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Dear VYberlinaV8
1. All depending on Kevin Rudd + ALP Government own political convictions and true understanding of how the Australian Economy works and need to function as well as its skills in economic management.
2. Will this new ALP govt able to ignore its political party's interests and truly govern for the National Interests for Australia and for all Australians? ... Kevin Rudd says he WILL ...which is political correct and highly appealing... but I think he'sound "hollow" and "insincere" to me despite his pretense with a ever smilling face and airs of (false) confidence, as far as I am concerned....
3. Time will tell
Cheers,
Kenneth KOH
Hi Kenneth,
Regardless of Rudd's own political convictions, he still needs to govern within the constraints of the constitution, and within what the majority of Australian's consider 'reasonable'. It doesn't take much to kick someone out of govt come election time.
Also, the ALP has been down the path of abolishing negative gearing before (the late 80's, I believe), and apparently it was a disaster. They won't make that mistake twice.
The mistake I think they are most likely to make is to artificially subsidise potential home buyers (eg increase FHOG), which will further increase demand.
They may also push for more land release, but where I live (Canberra), this will be overwhelmingly at the edges of the current suburbs, and will serve only to firm up my inner city properties as rare and desirable places to live.
As always, it's up to the individual to assess each situation on its merits, and to act accordingly. Fundamentally, those persons who understand the basic concepts of 'spend less than you earn', 'invest money in assets that generate cash flow and potentially rise in value' and 'invest other peoples' money where practical' will always outperform the people who simply spend all they earn. Australia is very unlikely to go broke in the short term, meaning that any individual who can outperform the masses in terms of savings and investments will almost certainly end up wealthy.
On a more personal note, I am unconcerned as to whether others are uncomfortable about the current political climate. My strategy remains unchanged: purchase quality, very well located property priced at or just below suburb median price. Unless the country goes broke, there will always be people willing to pay the rent I demand, and as population grows, the value of the property will rise in line with localised demand. If it turns out I don't know what I'm talking about, I'll probably lose a few bucks over the years (although at the moment my IP portfolio is cashflow positive after tax). If I do have an idea about what I'm doing, I'll hopefully get to a point where my investment income exceeds my working income after about another 12 - 15 years.
It is likely, I think, that a period of property price stagnation is due, and could last 10 or more years. During this time I'll continue to purchase IP (despite being told I'm crazy). Then I'll ride the next big boom off into retirement...
