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Malcolm Turnbull's new plan to help first home buyers use superannuation to buy property; Home price growth would become predictable rather than scary
Topic Started: 1 Dec 2016, 11:42 AM (2,600 Views)
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Malcolm Turnbull's big chance to be the new Menzies and help first home buyers

Peter Martin

Within the Coalition's housing work group Alexander has been tossing around an extraordinary scheme derived from the hearings that has the potential to guarantee it the next election.

It's in three parts: The first would require APRA to continually adjust the rules governing how easily banks could lend to investors, each month; just as the Reserve Bank adjusts interest rates each month. But rather than targeting consumer price inflation as the Reserve Bank does, APRA would target house price inflation. Too much – perhaps more than doubling every 10 years – and it would make it harder to lend to investors, too little and it would be more generous. Home price growth would become predictable rather than scary.

The second part would be to advantage genuine buyers. Right now they are required to pump 9.5 per cent of their wages into superannuation. Instead they could allocate that 9.5 per cent to pay off the principal (but not the interest) on home loans, meaning they probably wouldn't need deposits and could start buying early. The usual criticism of any measure that advantages first or genuine homebuyers is that it would push up prices leaving them no better off. But this wouldn't, because of the role of APRA in restraining loans to investors to restrain price rises. It would just tilt the market back towards owner-occupiers.

The super funds would be upset, especially the union-dominated default funds, but they are not the Coalition's concern. The money put into owner-occupied housing instead of super would buy those who chose to do it more security than could super. Which brings us to part three.

Because part of the homes would be owned as "superannuation", that part would count toward the pension means test, keeping a lid on the cost of the pension. And because steadily increasing home prices would be as good as guaranteed, those increases could be borrowed against to fund fortnightly payments in retirement. For someone who bought a house at 25 and then retired at 65, the payments would be big.

It's a genuinely innovative idea, and it needs a lot more discussion. But if Turnbull could pull it off, or something like it, he would stand a chance of becoming the greatest Australian prime minister since Menzies. That's why he is listening.

Read more: http://www.canberratimes.com.au/comment/alexanders-excellent-idea-how-to-wind-back-negative-gearing-and-give-us-houses-20161130-gt0o0d.html
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Simon_S
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I wonder what that will do to all the Long Only Equity investors when people sell out their Stock market Invested Super to buy property.......

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herbie
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Admin
1 Dec 2016, 11:42 AM
"steadily increasing home prices would be as good as guaranteed"
Hmmm - On tha surface at least, that doesn't sound like it's especially great news if one's a housing bear?
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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Foxy
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Zero is coming...

Beautiful, squeeze that lemon for all its worth...

The depth of their thinking is astonishing...

Use their hard saved money to price other peoples children out of a non yielding asset.

Oh the brilliance of the sheep..

http://www.afr.com/content/dam/images/g/n/2/1/u/8/image.imgtype.afrArticleInline.620x0.png/1456285515560.png
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herbie
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Yep, if a man's right inta non-yielding assets he should just stop f***in' around 'n go 'n buy gold I reckon.
Edited by herbie, 1 Dec 2016, 12:15 PM.
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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Ex BP Golly
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herbie
1 Dec 2016, 11:50 AM
Hmmm - On tha surface at least, that doesn't sound like it's especially great news if one's a housing bear?
It's not good news at all. Even our esteemed leader is betting all his chips on housing.

You know, we've just got to protect those tulip fields Bernie.
WHAT WOULD EDDIE DO? MAAAATE!
Share a cot with Milton?
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Sydneyite
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Simon_S
1 Dec 2016, 11:44 AM
I wonder what that will do to all the Long Only Equity investors when people sell out their Stock market Invested Super to buy property.......
For a start, there would be no mass selling, just less future buying. The proposal is NOT to allow you to use your existing super to pay off your mortgage or buy a house with. It would allow future SG contributions to be used to pay off a standing mortgage instead of going into a super fund (which only invests a portion of funds in shares anyway). Also only a small proportion of the "super" market would be doing this - ie the approximately 1/3 or so of households that have a mortgage to pay off. I doubt the equity market as a whole would even notice any of this happening.

Secondly, even if there was selling and share prices fell - would the income / earnings / dividends fall? Nope. So no impact to someone focusing on the future income stream of their investment portfolio - plus opportunity to buy more long term income stream at a cheaper price - bonus! Of course in reality as more value emerged, o/s capital would flood in and take up any slack anyway - cheap markets do not stay cheap in a globalised world.

And thirdly, given that most proper long term equity market investors also own property, they would also benefit from the positive impact such a policy would have on the housing asset holdings as well.

Edited by Sydneyite, 1 Dec 2016, 01:02 PM.
For Aussie property bears, "denial", is not just a long river in North Africa.....
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Simon_S
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Sydneyite
1 Dec 2016, 12:58 PM
For a start, there would be no mass selling, just less future buying. The proposal is NOT to allow you to use your existing super to pay off your mortgage or buy a house with. It would allow future SG contributions to be used to pay off a standing mortgage instead of going into a super fund (which only invests a portion of funds in shares anyway). Also only a small proportion of the "super" market would be doing this - ie the approximately 1/3 or so of households that have a mortgage to pay off. I doubt the equity market as a whole would even notice any of this happening.

Secondly, even if there was selling and share prices fell - would the income / earnings / dividends fall? Nope. So no impact to someone focusing on the future income stream of their investment portfolio - plus opportunity to by more long term income stream at a cheaper price - bonus! Of course in reality as more value emerged, o/s capital would flood in and take up any slack anyway - cheap markets do not stay cheap in a globalised world.

And thirdly, given that most proper long term equity market investors also own property, they would also benefit from the positive impact such a policy would have on the housing asset holdings as well.
LOL......So the market will continue to go no where.......

So from a Low Yield(Stocks) to even Lower Yield (Property)


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Trollie
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Simon_S
1 Dec 2016, 01:05 PM
So the market will continue to go no where
Make up your mind dumby, is it a bubble or has it gone no where? :re:
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Simon_S
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Trollie
1 Dec 2016, 02:19 PM
Make up your mind dumby, is it a bubble or has it gone no where? :re:
Maybe if you had a brain and actually read the post you would figure it was about the Stock market but since you're Retarded I'll spell it out for ya...



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