Taylor
Community Leader
- Moderator
- #3,401
You are not understanding.
Rich people en masse would not be buying poor Peoples homes if they did not get tax benefits to do so.
Tax benefits fuel housing growth. Without them housing doesn’t grow as fast thus there is much less benefit for someone to buy them.
They are 2 different issues.
Investment loans are already much higher than OO loans. As long as you can claim a loss on property people will use it.
You need to look at it as a preservation of wealth strategy. Property is worth one property worth of whatever the figure ends up being post rampant inflation cycle.
You need only look at the strategy of blackrock buying so much residential property. It's treating it as a lifeboat for wealth.
This isn't something anyone who will be impacted created, they will just pay the bill for it when the wealthy park their money into property to ride out inflation and the poor will never get a chance to own it again.
I'm not expecting the real value of property to change, it might even go down, but the value as a measure of ability to pay for it will be through the roof. Wage growth won't keep up with the actual cost of living increases because the CPI is distorted by basket substitutions. The ability to pay people more will diminish when there is less surplus funds in people pockets after fuel, housing and food to spend on non critical "luxuries" like entertainment.