Do we agree that popln growth will continue ?
Sure.. but thats another issue that affects both scenarios
I've mentioned 2 supply issues..
1) Investors have been supplying the market for rentals of existing houses for decades. Removal (or limiting) of NG would reduce the supply of rentals of existing housing.
No.. because they invest in existing housing and the housing still exists
2) Investors are less likely to invest in new supply even if it offers -ve gearing benefits.
If NG remains for new housing it could only increase investment in this area, not decrease it
Are you saying those supply issues won't exist ?
No
Or are you saying that even though there will be supply falls and demand (popln growth) increases, prices will remain in equilibrium ?
No, supply doesnt fall. If it does because a former renter bought the property then demand has fallen also
Or are you suggesting that we don't actually need a supply of rental properties ? and that everyone should be an OO ?
No
And are you happy to condemn renters (temporary workers, recent immigrants, migratory workers, broken families, recently left home young adults, those saving for a PPOR, and many other vulnerable groups) to either the outer ring or new stock or high rise apartments ?
No.. A lot of renters including from these groups would be able to afford a home quicker when they dont have to compete with speculators.
Adding the population growth factor into the argument is a furphy, its a seperate issue which applies upward pressure to both house prices and rents.
You appear to be referring to supply of housing & not supply of
rental housing.
So just to repeat the issues....
1) Investors have been supplying the market for rentals of existing houses for decades. Removal (or limiting) of NG would reduce the
supply of rentals of existing housing.
You said NO - to me that makes no sense. If investors are disincentivised from investing in existing stock, then surely a proportion will stop investing there & OOs will prevail. In the long term the net result can only be a lower supply of rentals of existing stock.
I
think your point is that the
current generation of FHBs will buy that stock therefore no new supply is required. I wouldn't disagree with you.
However, I would counter that by saying that that is short term thinking - the
next generation of FHBs would suffer higher rents due to a) lower supply of rental stock of existing housing, b) lack of -ve gearing meaning a higher yield is required by investors.
2) Investors are less likely to invest in new supply even if it offers -ve gearing benefits.
hobo & I (& many other investors) agree that investors prefer better located housing, and would be less likely to buy new stock.. so you may be in a minority if you think they will. There are 1000's of threads re-iterating that viewpoint.
My next point was .....
And are you happy to condemn renters (temporary workers, recent immigrants, migratory workers, broken families, recently left home young adults, those saving for a PPOR, and many other vulnerable groups) to either the outer ring or new stock or high rise apartments ?
You said No.. A lot of renters including from these groups would be able to afford a home quicker when they dont have to compete with speculators.
I agree that the current generation may well be able to afford a home faster, but they would be the ones who condemned future generations to higher rents and less choice of housing (especially of existing stock).
That's why I consider the advocates of the removal of NG as either short term thinkers, or selfishly attempting to gain financial benefit for themselves at the expense of our children.
P.S. Like you my IPs are no longer -ve geared.