Property Watch

[bunsen burner]

Its far more expensive to purchase a home as a percentage or multiple of annual income.

So yeah, it isn't something "Gen Y" is just imagining.

When taking into consideration other factors, yes, you are imagining it. Other factors:

1. Baby Boomers typically were married early 20s with kids on one income. These days it double income up until 30s.
2. Baby Boomers didn't have the same lending products we enjoy today
3. Back then people still saved their arses off, and slummed it out in the suburbs until they paid down their mortgage.

Variable have changed but it's essentially the same predicament: buying your first house is very hard and takes years of sacrifice. Gen Y are conveniently only looking at wage to house price ratio and using it to feel sorry for themselves. This phenomena seems to stem from Gen Y's entitlement culture.

Stop whining, get your head down, save a deposit, and enter the great australian dream. And if you're one who resents that others have parents who are handing down property inheritances then you best get your own slice of the action because no one cares about the people who miss out.

 

[LouisCK]

LOL ok mate

 

[bunsen burner]

When you get older and see the patterns you will understand.

 

[LouisCK]

No its just more the crazy assumptions that are funny.

The lack of statistical analysis would be worth debating, for someone with more of an inclination to do so.

 

[Scotland]

Sounds like you have to do exactly what baby boomers did. I just don't understand why Gen Y think it's normal to buy houses in mid 20s, or 20s at all? Maybe the word "GenY" is a clue?

A massive factor in this is the 'get in as soon as you can, house prices always go up and so do rents' mentality that has been drilled into society by the previous generation.

If I had rented the house I own and live in for the last 4 years and saved the difference between rent and mortgage interest for a deposit I would probably be behind today, and I'd be looking at a 25-30% higher purchase price . That's the reality of my situation. Others would find themselves well ahead, paying the same or lower purchase price etc. Everyone's circumstances are different. My house is pretty basic, but had prices been lower I would've bought about the same and had a smaller loan, rather than maxing out and getting a giant 4 bedroom place that a 24 year old doesn't need. Again, each to their own and I see reason not to 'start small' also (reason being stamp duties, selling agents fees etc. mount up in the tens of thousands quickly wiping out built up equity).

The reality is that unless you can live at home for free, rents are so high that the difference between renting and buying is generally pretty minimal so 'save a big deposit like I did back in my day' tends to be fairly hollow advice. Share-housing is obviously an option, but there's nothing stopping you from sharing a house you own rather than one you rent.

 

[thetank]

Agree 100% with LouisCK.

It's not a case of Gen Ys being soft, it's the case of loan/income ratios skyrocketing over the past 10 years.

It's also an unbalanced playing field for owner-occupiers vs investors - the latter are able to bid more due to negative gearing. And why the hell are property-related losses allowed to offset normal taxable income? If I make a loss in the share market, I can't use that loss to offset my taxable income, only a share-related capital gain.

 

[bunsen burner]

A massive factor in this is the 'get in as soon as you can, house prices always go up and so do rents' mentality that has been drilled into society by the previous generation.

I don't think so. Real Estate markets have been flat in most cities for 10 years. No one talks about real estate these days like the used. I love the shit and find it just doesn't come up in conversation.

More likely is GenY read the media that constantly tells them about housing prices v wages and from this they just assume that it was easy to buy a house for everyone up until now. They wrongfully think they have been hard done by but the truth is nothing has really changed. The big picture is still the same, just some of the variables that make it up have moved and the only one that gets air play is price v wages. There's a s many anti property spruikers out there as pro and this one sided argument gets a run all the time.

No one wants to read an article that claims nothing has really changed. May as well write a headline "nothing outrageous to see here, move along".

The reality is that unless you can live at home for free, rents are so high that the difference between renting and buying is generally pretty minimal so 'save a big deposit like I did back in my day' tends to be fairly hollow advice.

Complete rubbish. One major problem is we live in a consumer culture. We have to have everything now. This generation are spenders like never before.

Sacrifices and hard yards have to be made. Foxtel has to switched off for a couple of years. Restaurants and holidays sacrificed.

I repeat: little has changed. It's always been hard and will always continue to be so. Some people are just not going to be able to cope with that and will blame everyone but themselves.

 

[bunsen burner]

Agree 100% with LouisCK.

It's not a case of Gen Ys being soft, it's the case of loan/income ratios skyrocketing over the past 10 years.

But did you not acknowledge the other factors? Do you really think they are insignificant.

Do you have any sort of anecdotal evidence that housing was easy to by for baby boomers?

It's also an unbalanced playing field for owner-occupiers vs investors - the latter are able to bid more due to negative gearing.

That's not how it really works. Investor demand pushes up pricing.

And why the hell are property-related losses allowed to offset normal taxable income?

I've told you why in this thread but you choose to ignore it. I'll tell you again but no doubt you'll still be scratching your head:

1. Provide a vehicle for average people to build wealth for retirement (super will just not cut it for most)
2. Incentive for housing demand so renters can have somewhere to live

Government must make available a vehicle for the average Joe to build wealth. The opportunity is available to you too. If you can't take advantage of it maybe you are one of the weak links? Don't expect others to be obliged to not take their opportunity on the account of others who are too weak or negative to do so.

If I make a loss in the share market, I can't use that loss to offset my taxable income,

Yes you can. Sound like you really don't know what you're talking about.

What do you think the odds are of being right across the board on this?

 

[bunsen burner]

No its just more the crazy assumptions that are funny.

What assumptions? Please list and refute.

The lack of statistical analysis would be worth debating, for someone with more of an inclination to do so.

I'm Gen X. I don't need stats. I saw what I saw and everyone my age knows it. It's FACT:

1. Baby boomers tended to get married and have kids earlier (i.e. early 20s). This made saving hard.
2. Baby boomers typically bought their houses in their 30s (nothing has changed here, it's a maturity thing)
3. Baby boomers struggled to save for deposits and to pay their mortgages
4. Baby boomers also had to often move out to the sticks
5. Baby boomers had to make massive sacrifices to save deposits.

I grew up witnessing this. This is how it was and you'd be hard pushed to find any people over 40 who will say it was different. I find it laughable that you have the audacity to sit their and tell me I have it wrong when you weren't there yourself.

Rather than blindly refuting something that you have no idea if it is correct or not, you should go do some research and ask around.

Honestly, what are the odds that I'm either lying or mistaken? I'm just telling you how it was and has always been but it doesn't fit into the excuse you are making for yourself.

 

[LouisCK]

Haha yep ok bunsen.

 

[bunsen burner]

Haha yep ok bunsen.

Didn't think you had an answer.

Tip: when you don't know shit, shut mouth, open ears.

 

[LouisCK]

Thanks bunsen

 

[Smell The Glove]

Bunsen burner is a classic example of the boomer/early Xer who started the Ponzi Scheme and had it easy then has the arrogance and temerity to dictate to Gen Y that they have to enter the market just to prop up the value of his non productive asset.

Remember he has a lot of money at stake convincing you to enter the property market. Don't think this idiot has actually worked hard (or at all) for his "wealth".

Don't listen to this tool- he is you classic shyster.

 

[bunsen burner]

Bunsen burner is a classic example of the boomer/early Xer who started the Ponzi Scheme and had it easy then has the arrogance and temerity to dictate to Gen Y that they have to enter the market just to prop up the value of his non productive asset.

I almost feel sorry for you that you think such idiotic thoughts.

Ponzi scheme? Perhaps you don't truly understand what a Ponzi scheme is? Property is merely an opportunity to create wealth. An opportunity available to all of us (yes, yoo too). Not sure how much joy you're going to get out of hatin'.

Gen Y that they have to enter the market just to prop up the value of his non productive asset.
Remember he has a lot of money at stake convincing you to enter the property market.

I'm on record on these very boards that I think property will be slowish for the next 5+ years. Some markets are moving now but I think it will be short lived. I'm not trying to convince anyone to enter the market other than provide information and help to people who want to know about property.

As for any advice or encouragement I provide here, that's hardly going to alter the housing prices anywhere. You really are talking absolute shit.

Don't think this idiot has actually worked hard (or at all) for his "wealth".

Idiot? Care to qualify that accusation?

I make money from my intellectual IP. It's not how hard you work, it's how smart you work.

Don't listen to this tool- he is you classic shyster.

Wasn't aware I was selling anything here except an honest opinion gained through first hand experience, with no strings or agendas.

Run your mouth all you like but don't be crying when you get it back with interest.

 

[LouisCK]

What does the 'I' in "Intellectual IP" stand for?

 

[bunsen burner]

What does the 'I' in "Intellectual IP" stand for?

That the best you got? I had a massive night last night and have massive hangover. Wow, you got me on that one. Anything else?

 

[thetank]

Bunsen Burner, you are a maggot and have no idea what you're talking about.

But did you not acknowledge the other factors? Do you really think they are insignificant.

Do you have any sort of anecdotal evidence that housing was easy to by for baby boomers?

My comment was directed towards unaffordability re. skyrocketing loan/income ratios.

House price/income ratios:
- 1985: ~2.60x
- 1995: ~3.30x
- 2008: ~6.00x

Source: http://www.jnbit.org/upload/JNBIT_Liu_Daly_2011_2.pdf

So, what is your evidence that houses were harder to buy for baby boomers?

That's not how it really works. Investor demand pushes up pricing.

My comment was that negative gearing is the only thing holding up pricing.

Why do you think there is such high investor demand for property in Australia? BECAUSE THERE IS NEGATIVE GEARING, they can gamble on the potential for capital gains because they have the ability to reduce their taxable income from their normal jobs.

I've told you why in this thread but you choose to ignore it. I'll tell you again but no doubt you'll still be scratching your head:

1. Provide a vehicle for average people to build wealth for retirement (super will just not cut it for most)
2. Incentive for housing demand so renters can have somewhere to live

Government must make available a vehicle for the average Joe to build wealth. The opportunity is available to you too. If you can't take advantage of it maybe you are one of the weak links? Don't expect others to be obliged to not take their opportunity on the account of others who are too weak or negative to do so.

So you believe that creating artificially-supported property prices is the proper way to build wealth in this country, on a nationwide scale? I have properties in my name already. And yet I acknowledge the fact that, by having so much money tied up in property, our economy suffers as a result. Bricks and mortar do not add any value to the Australian economy on a global scale, it just circles money from purchasers to tradies and landholders (and the government, via capital gains tax, stamp duty, and increasing land taxes). Lazy passive cash flow.

Yes you can. Sound like you really don't know what you're talking about.

My comment:
If I make a loss in the share market, I can't use that loss to offset my taxable income

You CANNOT use a loss on shares to reduce your taxable income from your job.
You can use a loss arising from negative gearing to reduce taxable income from your job.

Where are you getting your accounting information from, Swaziland?

What do you think the odds are of being right across the board on this?

A heck of a lot higher than the odds of you being correct on even one point.

 

[bunsen burner]

Bunsen Burner, you are a maggot and have no idea what you're talking about.

Obviously intelligence peaks in your 20s and anyone who is older and has the benefit of experience and watching patterns is not wiser.

Typical Gen Y who thinks they know everything.

My comment was directed towards unaffordability re. skyrocketing loan/income ratios.

No you weren't. You were lamenting how hard it is to buy a house these days. You have put forward the loan/income ratio and claimed it's an open/shut case. I have provided other variables that you conveniently fail to address.

House price/income ratios:
- 1985: ~2.60x
- 1995: ~3.30x
- 2008: ~6.00x

Source: http://www.jnbit.org/upload/JNBIT_Liu_Daly_2011_2.pdf

Don't bother with sources. I'm complete across the rising gap between wages and loan payments. I have never denied this.

So, what is your evidence that houses were harder to buy for baby boomers?

I have stated numerous times. You choose to ignore them and have failed to refute them with counter arguments.

It's quite clear that one group of people here have decided on a view and are not open to discussing anything different. That's called close-mindedness which is a direct function of lack of intelligence. You are a dumb arse essentially.

My comment was that negative gearing is the only thing holding up pricing.

Why do you think there is such high investor demand for property in Australia? BECAUSE THERE IS NEGATIVE GEARING, they can gamble on the potential for capital gains because they have the ability to reduce their taxable income from their normal jobs.

Not sure why you are telling me something I already know? Seems like your building a straw argument.

So you believe that creating artificially-supported property prices is the proper way to build wealth in this country, on a nationwide scale?

I've explained this. How many times do I have to repeat before thick heads like you take it in?

1. Yes, the government needs to create opportunity for the average Joe to build wealth. Negative gearing with property and shares is one of those.
2. The Govt needs to provide incentive for people to provide housing for renters. Take away negative gearing and rents will go up.

I read in the paper today an article by some fool who thinks housing affordability is the biggest election issue. This may be true in itself, but there is no solution. At best political parties will make false promises. The problem with our housing inaffordability is not negative gearing but it's a downside of our strong economy over the last 10+ years. There's no such thing as a eutopia and the downside of successive govt's good economic management is the economy is bloated. Tradies these days are earning $120k. You can't build a house for less than $400k so unless wages are reduced and the economy is deflated you can't make housing more affordable.

It is delusional people like you with a chip on your shoulder (me me me) that thinks the property market is the root of all evil when it fact it is one component of the big picture.

Furthermore, it's people like you who are all about yourselves. We had a massive economic boom on the 2000s and Costello and Howard took advatange of this and tweaked the economy for good times. All of a sudden many of the working class moved to middle class (usually through property) and the spin of benefit was a better standard of living for Gen Y kids. Now Gen Y are of age they want their "cheap housing" too.

Here's a message to all you Gen Y "me me me" whiners:

Despite what I say and think, nothing will change. It is as it always has been - buying a house takes lots of sacrifice. Whine all you want but affordability won't get much lower. Either harden the f*** up or miss the boat. For those who miss the boat, maybe deep down you are the weaker links who find it harder to survive.

My comment:
If I make a loss in the share market, I can't use that loss to offset my taxable income

Wow. I truly am speaking to an eeediot.

First, let me explain the difference between an intelligent person and a dumbarse: A dumbarse has a stance and fits everything into it to validate his stance. This means logic gets skewed and broken. An intelligent person follows the logic and bends their view around the logic and truth.

So how does this relate:

We were talking about negative gearing for property. You claimed that if you make a loss on the share market you can't claim it. But you are comparing apples to oranges. You can't see this because all you were thinking is bending stuff to suit your argument.

Apples to apples: you buy some shares, sell them, make a loss. You buy a property, sell it, make a loss.

Oranges to oranges: You borrow to buy investment property, claim the loss. You borrow to buy shares, claim the loss.

You have conveniently tried to compare the underlined scenarios. Apples to oranges. Is the penny dropping yet that you are a dumbarse?

Where are you getting your accounting information from, Swaziland?


A heck of a lot higher than the odds of you being correct on even one point

You've just been owned idiot.

 

[LouisCK]

My opinion is that thetank makes more sense than bunsen.

 

[bunsen burner]

My opinion is that thetank makes more sense than bunsen.

refer to this:

First, let me explain the difference between an intelligent person and a dumbarse: A dumbarse has a stance and fits everything into it to validate his stance. This means logic gets skewed and broken. An intelligent person follows the logic and bends their view around the logic and truth.

----------

All you are doing is denying yourself the truth and believing stuff that clearly is incorrect. You haven't even had the balls to explain why I am wrong. All you're doing is sitting there and repeating over and over that you are right without actually offering a logical argument.

You should wake up to yourself. I'd be embarassed if I was you.

 

[Scotland]

1. Yes, the government needs to create opportunity for the average Joe to build wealth. Negative gearing with property and shares is one of those.
2. The Govt needs to provide incentive for people to provide housing for renters. Take away negative gearing and rents will go up.

Property = wealth is the government taking the easy path. Real wealth is created by productivity.

The 'rents will go up' thing is very 1980s.

Tradies these days are earning $120k. You can't build a house for less than $400k so unless wages are reduced and the economy is deflated you can't make housing more affordable.

It costs Holden what, $35k to build each Commodore? They sell for roughly that amount. I can buy a 3 year old model for about half that and a 10 year old model for a couple of thousand. Cars depreciate, why should a 50 year old house cost the same as a brand new one next door?

The housing market is propped up because billions of dollars are leveraged in land. If you buy an IP your real investment is the land, not the dwelling. You of course know this. If you buy an existing property you are contributing nothing to society. Nothing. You're not 'providing a home for someone to rent', you're just acquiring an asset off someone else and holding it in the hope the land value increases. If the government wants to stimulate construction of new dwellings then consider measures to provide tax relief for construction of new dwellings. Negative gearing is just tying up billions of tax dollars in speculative, non-productive assets.

What's being missed in the income multiplier thing is the potential for income growth to go with asset growth. 'Me me me' Gen Ys face the prospect of minimal asset growth and minimal wage growth in the short to medium term as the boom pumped up both. The multiplier is a lot more important when these things stop going up.

 

[LouisCK]

Its the way you instantly infer things about people whilst demonstrating a lack of analytical ability, that I find annoying. Many of your "other factors" are simply wrong for various reasons that I can't be arsed speaking to you about, because I don't think either of us will gain anything from a discussion that one of us has such a blatantly obviuous vested interest in.

For the record you're correct about how negative gearing works for shares and property.

So congrats on that one.

And whilst some of your 'other factors' are just plainly wrong, its more the way you arrive at the conclusion of "Gen Y are whinging and need to harden up!" as if it means anything.

You acknowledge that yes, modern young adults will likely need two incomes instead of one, and that the multiples involved clearly demonstrate housing is less affordable (and more leveraged) and then somehow arrive at "but it was just as tough back in the day!" when the statistics clearly show otherwise.

 

[bunsen burner]

Property = wealth is the government taking the easy path. Real wealth is created by productivity.

Something the average Joe and Betty can't do working a 9 to 5 job. The Govt has provided opportunity available to average people.

You know these gen Y people? They actually think they should be able to afford a house in a good suburb in their early to mid 20s. Show me an era when this has been possible? And don't say North Perth in the 70s as it was slummy shit dump.

And then if they were to get their affordable housing you can be come their mid 30s they be wanting it to go up.

Typical Gen Y. "I am entitled to an easy ride" and "I have been lucky enough to grow up in a prosperous period with an excellent standard of living but now dump all that stuff so I can get a cheap house".

Some of Gen Y will save their arses off, buy a house, and watch it and their wealth appreciate over time. They will become to appreciate our housing market and will watch the next generation come in and complain about house pricing.

Then some of Gen Y have had it so easy they won't be able to do the hard yards and will whine about their lot for the rest of time (because no one blames themselves if they are in a shit predicament). I won't feel sorry for the weak.

The 'rents will go up' thing is very 1980s.

I see. So supply and demand is an 80s thing like a hypercoloured tshirt? That's a new slant on things I guess.

It costs Holden what, $35k to build each Commodore? They sell for roughly that amount. I can buy a 3 year old model for about half that and a 10 year old model for a couple of thousand. Cars depreciate, why should a 50 year old house cost the same as a brand new one next door?

Apples to oranges.

- cars sooner or later become un roadworthy and therefore appreciate to 0. Houses can last for 1000s of years
- There is actually a premium on new houses/units. They're worth more
- Part of the parcel of housing price is land and location. These are tied in and allow buildings to appreciate

The housing market is propped up because billions of dollars are leveraged in land. If you buy an IP your real investment is the land, not the dwelling. You of course know this. If you buy an existing property you are contributing nothing to society. Nothing.

Did you not read the bit about the Govt providing an opportunity for average Joes to build wealth?

What's being missed in the income multiplier thing is the potential for income growth to go with asset growth. 'Me me me' Gen Ys face the prospect of minimal asset growth and minimal wage growth in the short to medium term as the boom pumped up both. The multiplier is a lot more important when these things stop going up.

It's cyclical and it's just bad luck Gen Y aren't having a massive boom. Welcome to the real world. Another one will come.

 

[bunsen burner]

Its the way you instantly infer things about people whilst demonstrating a lack of analytical ability,

Yet I have listed reasons, and then repeated them, and you have conveniently ignored them. There's a few on here who lack analytical ability and it's not me.

You're essentially accusing me exactly of what you are doing.

 

[LouisCK]

Yet I have listed reasons, and then repeated them, and you have conveniently ignored them. There's a few on here who lack analytical ability and it's not me.

You're essentially accusing me exactly of what you are doing.

Some of your reasons are just laughable, but I refuse to engage with you on principle as you got personal straight off the bat.