl

    Witzl Bought, held, upgrading

    4th Feb, 2008
    Sydney, NSW
    its funny how quickly we forget krudd's empty schemes and policies.
  11. accumulator

    accumulator Member

    13th Apr, 2007
    Sandhurst, Vic
    I am not a krudd fan, however, I think your all a little glass if half empty.

    8k tax free for a 20% rent reduction is a big incentive on lower end properties........

    Looks like a lot of the managers are including damage insurance and default insurance in their fees also.

    IMho it's worth more research....
  12. paramount

    paramount Member

    12th Aug, 2009
    Outstanding Investment Opportunity in Tassie

    I agree with you accumulator

    I think NRAS is generally misundertsood and due to the Govts rush to get it to the market it has not been marketed well.

    In Tas you can buy a $250,000 home with market rent is $250 per week @80%= $200 pw plus NRAS $167 = $367 pw which is guaranteed for 10years. Thats a starting gross yield of 7.6% (the NRAS is indexed to increase)

    I particulary like the following

    Low entry level -makes my equity go further
    Brand new - reduces maintenance
    very high quality build, -increases their appeal to be tenanted
    surrounded by other new homes in good locations- assits in providing capital growth