"GetUp's deputy national director Sam McLean says the organisation does not currently have any plans to campaign for the buyers' strike or against negative gearing."
“Mr Collyer says two average incomes, even with significant savings for a deposit, are no longer enough to secure many prospective home buyers a property, even on the urban fringe”
At page 13, Full time adult total earning for Male & Female is $1415 pw & $1174 pw. Combined after tax income per month – Tax Year July2010-June2011 (with $0 deduction & $0 Rebate), will be around $4738 + $4022 = $8760 per month. Mortgage stress : if more than 30% spent on mortgage, ie : $2628 per month. $2628 pm can pay P&I for mortgage amount of $390k for 30years with interest rate of 7.14% (CBA 2 year fixed). With significant saving for a deposit (20%), this household will be able to buy house with max $487k . With 10% deposit , they can afford house with max $433k. With price tag between $433k to $487k, this FHB couple definitely can afford house in Sydney. Searching on realestate.com.au for property (house, unit, townhouse, etc, with 2+ bed room) price under $500k in NSW gives about 46177 result.
“Mr Collyer says two average incomes, even with significant savings for a deposit, are no longer enough to secure many prospective home buyers a property, even on the urban fringe”
At page 13, Full time adult total earning for Male & Female is $1415 pw & $1174 pw. Combined after tax income per month – Tax Year July2010-June2011 (with $0 deduction & $0 Rebate), will be around $4738 + $4022 = $8760 per month. Mortgage stress : if more than 30% spent on mortgage, ie : $2628 per month. $2628 pm can pay P&I for mortgage amount of $390k for 30years with interest rate of 7.14% (CBA 2 year fixed). With significant saving for a deposit (20%), this household will be able to buy house with max $487k . With 10% deposit , they can afford house with max $433k. With price tag between $433k to $487k, this FHB couple definitely can afford house in Sydney. Searching on realestate.com.au for property (house, unit, townhouse, etc, with 2+ bed room) price under $500k in NSW gives about 46177 result.
This statement is wrong.
Good first post. Also personally I question the 30% mortgage stress level, particularly with a youngish couple whose earning capacity is increasing. I believe you can exceed this a bit initially and let inflation sort you out, ie, the first few years may be somewhat tough but this has always been the case for fhbers.
“You Keep Using That Word, I Do Not Think It Means What You Think It Means” - Inigo Montoya
“Mr Collyer says two average incomes, even with significant savings for a deposit, are no longer enough to secure many prospective home buyers a property, even on the urban fringe”
At page 13, Full time adult total earning for Male & Female is $1415 pw & $1174 pw. Combined after tax income per month – Tax Year July2010-June2011 (with $0 deduction & $0 Rebate), will be around $4738 + $4022 = $8760 per month. Mortgage stress : if more than 30% spent on mortgage, ie : $2628 per month. $2628 pm can pay P&I for mortgage amount of $390k for 30years with interest rate of 7.14% (CBA 2 year fixed). With significant saving for a deposit (20%), this household will be able to buy house with max $487k . With 10% deposit , they can afford house with max $433k. With price tag between $433k to $487k, this FHB couple definitely can afford house in Sydney. Searching on realestate.com.au for property (house, unit, townhouse, etc, with 2+ bed room) price under $500k in NSW gives about 46177 result.
This statement is wrong.
It might be worth noting, that most families do not have 2 x full time workers..
What makes you think that -ve gearing will (or should) be removed for new constructions ? I feel that it would be unwise to do that.
Why should they get special treatment and what makes you think that investors who are currently owning NG property would sell up and invest in the construction of new properties if the NG was to be removed ? Anyway, since existing IP owners would be excluded and only new (future) constructions would be entitled to NG the end result would be the same.
Quote:
I agree that new builds should be given a grace period of -ve gearing so that construction rather than speculation is where investment is directed.
What would be the incentive to construct when this will only increase the available stock and therefore reduce the prospect of any CG ? The government and charity institutions may be able to afford to build a new home and rent at a loss without expectations of major capital gains but can't expect private investors to do the same.
Quote:
-ve gearing on already built stock that is 10, 20 30, or even 100 years old has no right to be given the same incentive for Investors as a new build.
they are not, the incentive is already there in greater depreciation for new builds.
:laugh: Well it didn't have to be in the metro area but please do not send me to BH :wacko:
Why, you're too good to live there ? :lol:
Quote:
It's cheap though, any decent jobs there?
There are decent jobs most everywhere if you look hard enough and BH is no exception. You would probably have difficulty landing a job there if you reside in Sydney or Brisbane so it may be a good idea to move there first even if in a rental and get the job first, although at that prices you could afford to buy a house while on the dole and get the job later. :laughing:
Why should they get special treatment and what makes you think that investors who are currently owning NG property would sell up and invest in the construction of new properties if the NG was to be removed ? Anyway, since existing IP owners would be excluded and only new (future) constructions would be entitled to NG the end result would be the same.
What would be the incentive to construct when this will only increase the available stock and therefore reduce the prospect of any CG ? The government and charity institutions may be able to afford to build a new home and rent at a loss without expectations of major capital gains but can't expect private investors to do the same.
they are not, the incentive is already there in greater depreciation for new builds.
good questions York.
I'll answer in Red. between quotes/questions to keep it readable..
Rastus2 1 Apr 2011, 10:38 PM
What makes you think that -ve gearing will (or should) be removed for new constructions ? I feel that it would be unwise to do that.
York: Why should they get special treatment and what makes you think that investors who are currently owning NG property would sell up and invest in the construction of new properties if the NG was to be removed ? Anyway, since existing IP owners would be excluded and only new (future) constructions would be entitled to NG the end result would be the same.
Because we have a shortage of housing, so new builds need to be encouraged. That can be either by reducing the cost, or increasing the incentive of Investors for new builds relative to old stock.
Quote:
I agree that new builds should be given a grace period of -ve gearing so that construction rather than speculation is where investment is directed.
York: What would be the incentive to construct when this will only increase the available stock and therefore reduce the prospect of any CG ? The government and charity institutions may be able to afford to build a new home and rent at a loss without expectations of major capital gains but can't expect private investors to do the same.
Ahh... you hit the nail on the head without intending to.
You are implying that the incentive for new builds now is not high because an old property at least keeps the stock levels the same.. The idea is to make new builds more attractive than old builds to someone who is about to invest... that way it's win:win ... investor gets a better deal building than buying old, and gov. gets more stock available to help with shortage.
I understand what you say about cost of new builds... but ask yourself one question... how is it that other countries manage to do this without the overly generous -ve gearing situation that we find in Australia ? Let me repeat, this does not need to be a 100% repeal of -ve gearing for IP's... there is middle ground to learn from other countries and model an even better system here.
Quote:
-ve gearing on already built stock that is 10, 20 30, or even 100 years old has no right to be given the same incentive for Investors as a new build.
York: they are not, the incentive is already there in greater depreciation for new builds.
Good point... depreciation is indeed generous for new builds... and yet, we have not had a massive building period... why is that ?
Some would say it's not generous enough... I disagree.. I think the problem is that the option to simply buy old stock and speculate on price rises is too generous so why go the new build option.
The FHB Strike campaign is "under review' but the campaign "Protecting funding for Medical Research in Australia" suddendly shot well ahead of it on votes and I'm fairly convinced this is a dishonest manipulation of votes by Get Up to get the heat off the FHB strike campaign because they've been pressured by federal govt to bury the campaign asap.
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