The House Price Thread

[Crankyhawk]

In terms of the list above, I'll throw a few simple policy ideas into the mix to see what people think and get some discussion.

1. Removing negative gearing, but with a 'grandfathering' clause that means it can be claimed on properties already owned (essentially the policy Labor took to the last election).

2. Reducing or limiting negative gearing across the board. This could be done with a cap on the losses that could be claimed overall (say $20,000), or the number of properties on which losses could be claimed (e.g. claimed only on 1-2 properties). The aim would be to discourage people loading up on 8-10 investment properties. Would need to have a phase in period so the market wasn't flooded with properties.

3. Introducing a %levy on loans for investment properties (~0.5%-1.0%). Any money collected by the government could be used to assist first-home buyers in some way (grants, stamp duty exemptions etc.) and/or put into social housing schemes.

4. Cutting the capital gains tax discount bought in by the Howard Government.

5. Investment in job creation in and transport to regional centers, where property is more abundant and better value. Could also include infrastructure projects or financial assistance to entice businesses (e.g. NBN, financial incentives such as payroll tax deductions)

I'd be interested in any other ideas that people would have.

I'd add progressive phase out of the grandfathering too, so each year you hold the property past the change to negative gearing you lose 5% of the tax benefit.

 

[Bunk Moreland]

Superannuation access for house purchases???

What is wrong with these ******* idiots?

Prices are too high... let's increase demand to drive them up more!

* my head hurts

 

[Upgrayedd]

Psh. Gen Y don't deserve to retire anyways.

 

[pugsville]

House prices are an extremely difficult problem.

Lets just say you have a policy that will drop house prices by 33% brilliant great for house affordability. However you just broke a large section of the populace whose wealth is tried to house value and their mortgage. How do you significantly drop house prices without breaking people's mortgages?

Thats why you answers like super for buying houses. It will increase house prices.

The real solution is make investment properties more expensive and less tax attractive. It's rent seeking behaviour and bad for the economy in that the money could be invested productively. However a very large number of people are doing quite nicely thankyou very much and they will scream.

 

[Bunk Moreland]

House prices are an extremely difficult problem.

Lets just say you have a policy that will drop house prices by 33% brilliant great for house affordability. However you just broke a large section of the populace whose wealth is tried to house value and their mortgage. How do you significantly drop house prices without breaking people's mortgages?

Thats why you answers like super for buying houses. It will increase house prices.

The real solution is make investment properties more expensive and less tax attractive. It's rent seeking behaviour and bad for the economy in that the money could be invested productively. However a very large number of people are doing quite nicely thankyou very much and they will scream.

A) make it prohibitively expensive for foreigners to purchase residential property here

B) completely remove all tax breaks for residential property investment for all new purchases (existing is left as is and grandfathered).

The ridiculous obsession with residential property investment and sky-high prices are bad things both economically and socially.

 

[Nuggs Bunny]

What a world it's become.

The very people who were the first to see land ownership move away from the aristocracy and the old money to the lower classes, are the very people determined to see the next generations return to the struggle of their parents and grandparents. I guess we've gone full circle. From a time where land was power, to a time where land was almost a right and now back to a time where land is nothing more than a tool for the already well-off to pile more money on.

Do the people suggesting it is still possible to buy a house (in certain areas and with well paying jobs) in the present day not understand that this problem is only going to get worse?

 

[Scotland]

'Do as I say, not as I do'
- every baby boomer ever

 

[Gough]

They're cute when they're stoned though. Baked old people are hysterical.

 

[Scotland]

Don't do drugs
- boomers

 

[The Edukator]

We've run out of land close to the city and population is growing.

Build more decentralised employment hubs and people will be more willing to live away from the city and have the added bonus of decent employment.

Attacking negative gearing and the tax system won't make a big difference. Melbourne is now an international city and with that status comes higher house prices. It's completely unreasonable to expect a place like New York, Paris or Hong Kong to have affordable large housing so why is that the expectation here?


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[Brunswick Trap King]

We've run out of land close to the city and population is growing.

Build more decentralised employment hubs and people will be more willing to live away from the city and have the added bonus of decent employment.

Attacking negative gearing and the tax system won't make a big difference. Melbourne is now an international city and with that status comes higher house prices. It's completely unreasonable to expect a place like New York, Paris or Hong Kong to have affordable large housing so why is that the expectation here?


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Population difference is still pretty large, I guess.

 

[The Edukator]

The same people applauding Andrews for cutting stamp duty to fhb are the same people who think using super money is bad because it will just inflate prices.

Don't you realise Dan Andrews has just legislated for the same result? So dumb.


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[The Edukator]

Thats the point. Renting ahoukd be cheaper than a mortgage in a healthy economy.

Feel bad for anyone who has bought in the last 12-24 months. Its gunna get messy.

Lmao you mean the people who just made an ROI of 25% + ? your spew **** political views are why you will forever remain poor


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[Maggie5]

The same people applauding Andrews for cutting stamp duty to fhb are the same people who think using super money is bad because it will just inflate prices.

Don't you realise Dan Andrews has just legislated for the same result? So dumb.


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He is also going to legislate taxing empty houses and flats, not so dumb.

 

[hamohawk1]

Two issue always mooted but not explained all the time
Supply: Theres a massive amount of cousins available..... its just not near an individuals work and they arent exactly inclined to live in shoebox or poorly constructed apartments and units. Increase density (doesnt actually have to be that big of an increase) but construct it right get developers the f*** out of the process till they're needed.
Investment: This was possibly a good initiative previously but when a lot of people are struggling to just get a roof over their head get this policy fixed. Housing is a right not a license to print money.

 

[The Edukator]

He is also going to legislate taxing empty houses and flats, not so dumb.

Oh great. So this is your justification or you still going to whinge when prices jump?


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[Maggie5]

Oh great. So this is your justification or you still going to whinge when prices jump?


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Justification?
Just didn't think that Andews was the cause of housing increases.

 

[Run n Spread]

House prices are an extremely difficult problem.

Lets just say you have a policy that will drop house prices by 33% brilliant great for house affordability. However you just broke a large section of the populace whose wealth is tried to house value and their mortgage. How do you significantly drop house prices without breaking people's mortgages?

Thats why you answers like super for buying houses. It will increase house prices.

The real solution is make investment properties more expensive and less tax attractive. It's rent seeking behaviour and bad for the economy in that the money could be invested productively. However a very large number of people are doing quite nicely thankyou very much and they will scream.

Someone will scream regardless. Good post btw.

1) Buyers need prices to drop.
2) Investors need Capital Growth to fund retirement. New mortgagees risk negative equity.

! and 2 are mutually exclusive. You can not please everyone. Someone will miss out. Given housing is a basic necessity I know where my money is.

One thing I am sick of is the smug attitude towards those locked out of the market. Just shut up. Stupid posturing or lectures achieve nothing.

 

[Howard Littlejohn]

They're cute when they're stoned though. Baked old people are hysterical.

 

[The Edukator]

Justification?
Just didn't think that Andews was the cause of housing increases.

Clearly this is what his policy is going to result in.


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[Maggie5]

Clearly this is what his policy is going to result in.


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Okay then, whatever you think!

 

[Power Raid]

high density rezoning should be added to the list. If land has, or will, have more utility through higher density then the price goes up.

I'd love to see a graph for the correlation.


I could only find one website and suggested the impact was 81%

 

[Power Raid]

Perhaps the nextgen need to think outside the box and give up the idea of living near mum. get out of the big cities like Melbourne and Sydney, you'll find more opportunity and cheaper housing.

 

[Herne Hill Hammer]

high density rezoning should be added to the list. If land has, or will, have more utility through higher density then the price goes up.

I'd love to see a graph for the correlation.


I could only find one website and suggested the impact was 81%

They were proposing this in Canberra around the time I left. I don't know how it got on but there sure was a lot of squealing about it.

Sub-dividing blocks, building up rather than out and filling in bush/parkland.

 

[Frank Grimes]

1. Removing negative gearing, but with a 'grandfathering' clause that means it can be claimed on properties already owned (essentially the policy Labor took to the last election).

2. Reducing or limiting negative gearing across the board. This could be done with a cap on the losses that could be claimed overall (say $20,000), or the number of properties on which losses could be claimed (e.g. claimed only on 1-2 properties). The aim would be to discourage people loading up on 8-10 investment properties. Would need to have a phase in period so the market wasn't flooded with properties.

3. Introducing a %levy on loans for investment properties (~0.5%-1.0%). Any money collected by the government could be used to assist first-home buyers in some way (grants, stamp duty exemptions etc.) and/or put into social housing schemes.

4. Cutting the capital gains tax discount bought in by the Howard Government.

5. Investment in job creation in and transport to regional centers, where property is more abundant and better value. Could also include infrastructure projects or financial assistance to entice businesses (e.g. NBN, financial incentives such as payroll tax deductions)

I'd be interested in any other ideas that people would have.

I'm not a fan of point 1 of you are going by Labors policy. I can see unintended consequence with this. Over time there will be few places to rent in the inner or middle suburbs. If investors invest in new housing only then that pretty much means the only avaliable properties for renters will be either the outer suburbs or CBD apartments. It will make the rents much more expensive for the inner/middle suburbs (but may make it cheaper for the outer suburbs).

I agree with point 2. This wouldn't hurt the Mum and Dad investors but will stop people who are leveraging themselves with 4, 6, 7 properties for the tax breaks and the idea of flipping them off on a regular basis.

On point 3. I'm not sure about the Levi idea. The problem with giving grants, reduction in Stamp duty etc is that it increases house prices. Remember the first home buyers grant in the 00's.

Point 4. I agree that the CGT discount should be reduced. 50% is very generous. I think there is no coincidence that house prices started to increase rapidly since it was introduced in 2000. In the end this is the main driver IMO. Negative gearing makes people invest for the yeilds while CGT makes people invest in hoping for increasing house prices.

Absolutely agree with point 5. Approx 45% of Australia's population live in two cities. This is why house prices in these cities are the most unaffordable. Australia needs to become more decentralised and there should be more incentives for people to move to other areas.