Rudd determined to act on housing affordability

And yet we have this report:

HOMEOWNERS in Sydney's outer suburbs have been losing as much as $450 a week every week since early 2004 on the value of their properties as the real story of mortgage belt misery begins to emerge.

With the Reserve Bank likely to announce yet another interest rate hike tomorrow, a Daily Telegraph investigation reveals hundreds of streets in Sydney's outer suburbs now have houses that have been bought and sold at a loss - in rare cases more than 40 per cent in value.

Since the peak of the boom in early 2004, Sydney's southern suburbs has dipped the most in value, with the median price falling $82,750 over the ensuing 15 quarters, according to Australian Property Monitors figures.

Other areas where the Australian dream is souring include Canterbury Bankstown which has registered $65,000 in losses, Sydney's south west $44,500 and Sydney's west $25,000.

I'm getting kinda sick of Governments (both in NZ and Australia) saying how they're going to step in and solve this "crisis".

Firstly because I don't believe there actually is a crisis and, if the above report is true, then the market is addressing this issue itself.

And secondly, because I just don't see a role for government in actively promoting home ownership.

M
 
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the energy of his determination is wasted when I can tell him right now what the problem is... govt taxes and bureaucracy imposed in the majority by his own party colleagues at state level.

same goes for petrol... ooh gee it's so expensive. cut the tax on it? heaven forbid
 
Mark_B said:
I'm getting kinda sick of Governments (both in NZ and Australia) saying how they're going to step in and solve this "crisis".
M
Click to expand...

As always, if there is a way of getting an angle on how to win a vote, the Govt is there.

That's the only reason why they care.
 
austini said:
Hi Gang,

I found the following article interesting. Notice how one of the biggest driver's of housing demand being increasing immigration gets very little mention by the Gov't.

http://business.smh.com.au/an-inconvenient-truth-about-rising-immigration/20080302-1way.html

Cheers - Gordon
Click to expand...

justifiably so, given that we need supply side relief to lower inflation. It worries me how slow immigration is running at, particularly NET immigration. I am not sure how we are ever going to populate up to 100 or 200 million people
 
Wow, Rudd is a miracle worker! First he was going to fix the drought, then food prices, then he was going to slow world petrol prices, all with a nice smile!

Now he is going to fix the housing afford ability problem! for hundreds of years property goes up! and now Rudd is going to reverse the trend!

The problem is the reserve bank, constantly playing with interest rates. first they dropped them down to low, now they are going to overshoot them up!

how can people budget with their mortgage payments changing each month?

If he wants to do something about affordability, cut the rediculas stamp duty, and mandate people have to have bigger deposits. Remove the stupid red tape on property, so people can build new homes.. invest in new infrastructure in regional areas, so people don't just stick to capital cities, and move to quality regional areas.

at least howard was lowering tax's.. labour never lowers taxes to help out people.. oops unless they have to in order to win a election.
 
Ausprop said:
justifiably so, given that we need supply side relief to lower inflation. It worries me how slow immigration is running at, particularly NET immigration. I am not sure how we are ever going to populate up to 100 or 200 million people
Click to expand...

Don't kid yourself;

we DO NOT want 100 million or more people here.

What makes you think that is a good thing?
 
crc_error said:
Wow, Rudd is a miracle worker! First he was going to fix the drought, then food prices, then he was going to slow world petrol prices, all with a nice smile!

Now he is going to fix the housing afford ability problem! for hundreds of years property goes up! and now Rudd is going to reverse the trend!

The problem is the reserve bank, constantly playing with interest rates. first they dropped them down to low, now they are going to overshoot them up!

how can people budget with their mortgage payments changing each month?

If he wants to do something about affordability, cut the rediculas stamp duty, and mandate people have to have bigger deposits. Remove the stupid red tape on property, so people can build new homes.. invest in new infrastructure in regional areas, so people don't just stick to capital cities, and move to quality regional areas.

at least howard was lowering tax's.. labour never lowers taxes to help out people.. oops unless they have to in order to win a election.
Click to expand...

I would agree with you whole-heartedly CC, but you can have all the infrastructure you like in the regional areas, but without the jobs to support people, they won't stay there.

My mother still lives in the country town where I grew up, and the infrastructure there is pretty good, but the town is slowly and steadily dying and all the kids are moving away as soon as they finish school to areas where there are good career prospects.
 
L.AAussie said:
Don't kid yourself;

we DO NOT want 100 million or more people here.

What makes you think that is a good thing?
Click to expand...

No worries......that means the median price for property will be closer to $2mil.

Can't see us coping with immigration rates of more than 200k.....we just won't be able to cope in the major capital cities. Maybe they need to think about growing cities like Newcastle, Wollongong, Geelong, Hobart, Launceston, Townsville, Cairns.

Where will we get the builders from......just not feasible.:D
 
sash said:
No worries......that means the median price for property will be closer to $2mil.

Can't see us coping with immigration rates of more than 200k.....we just won't be able to cope in the major capital cities. Maybe they need to think about growing cities like Newcastle, Wollongong, Geelong, Hobart, Launceston, Townsville, Cairns.

Where will we get the builders from......just not feasible.:D
Click to expand...

We import the builders, to build the houses, to house the builders.

The problem is sustainability. Were do we get the water, fuel, power and so forth.
 
Rudd and Swan will play the compassionate Big Brother angle until the coal fueled power stations are decommissioned.

More important to them to stay onside with the true believers and bleeding hearts then to spend a bit of time talking frankly with the nation about how an economy works.

I agree with Mark, there's nothing they can do about it that doesn't involve raising even more taxes. When will the left ever wake up that no matter how good they feel extorting OPM, then cutting themselves an exorbitant wage out of it, then spending it inefficiently, only makes things worse.

The best thing they can do is force the states to give back the stamp duty they have been thieving since GST was introduced.

Then talk some sense into the enviro-drunk LGAs about how fhb's cannot afford the green levy built into the development and building code agenda.....

Finally, if the FHSA scheme is a sign of things to come, I wouldn't want to have Rudd as my Big Brother, or my God........

Then Rudd might want to review what it means to have signed up to Kyoto, and the economic hardship that will cause.

Well, Australia wanted more left govt, now they've got it.
 
L.AAussie said:
I would agree with you whole-heartedly CC, but you can have all the infrastructure you like in the regional areas, but without the jobs to support people, they won't stay there.

My mother still lives in the country town where I grew up, and the infrastructure there is pretty good, but the town is slowly and steadily dying and all the kids are moving away as soon as they finish school to areas where there are good career prospects.
Click to expand...

agree, so prehaps the government should also implement some tax benefits for setting up shop outside capital cities.. so the job aspect gets addressed as well..

but no point in having better job prospects if you can't afford to live in the location of job!

I say in Melbourne it was good the geelong/melbourne freeway was built, that made transit between regional and capital easier.. plus the high speed train between melbourne/ballarat.. also a good idea.
 
crc_error said:
The problem is the reserve bank, constantly playing with interest rates. first they dropped them down to low, now they are going to overshoot them up!.
Click to expand...

Full RBA independence is the cause of all problems :)
IMHO Rudd should fire those overpaid public servants and take over. :D
I am tired of paying for the bad RBA/Government coordination and the clashes of their economic and fiscal policies.
 
A major part of the afforability crisis is peoples attidude towards consumer debt and the easy availablily of consumer credit. Whilst you have to prove that you can afford a home loan, there's no restrictions on a plasma TV. Additionally owner occupied loans are regulated which puts into place protection for the consumer.

Most people don't realise that their interest free furnature isn't really interest free in the long run - the interest usually ends up being obscenly high.

...

Unfortuantely when governments try to change things to help a certain sector, it usually backfires fairly badly. The FHOG helps first home owners to get into their first home, but it also caused a significant surge in prices, thus blocking many first home owners from affording their own home.

Removing stamp duty is a great idea, I'd love for it to happen. The problem is that it would lower the entry barrier for purchasing property, again causing a surge in prices.

Negative gearing out the door just means rental increases.

I don't disagree with anything already said in particular, but Rudd actually seems to have hit the one thing which might help. By releasing more land, he's increased supply. If this helps to meet the demand, prices may start to stabalise.

Reducing the red tape would also help reduce the cost of building a property. In a compediative market, developers would be able to pass these savings onto the purchasers. This does of course imply that there's enough developers available to meet the demand.
 
sailor, this link to the Victorian State Revenue Office should assist.

"The SRO administers Victoria's taxation legislation and collects a range of taxes, duties and levies. In 2005-06 the SRO collected almost $7.96 billion in revenue for the Victoria Government.

The SRO also adminsters the First Home Owner Grant and the First Home Bonus."
 
Hi

I was going to post a thread on Rudd's housing affordability scheme, when I came across this.

Personally, there are a number of factors that will have to take responsibility for the state that we are in. The RBA, land supply, strong migration, not enough workers or lack of quality people willing to learn a skill and work, governments over the years, private developer, etc...

Even in my home country of Singapore, net migration hit 100K for 2007, reducing excess housing supply of 17.5K dwellings down to 2K, pushing up housing prices by at around 20%. Singaporeans only contributing 40% to the economy, and still there is a problem with building up the 10% depost for housing. Inflation in Singapore has hit 5%, highest in 25 yrs. The government has released lots of hand and is building thousands of apartments this year, but clearly, it is a mid to long term solution.

Another question is: Rudd talks about $6K in tax credits over 10 yrs and $2K in cash or kind. How is that going to benefit the astute RE investor?

Cheers
Daniel Lee
 
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