Housing market 2021

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Seeds

TheBrownDog
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The boom in the housing market in the past year has reached stratospheric levels.

what have we learned:

immigration has nothing to do with australias housing price problem. ofcourse most economists have been saying this all along as demand doesn’t impact long run price but the punters didn’t care and wanted to blame their fears of immigrants. Yet house prices now rise even faster with immigration plummeting to almost zero.

so now we can eliminate immigrants as the problem what is the actual problem:

record low interest rates, incredibly lax lending criteria (so much for the royal banking commission) and too much red tape with land releases.

do people even care about this anymore? Are we just happy to turn our country into a medieval land of rich land owners and serfs? The media doesn’t even raise this as an issue anymore. Yet it’s worse then it’s ever been.
 
Seeds said:
The boom in the housing market in the past year has reached stratospheric levels.

what have we learned:

immigration has nothing to do with australias housing price problem. ofcourse most economists have been saying this all along as demand doesn’t impact long run price but the punters didn’t care and wanted to blame their fears of immigrants. Yet house prices now rise even faster with immigration plummeting to almost zero.

so now we can eliminate immigrants as the problem what is the actual problem:

record low interest rates, incredibly lax lending criteria (so much for the royal banking commission) and too much red tape with land releases.

do people even care about this anymore? Are we just happy to turn our country into a medieval land of rich land owners and serfs? The media doesn’t even raise this as an issue anymore. Yet it’s worse then it’s ever been.
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People care about housing affordability. Until they own a house. Then they care about house prices going up, and up, and up.
 
owen87 said:
People care about housing affordability. Until they own a house. Then they care about house prices going up, and up, and up.
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I own a 2 million dollar house. I care about affordability. I want house prices to be much much cheaper. House prices are mad at the moment and have been for 15 years.

We need less red tape on land releases, end of stamp duty and replace it with large land taxes which act as a wealth tax, include the home in the pension test if its over 750 thousand dollars of value and remove the capital gains discount on rental properties, remove the first home owner schemes which simply pump up prices and have tighter regulation on lending standards.
 
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owen87 said:
For many people, their parents bought a home in an inner suburban area for < $100,000 in the 70s which is now worth > $1m. That doesn't mean they have a tonne of cash.
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Yes but if you are earning a pension you should not be living in a 1 million dollar plus house. You should downsize. Taxes shouldnt be gping to welfare for people with a million dollars in assets. Plus with higher land taxes and no stamp duty most pensioners will want to downsize anyway. Remember pensioners have no need to live in the inner city where all the jobs and high priced houses are as they dont work. That housing stock needs to be freed up for the workers.
 
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Seeds said:
Yes but if you are earning a pension you should not be living in a 1 million dollar plus house. You should downsize. Taxes shouldnt be gping to welfare for people with a million dollars in assets. Plus with higher land taxes and no stamp duty most pensioners will want to downsize anyway.
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Disgaree.
 
owen87 said:
Disgaree.
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Do you want to fix the housing problem or not? Young people who pay the taxes for those pensions cant access the houses near their jobs because the pensioners live in them for tax purposes. Its completely ridiculous. Young people get hit twice. Many pensioners would love to move out of the cities but dont because the tax system encourages them to stay.

Lets have all the old retired people live near the offices whilst the office workers have to live in the outer suburbs and travel into the cities clogging up the roads and creating extra emissions. Its completely warped and unjust.
 
Seeds said:
Do you want to fix the housing problem or not? Young people who pay the taxes for those pensions cant access the houses near their jobs because the pensioners live in them for tax purposes. Its completely ridiculous. Young people get hit twice. Many pensioners would love to move out of the cities but dont because the tax system encourages them to stay.

Lets have all the old retired people live near the offices whilst the office workers have to live in the outer suburbs and travel into the cities clogging up the roads and creating extra emissions. Its completely warped and unjust.
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Removing barriers for retirees selling =/= forcing retirees to downsize because their home has happened to appreciate in value while they live in it.
 
Seeds said:
Do you want to fix the housing problem or not? Young people who pay the taxes for those pensions cant access the houses near their jobs because the pensioners live in them for tax purposes. Its completely ridiculous. Young people get hit twice. Many pensioners would love to move out of the cities but dont because the tax system encourages them to stay.

Lets have all the old retired people live near the offices whilst the office workers have to live in the outer suburbs and travel into the cities clogging up the roads and creating extra emissions. Its completely warped and unjust.
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Fix the housing problem at the expense of kicking people out of homes they may have lived in for decades. Yeah that's great.
 
owen87 said:
Removing barriers for retirees selling =/= forcing retirees to downsize because their home has happened to appreciate in value while they live in it.
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They don't have to sell - they can get a reverse mortgage on their million dollar home.
 

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iluvparis said:
Yes - if they want to still get the pension - which is fair enough. They can stay - just don't access the pension.
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Which I disagree with.

If you buy a house in 1983 and live there for 40 years, why should you be locked out from the pension just because your house is worth more? You don't necessarily have any more access to cash than someone in a house worth < $1m.
 
owen87 said:
Which I disagree with.

If you buy a house in 1983 and live there for 40 years, why should you be locked out from the pension just because your house is worth more? You don't necessarily have any more access to cash than someone in a house worth < $1m.
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Because you are wealthy enough to fund your own retirement and not rely on the state.

Yes you do have more access to cash because you can re mortgage your house.
 
iluvparis said:
Because you are wealthy enough to fund your own retirement and not rely on the state.

Yes you do have more access to cash because you can re mortgage your house.
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So you're forcing people to effectively sell the house they lived in for 40 years?

I disagree. As I said before.
 
owen87 said:
So you're forcing people to effectively sell the house they lived in for 40 years?

I disagree. As I said before.
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No I am not forcing them - I've told you multiple times they can stay there and not get the pension.
 
iluvparis said:
No I am not forcing them - I've told you multiple times they can stay there and not get the pension.
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Not really a great solution though, is it. Given the explosion in house prices in the last 20 years there'd be a lot of people that don't have a truckload of cash for retirement that have been living in the same home long-term that simply happens to be worth 10 times what it once was.

There's a reason the family home is typically excluded from the wealth test for the pension. It's not a liquid investment, and unless you specifically want to do what Seeds suggests, and force people to sell out in order to fund retirement, it's not good policy.

I'd rather see efforts made to reduce housing as investment than people having to mortgage their long-term primary residence to fund retirement.
 
owen87 said:
Not really a great solution though, is it. Given the explosion in house prices in the last 20 years there'd be a lot of people that don't have a truckload of cash for retirement that have been living in the same home long-term that simply happens to be worth 10 times what it once was.

There's a reason the family home is typically excluded from the wealth test for the pension. It's not a liquid investment, and unless you specifically want to do what Seeds suggests, and force people to sell out in order to fund retirement, it's not good policy.

I'd rather see efforts made to reduce housing as investment than people having to mortgage their long-term primary residence to fund retirement.
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And I've told you multiple times how they can get a truckload of cash - reverse mortgage their million dollar home.
 
I heard on a podcast that something like 400,000 Australians living overseas before the pandemic have returned but that they are not counted in immigration or visitor numbers as they're Aussies.

My understanding is that Australia normally lets about 250,000 immigrants in per year so 400,000 would put add more to housing demand than expected. They also probably shunned inner-city apartments which were built with the normal new arrivals in mind.

Couple that with lower interest rates allowing more people to qualify for loans and add to demand AND throw in government incentives allowing people to have a deposit quicker and you get this.

The question is, when everyone gets vaccinated, how many of these 400,000 people go back overseas?
 
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