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Get Up! End Negative Gearing & Property Buyer / First Home Buyer FHB Strike; 40,000 First Home Buyers On Strike - David Collyer
Topic Started: 16 Mar 2011, 08:59 AM (25,086 Views)
lierlier
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b_b
16 Mar 2011, 10:41 AM
House prices will continue to reflect the cost of production (and relative cost of production). Whether investors get a tax break or not on interest will not alter how much ot costs to buy bricks and tiles.
If your b_besyian economic theory is true, we should never have loss-making companies ever again - because the market price of a product the company makes will always be equal or greater than the cost of production. :excited:
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earthsta
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Frank Castle
16 Mar 2011, 12:50 PM

You really do seem angry earthsta
Angry? Are you kidding? Life's sweet pal :beer:

At least I'm not across the river from where Brisbanes sewerage is discharged or downwind of the oil refinery :laughing: :laughing: :laughing:
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catnap
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b_b
16 Mar 2011, 10:41 AM
What the removal of NG will do will is lift rents relative to house prices - since investors assess return on an after tax basis, net rents will need to rise more than normal before new supply is encouraged.
If landlords could just lift their rents then why not do it now with such low rental yields?

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Deleted User
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NG is a subsidy to renters

Too funny.......+1 for the day.
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matthew_50
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"NG is a subsidy to renters"

it is... but on that front, it is still doing more harm than good.

and I think investors will feel it.... how much of their interest on all of their 100% loans do they save through NG? 20%? 30%?

I think they will feel that...

Edit:

as for the other one...

in fairness... people shouldn't have to be told to 'boycott'... they just will... if there is really a bubble, people will just sit back, think about it rationally, and not buy...

telling people to boycott is just as bad as the government telling people to buy (through stimulus)

in the end, you can't hold back the natural market forces forever.

all we can hope is that the young aren't brainwashed or foolish enough to think like everyone else that:

"property is the be all and end all. you are a second class citizen if you don't buy. you win at life if you do! having mammoth debt in a car loan makes you financially irresponsible, having mammoth debt in housing makes you a poor and noble Aussie battler. housing is a sure fire investment that is the best and only way to set yourself up for the future. shares are too risky, 100% geared housing all the way!"

if they have a petition to make randomly and baselessly spouting these catch cries illegal, I'll sign that.
Edited by matthew_50, 16 Mar 2011, 06:32 PM.
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Rastus2
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b_b
16 Mar 2011, 10:41 AM
The removal of NG will do nothing to house prices over the medium term.

House prices will continue to reflect the cost of production (and relative cost of production). Whether investors get a tax break or not on interest will not alter how much ot costs to buy bricks and tiles.

What the removal of NG will do will is lift rents relative to house prices - since investors assess return on an after tax basis, net rents will need to rise more than normal before new supply is encouraged.

As usual the bears have it arse-about. NG is a subsidy to renters. Investors will be indifferent to its removal, but it is a boon for OO's, and the poor will get poorer.



Quote:
 

As usual the bears have it arse-about. NG is a subsidy to renters. Investors will be indifferent to its removal, but it is a boon for OO's, and the poor will get poorer.


This is the most stupid argument that some bulls keep clinging to..

Lets think about that claim for just 60 seconds (because that is all the time it would take an unbiased person to digest how foolish it is).


By our own claims I assume you would have to also agree that -ve gearing is a subsidy to the customers of a small business ? or a subsidy to the large company that sells it's shares to investors ?


Seriously... -ve gearing is all about meant to be about encouraging investment... pure and simple... if it encourages speculation then it is not achieving it's purported purpose and, in fact, has simply encouraged an artificial rise in asset price which must be then passed on to the cost base to keep yield at a level that makes the asset a good investment.


Before you protest that it is not correct...
Can you please explain how other countries manage to have affordable housing without -ve gearing ? This certainly tells me that it is possible... just not desirable unless your primary goal is to encourage speculation... thus price rises, thus higher -ve amounts of subsidy to the owners of the overinflated asset who paid too much.. thus speculation etc.



Shadow - Defrauded his Bank ? 2015 I have 9 different loans and my bank had no idea which ones were personal and which were investment. They had half of them classed incorrectly. When this change came in they asked me to tell them if any personal loans were incorrectly classed as investment, which I did, and they switched them to personal for the lower rate. They also had a couple of investment loans incorrectly classed as personal. They didn't ask me about those. So they stay on the lower rate too. Worked out pretty well. :)
Shadow - 2008 Sydney Median House Price 1.25M by 2014-2015

Shadow : I think this boom has already begun in several cities. My prediction :
Peak of boom: 2014-2015. Sydney Median Price: $1,250,000 Bottom of bust: 2017-2018. Sydney Median Price: $1,100,000

Shadow's Original 2010 House Boom and Crash prediction http://s836.photobucket.com/user/rastus22/media/shady-orig-2010-chart.png.html?sort=3&o=0

Shadow's attempt to edit his 2010 chart in 2015 and replace it with one that does not show a crash in 2013 http://s836.photobucket.com/user/rastus22/media/Screen%20Shot%202015-06-06%20at%207.12.52%20pm_1.png.html
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Nelson
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Rastus2
16 Mar 2011, 06:27 PM
Can you please explain how other countries manage to have affordable housing without -ve gearing ?


Which countries are those?

Posted Image

NO neg gearing IN THE UK!

Plenty affordable housing for renters in the UK!

Posted Image

18% PUBLIC SLUM HOUSING!!!!!!!!!!!!!
Edited by Nelson, 16 Mar 2011, 07:37 PM.
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Rastus2
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Nelson
16 Mar 2011, 07:35 PM
Which countries are those?

Posted Image

NO neg gearing IN THE UK!

Plenty affordable housing for renters in the UK!

Posted Image

18% PUBLIC SLUM HOUSING!!!!!!!!!!!!!


oh good.. you want to contribute with a picture.

Care to give us a link where the original can be found ?
Shadow - Defrauded his Bank ? 2015 I have 9 different loans and my bank had no idea which ones were personal and which were investment. They had half of them classed incorrectly. When this change came in they asked me to tell them if any personal loans were incorrectly classed as investment, which I did, and they switched them to personal for the lower rate. They also had a couple of investment loans incorrectly classed as personal. They didn't ask me about those. So they stay on the lower rate too. Worked out pretty well. :)
Shadow - 2008 Sydney Median House Price 1.25M by 2014-2015

Shadow : I think this boom has already begun in several cities. My prediction :
Peak of boom: 2014-2015. Sydney Median Price: $1,250,000 Bottom of bust: 2017-2018. Sydney Median Price: $1,100,000

Shadow's Original 2010 House Boom and Crash prediction http://s836.photobucket.com/user/rastus22/media/shady-orig-2010-chart.png.html?sort=3&o=0

Shadow's attempt to edit his 2010 chart in 2015 and replace it with one that does not show a crash in 2013 http://s836.photobucket.com/user/rastus22/media/Screen%20Shot%202015-06-06%20at%207.12.52%20pm_1.png.html
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Nelson
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Rastus2
16 Mar 2011, 07:52 PM


oh good.. you want to contribute with a picture.

Care to give us a link where the original can be found ?
http://www.rba.gov.au/publications/bulletin/2001/dec/pdf/bu-1201-1.pdf

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Rastus2
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Nelson
16 Mar 2011, 07:59 PM


great to have you contributing in a more constructive manner, even if it is at my expense.

Now.


Do you know

1 - that the report is some 9 years old ? December 2001, and cites sources that is older than that (as old as 1984, that is some 16 years )

2 - If the status in all of those countries is still the same for -ve gearing ?

And, finally...

Do you know if all of the countries listed have the same generous -ve gearing allowances that we do here in Australia ?

eg. What is the limit of how much you can claim in Australia ? There is no limit, it goes against the full amount of your taxable income so if you have 300k interest per year and you are on 300k , you get 0 taxable income.
eg. Is there any time limit for how long you can -ve gear after the purchase or how long since construction ?
Are you able to prove that it is equally generous in the countries in your table ?





To quote another story (already posted here ?)

Story

Now, what makes negative gearing so special, is that it is solely available to asset investments such as property and shares and excludes business investments. So, if I make a loss on my investment property I get a good tax break on my wage.

But, if I make loss trying to set up my mechanic shop or dental surgery while I am still working for somebody else– well, tough luck bucko.

So, in this way we encourage speculation on property rather than entrepreneurialism.


Shadow - Defrauded his Bank ? 2015 I have 9 different loans and my bank had no idea which ones were personal and which were investment. They had half of them classed incorrectly. When this change came in they asked me to tell them if any personal loans were incorrectly classed as investment, which I did, and they switched them to personal for the lower rate. They also had a couple of investment loans incorrectly classed as personal. They didn't ask me about those. So they stay on the lower rate too. Worked out pretty well. :)
Shadow - 2008 Sydney Median House Price 1.25M by 2014-2015

Shadow : I think this boom has already begun in several cities. My prediction :
Peak of boom: 2014-2015. Sydney Median Price: $1,250,000 Bottom of bust: 2017-2018. Sydney Median Price: $1,100,000

Shadow's Original 2010 House Boom and Crash prediction http://s836.photobucket.com/user/rastus22/media/shady-orig-2010-chart.png.html?sort=3&o=0

Shadow's attempt to edit his 2010 chart in 2015 and replace it with one that does not show a crash in 2013 http://s836.photobucket.com/user/rastus22/media/Screen%20Shot%202015-06-06%20at%207.12.52%20pm_1.png.html
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