Welcome Guest [Log In] [Register]


Reply
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 (25,084 Views)
Toast
Default APF Avatar

You rich crash wishers just want negative gearing to be abolished so you can selfishly and more cheaply join the rich land owning class. You don't care a fig about the interests of those who will always have to rent. I've written about this before on this forum but you all, apart from Sunder, pretended not to see my posts. Here's another chance for you to acknowledge the real worthy purpose of negative gearing. It's done as a way of helping renters - not aspiring land owners like you lot with hundreds of thousands of dollars in the bank.

http://australianpropertyforum.com/single/?p=8109129&t=8488551

Quote:
 
It isn't socialism to want renters to become property owning capitalist pigs. That seems to be what many of you here want. That isn't socialist at all. I support the interests of the poorer people in our society - that's the renters, well most of them, not those on here who have a million dollars in the bank waiting to pounce on someone being repossessed by the evil banks. Most renters have no prospects of owning their own home. You renters here forget about the real renters who will be stuck renting for life with or without a house price crash. There are even more people renting now in the US than before the crash.
The lower the rent for the renters the better it is. The best thing would be if the negative gearing money was given directly to the renters. But if you just scrap negative gearing on its own it can't help renters at all. You lot are just looking to become owners and join the ruling class. With no tax refunds the rent house owners can't possibly charge less rent, they are much more likely to charge more. And since there's about a million of them we can expect them to all act in unison and put the rent up. How will that help people who are renting? And don't talk to me about how it might make easier for them to buy a house - most of them don't have anything like a deposit and will never be able to get one. How can single mums and other people with bad luck on benefit save for a deposit? They're the people I care for - not the rich with big bank accounts who talk on here about investment in shares and stuff.
And "Pauk" - don't speak to me about "levels of desperation". None of you here know the meaning of the word. You're all rich speculators either wanting to make money out of prices rising or out of prices falling. You come on here speaking of affordability in one breath and boast about your wealth in the next.

http://australianpropertyforum.com/single/?p=8109084&t=8488551
Quote:
 

Me and my hubby are both socialists and we support negative gearing as it helps, indirectly, those who can't afford to buy a house and have to rent.
Negative gearing acts as an incentive for property investors to rent out their dwellings and not leave them empty. If they leave them empty they cannot claim any of their expenses like interest payments against their tax. If they rent the dwellings they can claim all their expenses against their other income with negative gearing. If negative gearing is removed then they'll have less incentive to rent them out. Some people would even stop renting their places out if negative gearing were banned. As a true socialist I support negative gearing in the interests of the down trodden renters. I'm sure a Labor party would never dream of going against the interests of renters. The nasty Liberals might.
Profile "REPLY WITH QUOTE" Go to top
 
b_b
Default APF Avatar


catnap
17 Mar 2011, 12:23 PM
b_b
17 Mar 2011, 09:22 AM
Landlords (if rational) will always maximise rent at any point in time.

The issue here is if the after tax return in existing stock falls (as will be tax case with the remaoval of NG), the marginal investor will no longer buy. More-over, many current investors will almost certainly sell.

This may all sound like great news to the bears...except for one thing....supply will stop.

Lack of supply will ensure rents will rise.....to the point where the after tax return for investors is restored.The lag effect between policy, building approvals, building completions, apopulation growth and rents is more than just a couple of years. It probably takes -7-10 years to flow through to the entire market. This is why earthsa is so confused.
Or lower investor interest/sell offs will lead to lower house prices so those currently renting who wish to buy are in a better position to do so. Positively geared landlords would have no reason to sell. The system is set up in favour of investors, currently they have this great tax break to allow them to bid up prices pushing potential buyers out. Some rent for personal reasons, for a lot it's financial, to buy the equivalent property would just not be possible.
I accept the short term impact on pricing would be negative.

However the fact remains....if the after tax return falls due to the abolishion of NG, then this needs to be compensated by higher cash yields. This can ONLY happen one of three ways,
1. Permanent on off fall in house prices
2. Much higher rents
3. Combination of 1 and 2.

Scenario 1 and 3 can not happen because house prices are barely high enough to deliver adequate returns to residential builders and developers.

So the clear outcome is higher rents. So I re-state - NG is a subsidy to renters. It's abolishion will improve government revenue at the expense of the poor.
(S – I) + (T - G) + (M - X) = 0
Profile "REPLY WITH QUOTE" Go to top
 
b_b
Default APF Avatar


lierlier
17 Mar 2011, 01:55 PM
I was merely pointing out that the market price can go below the cost of production, even for housing.
Of course it can. But not sustainably.
(S – I) + (T - G) + (M - X) = 0
Profile "REPLY WITH QUOTE" Go to top
 
b_b
Default APF Avatar


Toast
17 Mar 2011, 02:28 PM
You rich crash wishers just want negative gearing to be abolished so you can selfishly and more cheaply join the rich land owning class. You don't care a fig about the interests of those who will always have to rent. I've written about this before on this forum but you all, apart from Sunder, pretended not to see my posts. Here's another chance for you to acknowledge the real worthy purpose of negative gearing. It's done as a way of helping renters - not aspiring land owners like you lot with hundreds of thousands of dollars in the bank.

http://australianpropertyforum.com/single/?p=8109129&t=8488551



http://australianpropertyforum.com/single/?p=8109084&t=8488551

Good post

NG already helps the poor. It subsidises rent so that the land lord can get an adequate retun on capital with only a 3% yield on asset value.

If NG was abilished, the investors would withdraw capital from the market. Supply will become even more constrained and rents would have to rise before investors are enticed back to the market and encourage new supply.

However, your idea of taking the "benefits" of abolishing NG and handing it out to the poor acheives the same economic outcome - except for the inevitable governement mis-managment and waste.
Edited by b_b, 17 Mar 2011, 03:01 PM.
(S – I) + (T - G) + (M - X) = 0
Profile "REPLY WITH QUOTE" Go to top
 
funny_man
Default APF Avatar

b_b
17 Mar 2011, 02:41 PM

Good post

NG already helps the poor. It subsidises rent so that the land lord can get an adequate retun on capital with only a 3% yield on asset value.

If NG was abilished, the investors would withdraw capital from the market. Supply will become even more constrained and rents would have to rise before investors are enticed back to the market and encourage new supply.

However, your idea of taking the "benefits" of abolishing NG and handing it out to the poor acheives the same economic outcome - except for the inevitable governement mis-managment and waste.
or...

remove -ve gearing
some, not all investors bail out, remove their capital
house prices go down
cheaper for owners
cheaper for investors also

The number of investment properties would be reduced (as richer renters would likely become home owners)
However, as above, number of renters will also reduce.
as purchase price to investors is lower, they would require lower yield
hence rents would decrease.
yield would be a higher percentage than now, so there is an incentive for people to still invest in IPs.


What it does is get rid of the speculators, tax dodgers, highly leveraged high income earners etc, who rely only on capital growth as their return.

Supply would improve as land prices would be cheaper and govt can reduce their income from developers as they are no longer handing out massive funds from NG.



Profile "REPLY WITH QUOTE" Go to top
 
b_b
Default APF Avatar


remove -ve gearing
some, not all investors bail out, remove their capital - Agree, but this only happens in the short term (5 years)
house prices go down - Agree, but only in the short term
cheaper for owners - ditto
cheaper for investors also - ditto

The number of investment properties would be reduced (as richer renters would likely become home owners)
The number of property relative to demand will reduce - because prices will fall below the cost to build. No-one really likes building for a loss (despite the wish to the bears). This creates an imbalance in the rental market, and rents rise

However, as above, number of renters will also reduce.
The total number of people need a roof over their head remains the same. It does not matter whether they are renters or woners. the supply of stock will fall short of the need, and prices will bouce back, and rents just keep risingas purchase price to i

investors is lower, they would require lower yield
Investors will only come back into the market when the after tax returns is eual or greater than what is was under NG. That means rents relative to price (yield) has to be higher

hence rents would decrease.
Hence rents rise

yield would be a higher percentage than now, so there is an incentive for people to still invest in IPs.
Agree

What it does is get rid of the speculators, tax dodgers, highly leveraged high income earners etc, who rely only on capital growth as their return.
The market needs specualtors - since they push up prices and encourage supply. this is important since housing is a social good.

Supply would improve as land prices would be cheaper and govt can reduce their income from developers as they are no longer handing out massive funds from NG.
Supply will be low in the short run - but improve once rents increase enough to offset the loss of NG.
(S – I) + (T - G) + (M - X) = 0
Profile "REPLY WITH QUOTE" Go to top
 
earthsta
Default APF Avatar


b_b
17 Mar 2011, 10:49 AM
earthsta
17 Mar 2011, 10:48 AM
b_b
17 Mar 2011, 09:00 AM
earthsta
16 Mar 2011, 10:54 AM
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.
Bullshit

When negative gearing was briefly removed by Keating back in the 80's ONLY Sydney and Perth had rising rents. Rents throughout the rest of Australia stayed static or fell

Another bullshit myth by a vested interest
What...? you are going to look a just a couple of years of evidence after a major tax chnage like that?

If you read my comment you will note that the change in rents would take years (medium term) to adjust after the renter subsidy (NG) is removed. The removal of NG under Keating was too short to show anything.

The fact of the matter is, Bears acknolwedge the after tax effect of property investing is important, which is why they rave on about NG. But when it become clear the after tax effect of removing NG will lift rents, they all claim it must be bullshit.

As usual, bears are inconsistent.
So in other words, you have zero evidence on which to base your assertions

Thanks
Nor do you.

Your welcome.

Edit: However, unlike you I have sound economic reasoning on my side.
Ah, but I do, fuckwit

Quote:
 

However, Saul Eslake, ANZ's chief economist, has gone back to check this story and can't find it.

His examination of the Real Estate Institute of Australia (REIA) figures for the capital cities shows that rents rose sharply only in Sydney and Perth (and the Bureau of Statistics' figures for dwelling rent don't show a marked increase for any capital).

If the tax change was causing trouble, you'd expect it to be showing up in all cities, not just one or two.

Mr Eslake's conclusion is that rents in Sydney and Perth surged because their rental markets were unusually tight for reasons that had little to do with the tax change.


The rest is here.
Profile "REPLY WITH QUOTE" Go to top
 
b_b
Default APF Avatar


No you don't.

Instead, for some obscure reason, you have decided to blindly beleive someone elses opinion (eastlake's)..which you rehashed earlier in this thread.

2 years would be no-where near enough time for markets to adjust for the pipeline of approvals and supply, which would take several years to ipmact national supply and ultimately rents.

Try to come up with your own views..instead of relying on others....



Edited by b_b, 17 Mar 2011, 05:10 PM.
(S – I) + (T - G) + (M - X) = 0
Profile "REPLY WITH QUOTE" Go to top
 
matthew_50
Default APF Avatar


@b_b

ok, so high prices are unavoidable, because thats how much it costs to build a house, is it?

and there is no possible way these costs could come down?


and yet, tradies are now paid like twice as much as doctors.... people with a year of tafe vs people with 10 years of top percentile performance at the highest level of academics...


it ISN'T just unavoidable price rises in supply, that is BS, it is just as likely that developers, contractors, suppliers, and the gov, all set prices THEY COULD GET AWAY WITH. just like every greedy capitalist... well, they can't get away with it any more... so guess what, if your salary booms with a boom, it can bust with a bust, too!

I refuse to believe that the genuine, unavoidable cost of building a house has rocketed as fast as house prices have.

new technology and processes should have lead to REDUCTIONS in the costs of building... not increases... at most the costs should have risen about the rate of inflation...
is there a wood shortage or something?
Profile "REPLY WITH QUOTE" Go to top
 
b_b
Default APF Avatar


Quote:
 
and there is no possible way these costs could come down


Yes they can come down. Deflation can cause price to fall. But that is simply a monetary phenomenon. The same relative hours of work would still b e required to build a house no matter what denomination of currency we use.

Goverments could reduce the costs and charges associated with home busilding (GST, development fees etc). This, IMO, is unlikely. House bears should focus on this aspect of goverment policy since I think the is the only realistic way of reducing house prices.

Quote:
 
and yet, tradies are now paid like twice as much as doctors

I'm sorry, but you lose me with this statement! Uless of course you can back it up with some evidence.

Quote:
 
I refuse to believe that the genuine, unavoidable cost of building a house has rocketed as fast as house prices have

Then why are our listed developers all trading at discounts to asset values? Why are their profits so weak? If prices are high, and profit are low, does it not stand to reason costs are high too?
Look at the US and UK prior to the bust. Huge year on year profit increases. Big jumps in ROE. Skyrocketing labour costs. Huge increase in new dwellings. These conditions are simply not observed in the Australian market.



Edited by b_b, 17 Mar 2011, 06:12 PM.
(S – I) + (T - G) + (M - X) = 0
Profile "REPLY WITH QUOTE" Go to top
 
1 user reading this topic (1 Guest and 0 Anonymous)
Go to Next Page
« Previous Topic · Australian Property Forum · Next Topic »
Reply



Australian Property Forum is an economics and finance forum dedicated to discussion of Australian and global real estate markets and macroeconomics, including house prices, housing affordability, and the likelihood of a property crash. Is there an Australian housing bubble? Will house prices crash, boom or stagnate? Is the Australian property market a pyramid scheme or Ponzi scheme? Can house prices really rise forever? These are the questions we address on Australian Property Forum, the premier real estate site for property bears, bulls, investors, and speculators. Members may also discuss matters related to finance, modern monetary theory (MMT), debt deflation, cryptocurrencies like Bitcoin Ethereum and Ripple, property investing, landlords, tenants, debt consolidation, reverse home equity loans, the housing shortage, negative gearing, capital gains tax, land tax and macro prudential regulation.

Forum Rules: The main forum may be used to discuss property, politics, economics and finance, precious metals, crypto currency, debt management, generational divides, climate change, sustainability, alternative energy, environmental topics, human rights or social justice issues, and other topics on a case by case basis. Topics unsuitable for the main forum may be discussed in the lounge. You agree you won't use this forum to post material that is illegal, private, defamatory, pornographic, excessively abusive or profane, threatening, or invasive of another forum member's privacy. Don't post NSFW content. Racist or ethnic slurs and homophobic comments aren't tolerated. Accusing forum members of serious crimes is not permitted. Accusations, attacks, abuse or threats, litigious or otherwise, directed against the forum or forum administrators aren't tolerated and will result in immediate suspension of your account for a number of days depending on the severity of the attack. No spamming or advertising in the main forum. Spamming includes repeating the same message over and over again within a short period of time. Don't post ALL CAPS thread titles. The Advertising and Promotion Subforum may be used to promote your Australian property related business or service. Active members of the forum who contribute regularly to main forum discussions may also include a link to their product or service in their signature block. Members are limited to one actively posting account each. A secondary account may be used solely for the purpose of maintaining a blog as long as that account no longer posts in threads. Any member who believes another member has violated these rules may report the offending post using the report button.

Australian Property Forum complies with ASIC Regulatory Guide 162 regarding Internet Discussion Sites. Australian Property Forum is not a provider of financial advice. Australian Property Forum does not in any way endorse the views and opinions of its members, nor does it vouch for for the accuracy or authenticity of their posts. It is not permitted for any Australian Property Forum member to post in the role of a licensed financial advisor or to post as the representative of a financial advisor. It is not permitted for Australian Property Forum members to ask for or offer specific buy, sell or hold recommendations on particular stocks, as a response to a request of this nature may be considered the provision of financial advice.

Views expressed on this forum are not representative of the forum owners. The forum owners are not liable or responsible for comments posted. Information posted does not constitute financial or legal advice. The forum owners accept no liability for information posted, nor for consequences of actions taken on the basis of that information. By visiting or using this forum, members and guests agree to be bound by the Zetaboards Terms of Use.

This site may contain copyright material (i.e. attributed snippets from online news reports), the use of which has not always been specifically authorized by the copyright owner. Such content is posted to advance understanding of environmental, political, human rights, economic, democratic, scientific, and social justice issues. This constitutes 'fair use' of such copyright material as provided for in section 107 of US Copyright Law. In accordance with Title 17 U.S.C. Section 107, the material on this site is distributed for research and educational purposes only. If you wish to use this material for purposes that go beyond 'fair use', you must obtain permission from the copyright owner. Such material is credited to the true owner or licensee. We will remove from the forum any such material upon the request of the owners of the copyright of said material, as we claim no credit for such material.

For more information go to Limitations on Exclusive Rights: Fair Use

Privacy Policy: Australian Property Forum uses third party advertising companies to serve ads when you visit our site. These third party advertising companies may collect and use information about your visits to Australian Property Forum as well as other web sites in order to provide advertisements about goods and services of interest to you. If you would like more information about this practice and to know your choices about not having this information used by these companies, click here: Google Advertising Privacy FAQ

Australian Property Forum is hosted by Zetaboards. Please refer also to the Zetaboards Privacy Policy