I doubt it would increase the housing supply in general. Once you have a lot of empty renters the building would stop. But I am pretty sure there would be more overshoot and hence deeper and longer busts in the building industry as well as perhaps longer booms.
Any policy aimed at creating malinvestment (and the building of unneeded dwellings would have to be classed as malinvestment!) is just crackers.
Then simply get rid of NG altogether.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
Based on the information on rental property schedules by state and territory, the REIA estimates the following increase in median rents as the result of the Henry Review recommendation: 0.8 per cent for NSW 1.9 per cent for Victoria 3.3 per cent for Queensland 2.3 per for South Australia 1.9 per cent for Western Australia 1.1 per cent for Tasmania 1.2 per cent for NT 2.4 per cent for ACT
What a joke. REIA CEO pretends to care for renters, outlining the rent increase they think would result from the removal of negative gearing... but these tiny increases (even if they did happen as a result of NG removal) pale in comparison to the price increases in resi property as speculators have pumped them up the last couple of years.
As for thinking like an investor, if I bought an apartment to rent out, I would have strata fees to add to my annual outgoings.
I wouldn't consider an apartment over a house as being either better or worse as an investment. I know people who have built new to rent out and none of them have bought apartments.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
Fine by me. I would look forward to the increased rents and there might be a few bargains available for a little while while people were derping around wondering what to do, so I would buy with my ears pinned back. Getting rid of NG would definitely favour large landlords who get little advantage from NG anyhow, and of course corporates and foreign investors who don't benefit from NG at all.
On the other hand I'd say people expecting nice dwellings to get cheaper will be pretty disappointed and the increases in the rental assistance bill will more than outweigh extra tax receipts once everything has settled down.
The truth will set you free. But first, it will piss you off. --Gloria Steinem AREPS™
Fine by me. I would look forward to the increased rents and there might be a few bargains available for a little while while people were derping around wondering what to do, so I would buy with my ears pinned back. Getting rid of NG would definitely favour large landlords who get little advantage from NG anyhow, and of course corporates and foreign investors who don't benefit from NG at all.
That may be the case everywhere else, but in Perth, I believe it will have a big impact. A lot of mining related high wage earners have dived into investment property due to the "free money" they get from the government via NG. It has been spruiked to hell and back over here and I have lost count of the number of fuckwits that have told me to buy an investment property to reduce my tax bill.
That is my whole reason for being bearish on Perth property. It is full of amateur (dumb) money. You only have to look at the number of suckers who bought Jims franchises to see that WA is full of fools and their money.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
As for thinking like an investor, if I bought an apartment to rent out, I would have strata fees to add to my annual outgoings.
I wouldn't consider an apartment over a house as being either better or worse as an investment. I know people who have built new to rent out and none of them have bought apartments.
OK - that isn't just for investors. Our benefits system encourages renters to stay renters by paying rental assistance but cutting that when they buy.
If you buy a new apartment you can use a 5% deposit bond until the apartment is ready to hand over to the new owner, and then you settle. So the interest cost commences on settlement. The interest costs are contained until you have a rentable commodity.
If you buy a new detached house the process is normally to buy vacant land and then have a house erected on it - that process can take between 6 and 12 months so it's a more costly exercise and the price isn't fixed, it can vary depending on the cost of putting in footings. It's a costly exercise that requires expenditure and interest costs well before any income is received. It's a far less attractive option for investors unless they can arrange settlement on completion only.
And then there is the landscaping etc.
Investors will buy apartments or established homes to get instant rent.
OK - that isn't just for investors. Our benefits system encourages renters to stay renters by paying rental assistance but cutting that when they buy.
If you buy a new apartment you can use a 5% deposit bond until the apartment is ready to hand over to the new owner, and then you settle. So the interest cost commences on settlement. The interest costs are contained until you have a rentable commodity.
If you buy a new detached house the process is normally to buy vacant land and then have a house erected on it - that process can take between 6 and 12 months so it's a more costly exercise and the price isn't fixed, it can vary depending on the cost of putting in footings. It's a costly exercise that requires expenditure and interest costs well before any income is received. It's a far less attractive option for investors unless they can arrange settlement on completion only.
And then there is the landscaping etc.
Investors will buy apartments or established homes to get instant rent.
I would have thought that most new builds particularly on the fringes are FHBs. On the other hand, apartment blocks in the cities would have a large percentage of investors. As far as rental assistance goes, those receiving it are on welfare and not really in a position to buy a home.
I would have thought that most new builds particularly on the fringes are FHBs. On the other hand, apartment blocks in the cities would have a large percentage of investors. As far as rental assistance goes, those receiving it are on welfare and not really in a position to buy a home.
There are plenty of people who get rental assistance who are buying a home. True they buy homes at the lower end, but they are buying and accepting that the rental assistance will cease when they buy.
Any expressed market opinion is my own and is not to be taken as financial advice
That may be the case everywhere else, but in Perth, I believe it will have a big impact. A lot of mining related high wage earners have dived into investment property due to the "free money" they get from the government via NG. It has been spruiked to hell and back over here and I have lost count of the number of fuckwits that have told me to buy an investment property to reduce my tax bill.
That is my whole reason for being bearish on Perth property. It is full of amateur (dumb) money. You only have to look at the number of suckers who bought Jims franchises to see that WA is full of fools and their money.
Yeah. I can understand you might be a little bitter when those dumb fuckwits did well by doing what you didn't.
The truth will set you free. But first, it will piss you off. --Gloria Steinem AREPS™
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