Your anti psychotic medication obviously not serving its purpose!
Over 90% of NG properties are established properties, with billions wasted on it and homelessness growing every year! Not to mention the huge bubble it's created! It's Australia's biggest policy failure! Well you've mistaken people for idiots and ended up looking like one yourself
Your best yet Timo.
The truth will set you free. But first, it will piss you off. --Gloria Steinem AREPS™
Your anti psychotic medication obviously not serving its purpose!
Over 90% of NG properties are established properties, with billions wasted on it and homelessness growing every year! Not to mention the huge bubble it's created! It's Australia's biggest policy failure! Well you've mistaken people for idiots and ended up looking like one yourself
Apart from the fact that it is probably the biggest single driver of investment buying (amongst everyone I know anyway).
There is no 'investment' buying. purely speculative.
Speculation that they can somehow continue to pump this ponzi further in future as it detaches even further from any economic fundamentals. Just as the debt ponzi was pumped to the point of exhaustion in overseas markets hence the GFC still going six years on. Pumped to the point even artificial measures are now incapable of working, let alone any real economic measures or fundamentals, from which it has absolutely no hope, EVER.
The geniusus who created and developed the whole western economic ponzi scheme have long gone, they have bennefitted and many may have passed away by now. They knew by the time the shit hits the fan , they will be lone gone, leaving somebody else to hold the ticking time bomb that started smoking in 2008.
This is how a ponzi works, the early ones benefit, the later ones get burnt.
ok - so if an investor borrows $500K to buy an IP for $500K he might expect a rental return of $25K per annum with an interest cost of $25K
So if he borrowed twice as much he might buy two houses for $500K - IE $1M He might then expect a rental return of $50K and an interest cost of $50K
So we doubled the outlay, doubled the interest cost, and doubled the return.
I fail to see your argument, can you tell me what I have done wrong please?
You are going wrong by cherry picking numbers to suit your argument.. 500k will not get you much in sydney, however 500 bucks a week rent will get you a 750+k (what bank will lend someone, not what someone would pay if they actually had to work for the 750k) property if you look around..
Please do your same evaluation on, let's say "Bondi" and tell me negative gearing isn't forcing prices up.
If they get rid of it, the best thing for society would be to get rid of it properly and not even entertain the idea of grandfathering for existing investors.
You should rent out the huge vacant space in your head to make it
After a bubble has burst, no one denies that it existed. But before it does, the popular refrain is that though bubbles existed elsewhere in the world, “there’s no bubble here”. So housing bubbles are admitted to have existed in Japan, the USA, Spain and Ireland – because they’ve already burst.
You are going wrong by cherry picking numbers to suit your argument.. 500k will not get you much in sydney, however 500 bucks a week rent will get you a 750+k (what bank will lend someone, not what someone would pay if they actually had to work for the 750k) property if you look around..
Please do your same evaluation on, let's say "Bondi" and tell me negative gearing isn't forcing prices up.
If they get rid of it, the best thing for society would be to get rid of it properly and not even entertain the idea of grandfathering for existing investors.
There is no way that they will get rid of it without grandfathering. Firstly, it is unfair on investors who have purchased recently and secondly it will be too disruptive to both the house and rental markets. Grandfathering will result in a drop off in demand by new investors and some price falls. Recent investors will be reluctant to sell because they are still NGing. There might be a small rush to the exits by positively geared investors who want to get out before price falls but that wouldn't be significant. There would be no pressure on rents because there would be no change to the circumstances of existing investors.
You are going wrong by cherry picking numbers to suit your argument.. 500k will not get you much in sydney, however 500 bucks a week rent will get you a 750+k (what bank will lend someone, not what someone would pay if they actually had to work for the 750k) property if you look around..
Please do your same evaluation on, let's say "Bondi" and tell me negative gearing isn't forcing prices up.
If they get rid of it, the best thing for society would be to get rid of it properly and not even entertain the idea of grandfathering for existing investors.
My example holds up pretty well for an investment house in Brisbane. Sydney believe it or not is not the world.
I love the way that you accuse me of cherry picking and then you do exactly that.
Here are aggregate tax figures for individuals who own investment property from the ATO for the 2011/12 financial year.
If you bother to have a look at these figures you will find that on aggregate IP's earn $9B more from rentals than they pay out in interest.
Overall they still have a loss of $4B but if you add back depreciation and capital costs which are once off costs, the asset class is neutral. Now if you factor in the fall in interest rates from around 7% to around 5%. That is an interest cost reduction of 28% of about $6.7B
I think that the 2013 ATO statistics will be very interesting.
Any expressed market opinion is my own and is not to be taken as financial advice
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