Society/Culture The housing crisis. How is it fixed?

[GoEaglesGoSGIO]

That is true.

Sitting members of parliament have something like 300m worth of investment properties.

BUT, still, voters simply do not want cheaper housing right now.

Even if they did want it it wouldnt matter even 1 tiny bit is what im saying.

 

[HirdsTheWord]

Even if they did want it it wouldnt matter even 1 tiny bit is what im saying.

Thats not true though.

in 2019 fed election one of the key promises from labor was the removal and adjustment to negative gearing and other property taxes which would make housing cheaper. They were smashed in the election.

They removed this policy due to feedback from the 2019 election and then won the 2022 election with that policy removed.

You can scream political graft and corruption all you want, you won't be wrong. BUT homeowners who make up the majority of the voting base dont want their houses to drop in value. it's that simple.

if the voting base wanted cheaper housing. it would happen, trust me. The fact is they dont.

Political partiers either need to agree on it, so voters dont have a choice OR they need to convince the voting base. Good luck with either.

 

[GoEaglesGoSGIO]

Thats not true though.

in 2019 fed election one of the key promises from labor was the removal and adjustment to negative gearing and other property taxes which would make housing cheaper. They were smashed in the election.

They removed this policy due to feedback from the 2019 election and then won the 2022 election with that policy removed.

You can scream political graft and corruption all you want, you won't be wrong. BUT homeowners who make up the majority of the voting base dont want their houses to drop in value. it's that simple.

if the voting base wanted cheaper housing. it would happen, trust me. The fact is they dont.

Political partiers either need to agree on it, so voters dont have a choice OR they need to convince the voting base. Good luck with either.

That policy was a lie and most saw through it. All he was doing was moving houses from local to overseas investors without any impacts on pricing. It was easy to campaign on that because it was true.

If people think that would have led to cheaper housing prices they were way off. More people then just home owners deserted them hence the flogging

 

[imtall]

Time will tell. And this thread keeps a record.

I'm happy to be proven wrong - but I'm making the call and i am confident about it.

If all of Australia's politicians are up to their eyeballs in property and debt - then i want to be on the other side of that bet.

You buy the ticket. You take the ride.

 

[HirdsTheWord]

That policy was a lie and most saw through it. All he was doing was moving houses from local to overseas investors without any impacts on pricing. It was easy to campaign on that because it was true.

If people think that would have led to cheaper housing prices they were way off. More people then just home owners deserted them hence the flogging

Not sure that's accurate. All EXISTING homes would have been exempt whilst only NEW homes could have the usual tax schemes applied, such as neg gearing etc.

Transferring an existing home would have done nothing for overseas investors as there no taxation benefit for owning it, and its value likely would have dropped. Only NEW homes would have that.

labor essentially intended to shift investment from existing homes to only new ones. Which is good in theory BUT the public didn't like it as it would have impacted on all those who owned an existing house.

 

[imtall]

Not sure that's accurate. All EXISTING homes would have been exempt whilst only NEW homes could have the usual tax schemes applied, such as neg gearing etc.

Transferring an existing home would have done nothing for overseas investors as there no taxation benefit for owning it, and its value likely would have dropped. Only NEW homes would have that.

labor essentially intended to shift investment from existing homes to only new ones. Which is good in theory BUT the public didn't like it as it would have impacted on all those who owned an existing house.

May i ask. Are you a homeowner? Investor?

 

[HirdsTheWord]

May i ask. Are you a homeowner? Investor?

Both, well kind of.

I own my home and recently sold an investment property, and then built a granny flat at the back of our property.

Thinking about buying another IP but not sure where yet.

 

[imtall]

Both, well kind of.

I own my home and recently sold an investment property, and then built a granny flat at the back of our property.

Thinking about buying another IP but not sure where yet.

Why did you sell your investment property if you are so bullish the market?

 

[HirdsTheWord]

Why did you sell your investment property if you are so bullish the market?

clarification. I am not bullish. I just think your suggestion a 50% drop is incoming is dumb. I can see values dropping a bit over the next 1-2 years. Maybe 5-10%. area pending.

I sold my IP because the property was older and the cost to maintain was not worth it at the cost i was renting it out, was only an apartment so sinking fund issues were getting annoying. Made a bit off it, just wasn't worth the ongoing hassle.

So i sold and built a granny flat at our place, rent it out now and then daughter will likely move into it when she's older.

I'd buy again if i found a good deal.

 

[imtall]

clarification. I am not bullish. I just think your suggestion a 50% drop is incoming is dumb. I can see values dropping a bit over the next 1-2 years. Maybe 5-10%. area pending.

I sold my IP because the property was older and the cost to maintain was not worth it at the cost i was renting it out, was only an apartment so sinking fund issues were getting annoying. Made a bit off it, just wasnt worth the ongoing hassle.

So i sold and built a granny flat at our place, rent it out now and then daughter will likely move into it when she's older.

id buy again if i found a good deal.

Ladies and gentlemen who are bearish property - i give you the people you are betting against.

 

[HirdsTheWord]

Ladies and gentlemen who are bearish property - i give you the people you are betting against.

Doesn't even make sense? how is someone bearish on property betting against me, when i think that property is going to drop?

Wouldn't someone bearish on property be betting against someone who thinks property is going to increase IE bullish?

 

[burge13]

The fundamental issue is that the majority of the voting base are homeowners. Governments have no chance of getting elected if they actively tell people they will lose value on their homes.

There are plenty of easy things that can be done to lower housing. The problem is convincing voters to vote for it.

2019 one of Labors key promises was adjustments to Negative gearing laws. They got smashed in the election.

2022 labor remove that promise, and they win.

But there is also plenty they could do that voters would be OK with

Massive vacancy tax
Stopping foreign investment
Lowering immigration to manageable levels for our infrastructure growth

Nothing unreasonable there, nothing 97% of the voting base would be against regardless of which team threw up the ideas

 

[burge13]

Time will tell. And this thread keeps a record.

I'm happy to be proven wrong - but I'm making the call and i am confident about it.

If all of Australia's politicians are up to their eyeballs in property and debt - then i want to be on the other side of that bet.

You buy the ticket. You take the ride.

I'd prefer to be on the side with the people who rig the game in their favour, not bet against them

Seems a bold strategy you're using

 

[DangerousD]

They won't know hit them come 2026. House prices crashing 50%, Aussie banks insolvent having to be bailed out.

That is what we are staring down.

No one believes this garbage

 

[DangerousD]

I'm not sure what I have posted that warrants multiple quoted posts and mocking photos.

All for saying I think housing is overvalued and primed for a significant correction?

I'm not stressed about 2026. I can't wait. Nothing we need more in this country then a housing crash and speculators being wiped out. This would allow us to get back to productive enterprise rather than focussing on trading houses between each other.

You buy the ticket. You take the ride.

What do you think will cause the bank to stop lending to people to cause a crash?

If people are currently able to make payments on a $700,000 mortgage, what do you think will change?

 

[DangerousD]

Then you have nothing to worry about?

Housing has crashed 50% and more in many areas around the world, numerous times. In Australia, it has happened in individual markets in recent memory.

Just because an event hasn't happened, doesn't mean it won't.

Time will tell. Let's agree to disagree.

Again, a crash has to be caused by something, what do you think will cause any correction in house rices?

 

[DangerousD]

The fundamental issue is that the majority of the voting base are homeowners. Governments have no chance of getting elected if they actively tell people they will lose value on their homes.

There are plenty of easy things that can be done to lower housing. The problem is convincing voters to vote for it.

2019 one of Labors key promises was adjustments to Negative gearing laws. They got smashed in the election.

2022 labor remove that promise, and they win.

The craziest thing about this is.

Labor’s plan had a grandfather clause for all existing investments, the people would have lost nothing.

The changes proposed would have done very little to weaken house prices but possibly raised more money for social housing.

But people get scared and buy in to the scare campaign

 

[DangerousD]

Not just that The fundamental issue is the donors they serve are house owners and they themselves sit in parliament gathering up properties on there high wages

Good example is Fatima Payman who owns a house in Canberra which the taxpayer pays out to to her $2,170 per week in rent for her to live in it. She will pay that off before her term ends as the house cost 450,000.....

If thats the parliament you have, just flat out forget about it. Voters dont matter at all here when the people in charge of the system are the ones who benefit the most from it too

What does that have to do with the housing market though?

Those subsidies are government perks, sure there should be tighter controls on them but what’s been mentioned that would change that?

She would get that regardless of negative gearing changes, capital gains changes.

 

[DangerousD]

That is true.

Sitting members of parliament have something like 300m worth of investment properties.

BUT, still, voters simply do not want cheaper housing right now.

I’m not sure how this matters, labor’s proposed changes protected exactly sting investments, they would lose nothing.

 

[imtall]

Again, a crash has to be caused by something, what do you think will cause any correction in house rices?

It is pretty obvious isn't it?

Speculative activity unhinged from fundamentals. Said speculators realising they are on a loser and running for the exits. No buyers in sight to allow them out of their now underwater trades.

I mean, this scenario is nearly as old as time. It ain't new. Speculating on assets is probably the oldest profession in history.

All the asset owners in this thread are a perfect example. You guys just pile on anyone who dares go against the narrative that housing is a sure bet. It belies an understated anxiety and nervousness. Does it not?

 

[GoEaglesGoSGIO]

What does that have to do with the housing market though?

Those subsidies are government perks, sure there should be tighter controls on them but what’s been mentioned that would change that?

She would get that regardless of negative gearing changes, capital gains changes.

Well if you own 300 million dollars in properties as a group, you probably dont want to turn that 300 mill to 200 mill yeah ?

Just explaining how access to a free house makes them susceptible to wanting the housing market to keep growing

 

[DangerousD]

It is pretty obvious isn't it?

Speculative activity unhinged from fundamentals. Said speculators realising they are on a loser and running for the exits. No buyers in sight to allow them out of their now underwater trades.

I mean, this scenario is nearly as old as time. It ain't new. Speculating on assets is probably the oldest profession in history.

All the asset owners in this thread are a perfect example. You guys just pile on anyone who dares go against the narrative that housing is a sure bet. It belies an understated anxiety and nervousness. Does it not?

You haven’t listed a single reason as to what will cause a collapse.

 

[GoEaglesGoSGIO]

It is pretty obvious isn't it?

Speculative activity unhinged from fundamentals. Said speculators realising they are on a loser and running for the exits. No buyers in sight to allow them out of their now underwater trades.

I mean, this scenario is nearly as old as time. It ain't new. Speculating on assets is probably the oldest profession in history.

All the asset owners in this thread are a perfect example. You guys just pile on anyone who dares go against the narrative that housing is a sure bet. It belies an understated anxiety and nervousness. Does it not?

I cant think of a single property investor in my circle right now who would give a crap if the house prices plunged 50%. I own 3 houses about to be 4. Wouldnt impact me in the slightest to get me to sell.

What would is if say rental prices went down by about 70%. That would impact the investors but if we are fair dinkum, if rent prices go down by 70% we got bigger problems then housing prices to deal with

 

[DangerousD]

Well if you own 300 million dollars in properties as a group, you probably dont want to turn that 300 mill to 200 mill yeah ?

Just explaining how access to a free house makes them susceptible to wanting the housing market to keep growing

No changes to investment taxes would cause mass collapse in the market if that size, as long as there is more people coming in to an area, it rices will grow, just depends on how fast.

As mentioned elsewhere, previous changes raised had grandfather clauses in them.

The rort the politicians use which you pointed out is an area that could and should be addressed, just that all the changes that have been raised here, wouldn’t stop the pollies doing what you stated.

 

[imtall]

You haven’t listed a single reason as to what will cause a collapse.

This thread will be interesting to monitor in real time as we approach the point where land markets start to tumble and the associated problems that will come from that.

I sense some people will be in for a hell of shock. A crash course in the dangers of dabbling in leveraged markets.