What ever happened to inspired conversation ...
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Nullagine,
How is investing in property trampling over people?? Please explain further. Personally I fail to see the connection.
Regards Jason.
In the USA, they got sub-prime mortgages, in the UK they rent, the rest of the world, well, I guess they stay where they are because they are smart enough not to have housing bubbles!
What past have you been reading?
Are you aware of the first house Jan Somers bought? Raised that as it seems fairly topical based on where we are posting!
YM that is exactly how people have been starting, going back to federation. I have done plenty of reading on this subject and am not shooting from the hip or what I can cut n paste from the net.
I think the argument is that investors have tax advantages over owner occupiers and are using that to add a massive speculative premium to the housing prices pushing everyone's cost of living up (if they buy) without in most cases adding anything to society except a transfer of title.
While I support removal of negative gearing on existing properties & bringing capital gains tax back in line with income tax but if you want to be a property investor that's fine with me.
I just wish the whole of the country had jumped in at the same time thinking it's a fool-proof ticket to riches because borrowing from overseas to bid up existing residential real estate prices is a pretty dumb thing to do for a country as a whole, and it'll probably lead to a recession, job losses and negative equity to people who just wanted a home.
If the speculators get burnt, they should just take it on the chin (don't you dare ask for a bailout!) as that's capitalism, but the people who bought because mainstream culture tells them to and get hurt, well, those people I feel sorry for (but no bailout either)
You are welcome to your opinion, but you dont have to go on and on and on and on.............................................................................................................................................and on and on and on and on and..........................................................................................................................................................................................................................................on and on and on and on about it.
Become a Poli, change the rules, publish a Little Red Book, preach to the world on a soapbox outside a bank............................(see people avoid HG like the plague)
I doub't you'll get too many votes with that (in your new position as a Poli), and I doubt there'll be many nice new rentals for you to live in.
Hope you like poorly maintained rubbish as it is the land that hold's the value, not the house
If thats your opinion, It's just as well the whole country did'nt then.
See first reply
I think all of us on here would accept responsibility if things went belly up.
You see, most here have never had the luxury of having Mummy and Daddy to bail us out, so would not expect a bailout from anyone.
Yet you seem to expect something for nothing by having massively falling house prices so as you will feel comfortable about buying.
A little secret HG, most probably never felt comfortable buying until they got a couple under their belt. I still don't feel that comfortable, untill I see the numbers working.
Dave
Every now and then Andrew you have this terrible habit of playing the man, not the ball ... for such a smart guy it doesn't look good on you.
Anyway - look at median income and median house statistics. There is clear and unsustainable mismatch that is becoming worse. People do move up in housing quality throughout their life but this should be due to savings (paying off the principle) and incomes rising over time .... not due to somebody else buying their first home at an even higher price. If that was the source of funding for moving up then you have a clear pyramid scheme.
Everybody misses the point. See my response to Andrew - it is about using a rising first home value as funding for your next house - that is the bit that doesn't work long term. The mismatch between incomes and house prices can not be solved by a rising first home value.
Regarding your advice I am probably the wrong target. I actually make a lot of money and have a large deposit so could buy whenever I thought it a good time to do so. I just consider now a very bad time.
YYYYYYYYYYYYAAAAAAAAAAAAAWWWWWWWWWWWWNNNNNNNN!
In case you have all forgotten; this topic was about inspired conversation.
This actually is very uninspiring, boring and now very annoying.
Yes, I can change channels I suppose...
Yield; change the record for GOD'S sake.
Oh yeah; and if we do away with all the tax benefits (which the govt introduced to create incentive for investors to do it so the govt doesn't have to because they don't want to), where will YOU live after the rents skyrocket due to the massive shortage of rental properties which all the investors sold off because there is no incentive to do it anymore??
In case you have all forgotten; this topic was about inspired conversation.
This actually is very uninspiring, boring and now very annoying.
Yes, I can change channels I suppose...
Yield; change the record for GOD'S sake.
Oh yeah; and if we do away with all the tax benefits (which the govt introduced to create incentive for investors to do it so the govt doesn't have to because they don't want to), where will YOU live after the rents skyrocket due to the massive shortage of rental properties which all the investors sold off because there is no incentive to do it anymore??
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The city expands and new areas get developed. Many suburbs did not exist 10 or 20 years ago (much of the Hills district in Sydney, say). Houses get redeveloped into units, increasing density. Outer suburbs become middle-ring suburbs, and new outer suburbs are created from farmland, industrial land, etc. In actual fact the less wealthy people (often young people out of uni or leaving parental homes) are 'created' when they set up their own homes. A city is a living organism, it doesn't stay at the same size when population increases.
It's been happening for centuries. I remember seeing an exhibit at the Museum of New York about the history of Manhattan. The progressive 'spread' of people is amazing.
Alex
I'd simply buy! Should be some bargains if investors are cashing out in a big way.
Regarding the 'channel' this line of discussion is pretty much confined to 2 threads at the moment so yeah I'd just check out another thread. People are into it though it seems.
HG,
There are major flaws in your argument:
Please explain this:
1) PPOR is totally excempt from capital gains tax
2) PPOR is not counted as an asset for the assets test meaning that it is possible to own a million $ PPOR and still get the old aged pension and the other benefits that come along with it.
Research indicates that OO's push up the price of houses, not investors. (Fairly basic knowledge by the way).
Do you also support the removal of the social security network, and a clamp down on people who wrought the system?
How do you explain the recent initiative by the government to cut taxes signifanctly on superannuation? So why target property investors?
Do you realize what impact the removal of negative gearing would have on the rental market? Rents would sky rocket - some members of society would have no where to live. Even in the unlikely event that prices fell, there would be people who could still not afford to buy.
How would it have been possible for the whole country to think this way??
To state that this in itself will lead to a recession is inflamatory. Housing is only one part of our economy. If people loose their jobs because companies begin failing, then this will lead to a recession and a fall/stagnation of property prices.
Property investors are actually responsible for creating a lot of work, and this helps to stimulate economic activity. (Read Kristine's excellent post).
I'll take a punt by speaking for the majority here - we are not investing in schemes such as the one offered by Westpoint and the like. The beauty of having a direct residential (or commercial) property investment is that we have the option to do many things to improve our situation: Renovate to improve the yield, sell it if we need to reduce our exposure, develop where possible, and so on.
HG, what about reading the posts of the really successful investors here. It doesn't take long to find them. They have really been highly successful (and continue to be so) and offer their experience and ideas freely. From reading your posts it sounds as though you don't so much have a problem with investing in property, but investing in general to improve your wealth. That is an issue only you can overcome if you choose to.
Regards Jason.
There are major flaws in your argument:
Please explain this:
1) PPOR is totally excempt from capital gains tax
2) PPOR is not counted as an asset for the assets test meaning that it is possible to own a million $ PPOR and still get the old aged pension and the other benefits that come along with it.
Research indicates that OO's push up the price of houses, not investors. (Fairly basic knowledge by the way).
Do you also support the removal of the social security network, and a clamp down on people who wrought the system?
How do you explain the recent initiative by the government to cut taxes signifanctly on superannuation? So why target property investors?
Do you realize what impact the removal of negative gearing would have on the rental market? Rents would sky rocket - some members of society would have no where to live. Even in the unlikely event that prices fell, there would be people who could still not afford to buy.
How would it have been possible for the whole country to think this way??
To state that this in itself will lead to a recession is inflamatory. Housing is only one part of our economy. If people loose their jobs because companies begin failing, then this will lead to a recession and a fall/stagnation of property prices.
Property investors are actually responsible for creating a lot of work, and this helps to stimulate economic activity. (Read Kristine's excellent post).
I'll take a punt by speaking for the majority here - we are not investing in schemes such as the one offered by Westpoint and the like. The beauty of having a direct residential (or commercial) property investment is that we have the option to do many things to improve our situation: Renovate to improve the yield, sell it if we need to reduce our exposure, develop where possible, and so on.
HG, what about reading the posts of the really successful investors here. It doesn't take long to find them. They have really been highly successful (and continue to be so) and offer their experience and ideas freely. From reading your posts it sounds as though you don't so much have a problem with investing in property, but investing in general to improve your wealth. That is an issue only you can overcome if you choose to.
Regards Jason.
I agree.
Nulla & HG. For what it is worth this is a PROPERTY INVESTING FORUM, not a I HATE PROPERTY & ALL INVESTORS forum. If you think you can change the minds of die hard investors, then YOU HAVE GOT IT WRONG. If you don't like it here, then do everyone a favour (including yourselves) & GO AWAY.
I was just starting to like Yield, as he seemed to make some statements, then when proved that his statements were incorrect, admitted that maybe he had a little to learn. If you are here to learn, fine, but please saying the same thing time & time again is BORING.
the d&g-ers on this thread are becoming amazingly out of touch.
to say that people have never lived in dumps in the suburbs - well - what planet have you lived on? merely 10 years ago i lived in a very run down deceased estate where the carpet was so putrid i ripped it up the first night, most rooms didn't have a power point and the kitchen was built around 1940 - i renovated it. go back to the late 60's my parents bought a run down old dump out in the bush that only had two bus services a day - and renovated it. post war, i personally know many immigrants who lived in tin shacks out in the bush who went on to become successful business people. 150 years ago many people lived in humpys (bark huts) in the bush as they forged to build themselves a farm.
to say people haven't lived in poor conditions, and subsequently been able to get ahead, is abosolutely ridiculous.
to say that people have to be trodden on and destroyed for me to invest is again a silly statement - we merely take advantage of opportunities that others, who are to lazy or can't be bothered, don't take up - some of my purchases were on the market for months before i've put in offers. available for all, but they didn't take the opporunitiy.
hg and ym - you both are using your personal examples as examples of the entire renting population. this doesn't work and you need to rethink. how many people that are currently renting will have the deposit to buy a house if the tax incentives are removed and rents go up to real values? probably less than 5%. so the other 95% of renters will be forced to either pay increased rents or live on the streets - not good political sense really.
also, as pointed out time and again, it is oo's that are driving up prices. investors don't want to pay more to buy - we'd rather they stayed low - but oo's are prepared to do so because they become emotionally involved in the purchase. if you are going to "blame" then direct it where it is relevant.
as pointed out time and again in this thread, your arguements are full of holes. hg, i do thank you for posts in the past where you have made me stop and think and made some minor adjustments to my investing path - but for both of you to imply that by improving my "lot in life" and not being reliant on others to feed, clothe, house, mend me and able to give much more back to the community than if i wasn't investing makes me selfish, then you are totally on the wrong track. i can give so much more to society, in a more productive manner, by being free because of my investments.
and, incase you're thinking i'm being a capitalist bugger, one of my properties has a lovely old guy living in it - i could easily toss him out, merely paint and hang new curtains, and relet the place for $40/wk more ... but i don't. you will find very few of us a cold hearted, and that we do care for society as a whole - just there is no point in being a martyr as that helps no one.
to say that people have never lived in dumps in the suburbs - well - what planet have you lived on? merely 10 years ago i lived in a very run down deceased estate where the carpet was so putrid i ripped it up the first night, most rooms didn't have a power point and the kitchen was built around 1940 - i renovated it. go back to the late 60's my parents bought a run down old dump out in the bush that only had two bus services a day - and renovated it. post war, i personally know many immigrants who lived in tin shacks out in the bush who went on to become successful business people. 150 years ago many people lived in humpys (bark huts) in the bush as they forged to build themselves a farm.
to say people haven't lived in poor conditions, and subsequently been able to get ahead, is abosolutely ridiculous.
to say that people have to be trodden on and destroyed for me to invest is again a silly statement - we merely take advantage of opportunities that others, who are to lazy or can't be bothered, don't take up - some of my purchases were on the market for months before i've put in offers. available for all, but they didn't take the opporunitiy.
hg and ym - you both are using your personal examples as examples of the entire renting population. this doesn't work and you need to rethink. how many people that are currently renting will have the deposit to buy a house if the tax incentives are removed and rents go up to real values? probably less than 5%. so the other 95% of renters will be forced to either pay increased rents or live on the streets - not good political sense really.
also, as pointed out time and again, it is oo's that are driving up prices. investors don't want to pay more to buy - we'd rather they stayed low - but oo's are prepared to do so because they become emotionally involved in the purchase. if you are going to "blame" then direct it where it is relevant.
as pointed out time and again in this thread, your arguements are full of holes. hg, i do thank you for posts in the past where you have made me stop and think and made some minor adjustments to my investing path - but for both of you to imply that by improving my "lot in life" and not being reliant on others to feed, clothe, house, mend me and able to give much more back to the community than if i wasn't investing makes me selfish, then you are totally on the wrong track. i can give so much more to society, in a more productive manner, by being free because of my investments.
and, incase you're thinking i'm being a capitalist bugger, one of my properties has a lovely old guy living in it - i could easily toss him out, merely paint and hang new curtains, and relet the place for $40/wk more ... but i don't. you will find very few of us a cold hearted, and that we do care for society as a whole - just there is no point in being a martyr as that helps no one.
I understand comrade you are just trying to make these blind capatilists pigs see the light. But do I also detect an element of sour grapes perhaps ? You sound like the goose on meet the press yesterday from Australians for Affordable housing.
I must say why do you bother posting in this forum ? You do u realize this is a property inestment forum ?
Perhaps you would be more at home in GHPC forum? Oh yeah thats right you are already
Cheers & since this is a property investment forum happy investing
OOs have a tax advantage at selling time, but investors have the advantage during the buying/paying off the mortgage bit.
Please show me the research.
We've been over this before, I posted a link (I'll try and find it again) where the Reserve bank blamed investors for rising prices.
Times of highest price rises (2003 in Sydney, 2006 Perth etc) are during high percentages of investor buying.
Because they are receiving rent and negative gearing investors have higher debt servicing ability for the same outgoings, and can thus push prices up.
While investors only make up a smaller percentage of buyers, during some times (eg 2003 in Sydney) the total borrowing was higher for investors than OOs. This must be because they are using higher leverage, borrowing more, lower deposits etc (eg all non FHBs would have existing equity they bring with them and don't need to borrow as much)
Since it is new money flowing into the system, not total money (eg moving 200k from 1 house to another is non-inflationary) it does make sense that new investor borrowing is responsible for rises.
Gray vote.
Rents would rise in the short term, prices would come down.
Most countries don't have negative gearing, and they seem to do ok, how come if we have negative gearing costing us billions a year, we have a "housing crisis"?
House prices were falling in real terms when negative gearing was gone in the 80s but when re-introduced prices all went back into positive growth but rents did not decrease. This does not support the negative gearing keeps rents down and doesn't affect prices theory.
Why is it that renters, FHBs and economists are in favor of scrapping it and investors and real estate industry is in favor of keeping it? Do you really think people have lined up in the opposite way of their self-interest?
Perhaps in the very short term before the market re-adjusts
Investors losing tax breaks doesn't make houses disappear. The most important thing is the number of houses to people, not who owns them.
Well, the deflating of the real estate bubble will probably lead to a recession in the USA.
If you stop borrowing for housing above income growth (which must happen one day) aggregate spending in the economy would fall by 16%!!! leading to recession. See Steve Keen's blog for more details.
Yes, but much of this is funded out of debt. Even if you don't have any debt on your property, to keep the current value of your house future buyers must take out a large amount of debt - this is money they won't have for other things like starting their own businesses or spending time with their families or going out to restaurants etc. So for every letting or real estate agent you give money to, that's less clothes for kids or family holidays in the future for someone else.
It is not created wealth, it is spending future generations wealth now.
No, I have investments in shares, forestry, precious metals and cash in an online saver waiting for bargains.
Open the mind a bit, please. Investing in property does not neccessitate trampling over people, is does give opportunity to do so on occassion.
Now, what the hell would manage to inspire YOU, eh?
With no marketeers to inspire them, they would be like the blind.
