Banter TRTT Part 14: 2022 Goodbye (To 2023)

[Pappagallo]

My God you people are idiots. This is the official graph of house prices from the Valuer General. In the decade between 2010 and 2019 Adelaide median house prices grew quite modestly, from just over $400k to around $450,000. Then from 2020 to 2022, it shot up to $675,000. All in the space of 3 short years. Phenomenal growth. Were the rules around negative gearing any different to what they were in the previous decade? I don't believe they were. So one would have to presume there must have been something else causing it, wouldn't one? I wonder what that was? Does anybody remember what was imposed on us at this time? Idiots.

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Who cares about 2010? Negative gearing was introduced in the 80s. What was the median house price in Adelaide back then?

It’s obviously not the only factor at work here but to dismiss it altogether as a significant incentive for investors is just idiotic, wouldn’t you agree?

 

[Pappagallo]

I mean, im happy with house prices

They don’t benefit homeowners though unless you own more than one house. Most people will never realise any of the “gain” unless they significantly downsize their living arrangements.

 

[Contested Marx]

I mean, im happy with house prices

You should ask someone who paid out their former wife in late 2019

Literally saved me (cost her) hundreds of thousands lol

 

[Del165198]

Who cares about 2010? Negative gearing was introduced in the 80s. What was the median house price in Adelaide back then?

It’s obviously not the only factor at work here but to dismiss it altogether as a significant incentive for investors is just idiotic, wouldn’t you agree?

No he wouldn't, because he just likes to sit on the sidelines and take potshots at anyone who doesn't agree with his sky news style sentiments.

 

[Papa G]

Most of the advantages of negative gearing are to do with offsetting your interest. Well guess what? In the 3 years that we've had 50% growth, interest rates were the lowest they've basically ever been. So the benefits of negative gearing were also at the lowest they've ever been.
So again, we can deduce that the negative gearing bogey man was not the prime reason for the explosion in house prices from 2020 to 2022.

Maybe it was migration? Actually neglible during the "Pandemic". Nobody was allowed in. Lowest it's been for 100 years. So no it can't be that.

Somebody said I only used Adelaide as an example. Well Sydney is an Gloabal and desirable city. All international and desirable cities have experienced booming property prices, negative gearing or otherwise.
Melbourne. Well the bleak city in the decade previous to the "Pandemic" had a population growth of over a million people. Over 25% population growth in 10 years. An explosion of Camry drivers. Might go someway to explaining their property market in the 2010-19 era? You know supply and demand as opposed to anything else?
Canberra is full of overpaid bureaucrats who can't get sacked, so they can just keep spending other people's money which leads to price growth.
Brisbane has had gains largely in line with Adelaide.
Perth's propperty market was stagnent for 15 years before Covid. It's median is less than Adelaide. In boomtown? Where every second FIFO bogan is earning $200k plus. Wouldn't you think those guys would be negative gearing their arses off? Perth prices seem to have only have risen since 2020 when you couldn't fly to Bali every third weekend and Jet Skis had a 2 year delivery wait time.

No people, although it clearly messes with your narrative, the super low interest rates, over zealous government handouts and the inability to spend your money elsewhere has lead to the explosion in house prices, not negative gearing. What lead to these policies? The ridiculous and absolute over reach, over spend and over reaction to Covid. Not just here, but in most places. It's funny though, the Cuckazoids that are whining the most are those that fully supported the moronic lockdown/close the country down/ruin supply chains/keep interest rates ridicuously low/ Halthcare will collapse/ Get your 5th jab that doesn't work/ be frightened all the time bullshit. Cause and effect Ladies. Cause and Effect.

 

[chiwigi]

I mean, im happy with house prices

Thing is, even those with properties etc. shouldn’t be (unless all your income comes from them), it’s causing issues all over the economy.

A big part of the problem is people can’t see past their house prices and politicians know this.

 

[Pappagallo]

Most of the advantages of negative gearing are to do with offsetting your interest. Well guess what? In the 3 years that we've had 50% growth, interest rates were the lowest they've basically ever been. So the benefits of negative gearing were also at the lowest they've ever been.
So again, we can deduce that the negative gearing bogey man was not the prime reason for the explosion in house prices from 2020 to 2022.

Maybe it was migration? Actually neglible during the "Pandemic". Nobody was allowed in. Lowest it's been for 100 years. So no it can't be that.

Somebody said I only used Adelaide as an example. Well Sydney is an Gloabal and desirable city. All international and desirable cities have experienced booming property prices, negative gearing or otherwise.
Melbourne. Well the bleak city in the decade previous to the "Pandemic" had a population growth of over a million people. Over 25% population growth in 10 years. An explosion of Camry drivers. Might go someway to explaining their property market in the 2010-19 era? You know supply and demand as opposed to anything else?
Canberra is full of overpaid bureaucrats who can't get sacked, so they can just keep spending other people's money which leads to price growth.
Brisbane has had gains largely in line with Adelaide.
Perth's propperty market was stagnent for 15 years before Covid. It's median is less than Adelaide. In boomtown? Where every second FIFO bogan is earning $200k plus. Wouldn't you think those guys would be negative gearing their arses off? Perth prices seem to have only have risen since 2020 when you couldn't fly to Bali every third weekend and Jet Skis had a 2 year delivery wait time.

No people, although it clearly messes with your narrative, the super low interest rates, over zealous government handouts and the inability to spend your money elsewhere has lead to the explosion in house prices, not negative gearing. What lead to these policies? The ridiculous and absolute over reach, over spend and over reaction to Covid. Not just here, but in most places. It's funny though, the Cuckazoids that are whining the most are those that fully supported the moronic lockdown/close the country down/ruin supply chains/keep interest rates ridicuously low/ Halthcare will collapse/ Get your 5th jab that doesn't work/ be frightened all the time bullshit. Cause and effect Ladies. Cause and Effect.

You’re missing the bigger picture as per usual. Would investors have jumped at the chance to buy properties in the low interest lockdown environment if property wasn’t already an attractive investment option?

Say you removed negative gearing and added an annual property tax pre-Covid. Do we see the same jump in prices? Or do people look elsewhere for investment opportunities?

 

[philthy05]

Most of the advantages of negative gearing are to do with offsetting your interest. Well guess what? In the 3 years that we've had 50% growth, interest rates were the lowest they've basically ever been. So the benefits of negative gearing were also at the lowest they've ever been.
So again, we can deduce that the negative gearing bogey man was not the prime reason for the explosion in house prices from 2020 to 2022.

Maybe it was migration? Actually neglible during the "Pandemic". Nobody was allowed in. Lowest it's been for 100 years. So no it can't be that.

Somebody said I only used Adelaide as an example. Well Sydney is an Gloabal and desirable city. All international and desirable cities have experienced booming property prices, negative gearing or otherwise.
Melbourne. Well the bleak city in the decade previous to the "Pandemic" had a population growth of over a million people. Over 25% population growth in 10 years. An explosion of Camry drivers. Might go someway to explaining their property market in the 2010-19 era? You know supply and demand as opposed to anything else?
Canberra is full of overpaid bureaucrats who can't get sacked, so they can just keep spending other people's money which leads to price growth.
Brisbane has had gains largely in line with Adelaide.
Perth's propperty market was stagnent for 15 years before Covid. It's median is less than Adelaide. In boomtown? Where every second FIFO bogan is earning $200k plus. Wouldn't you think those guys would be negative gearing their arses off? Perth prices seem to have only have risen since 2020 when you couldn't fly to Bali every third weekend and Jet Skis had a 2 year delivery wait time.

No people, although it clearly messes with your narrative, the super low interest rates, over zealous government handouts and the inability to spend your money elsewhere has lead to the explosion in house prices, not negative gearing. What lead to these policies? The ridiculous and absolute over reach, over spend and over reaction to Covid. Not just here, but in most places. It's funny though, the Cuckazoids that are whining the most are those that fully supported the moronic lockdown/close the country down/ruin supply chains/keep interest rates ridicuously low/ Halthcare will collapse/ Get your 5th jab that doesn't work/ be frightened all the time bullshit. Cause and effect Ladies. Cause and Effect.

Jesus Christ dude

1. Most of this is a rambling mess.

2. It’s such a mess I don’t understand what most of your points are meant to be here? None of the things you’re presenting are arguments against the incentives to buy investment properties having driven house prices up and forcing more people to rent for longer.

No one has ever said that there are not any other factors.

3. The covid stuff is just such crazy shit. The forces driving markets crazy were well underway long before covid.

My dads house buying history (moving house)

Mid 80’s - 30 something k

Early 90’s - 80 something k

2000’s - ? I don’t recall exactly but 300k + I think.

That’s a massive spike in a short amount of time, immediately after negative gearing came in.

You can argue other factors are also joining in but that doesn’t change what kick started it, and how utterly utterly predictable it was at the time.

If covid has affected house prices now, it’s not because of “government handouts” as you assert. What you think people on low to medium incomes got a few hundred dollars and suddenly are flush enough to buy investment properties?

“Martha, I got a cheque for $600, let’s go buy a house yeeha!”

Sure papa. Sure.

 

[philthy05]

Lol typing that message above just reminded me my partner and I spent more money on IVF and surgeries and our education than my parents spent on their first 2 houses combined.

 

[DaTBird187]

Property prices here in the Barossa have exploded off the back of people from Sydney and Melbourne moving here to live due to the shift in the working from home dynamic and city fatigue from COVID. Our house has gone up in value 50% in two years and all I've done is mow the lawns occasionally and changed the toilet roll holders to black.

As others have mentioned though, you can't cash in on it unless you move to a shit town with cheaper housing.

 

[DaTBird187]

Lol typing that message above just reminded me my partner and I spent more money on IVF and surgeries and our education than my parents spent on their first 2 houses combined.

I hear that.

 

[Doctor Feel]

They don’t benefit homeowners though unless you own more than one house. Most people will never realise any of the “gain” unless they significantly downsize their living arrangements.

Not totally true. Borrowing against equity is like having a permanent low interest loan option to invest back into the house or buy something you might want. Its convenient if nothing else. Saves you from personal loans etc.

 

[chiwigi]

Not totally true. Borrowing against equity is like having a permanent low interest loan option to invest back into the house or buy something you might want. Its convenient if nothing else. Saves you from personal loans etc.

It’s good because you can get into more debt easier.
Well there you go .

 

[dirty2]

Property prices here in the Barossa have exploded off the back of people from Sydney and Melbourne moving here to live due to the shift in the working from home dynamic and city fatigue from COVID. Our house has gone up in value 50% in two years and all I've done is mow the lawns occasionally and changed the toilet roll holders to black.

As others have mentioned though, you can't cash in on it unless you move to a s**t town with cheaper housing.

Yep. One of the guys I work with left Sydney 3 years ago and paid cash and had change (bought it in the Barossa) and he reckons heeps of people are doing it. (His neighbour is also from Sydney and did the same thing. Didn't know him in Sydney but)

 

[Doctor Feel]

It’s good because you can get into more debt easier.
Well there you go .

This isnt a problem for everyone. In any case you wont exceed 80% LVR so you still have a 20% buffer.

Plus if house prices fall your situation doesnt really change at all unless you want to move.

 

[raman]

I mean, im happy with house prices

Auction on my street this Saturday for a house two doors down with similar specs/vintage/level of renovation. Can’t wait to see how it goes.

 

[Pappagallo]

Not totally true. Borrowing against equity is like having a permanent low interest loan option to invest back into the house or buy something you might want. Its convenient if nothing else. Saves you from personal loans etc.

Which fuels demand for trades, which raises the cost of your home renovations. Again the real gain is questionable at best.

 

[Festerz]

Which fuels demand for trades, which raises the cost of your home renovations. Again the real gain is questionable at best.

And the ‘wealth effect’ of everyone who owns a home seeing their personal asset base increase by close to 30% over 2 years feeds directly into the inflationary pressures which the RBA is trying to combat via higher interest rates.

 

[TeeKray]

He also choose just Adelaide, when we know Adelaide’s market was a little slower than the rest of the country.

How about Perth where house prices were lower at the start of 2020 than they were in 2007?

Then literally 1 year later in early 2021 they were back to 2007 levels.

That's the impact covid had.

 

[TeeKray]

Thing is, even those with properties etc. shouldn’t be (unless all your income comes from them), it’s causing issues all over the economy.

A big part of the problem is people can’t see past their house prices and politicians know this.

Imagine thinking all of this wealth tied up in family homes that are useless assets that don't generate any income or economic activity is actually a good thing. Everyone would be way wealthier if we didn't have to spend so much money putting a roof over our heads. Government policy has failed us.

 

[Festerz]

Imagine thinking all of this wealth tied up in family homes that are useless assets that don't generate any income or economic activity is actually a good thing. Everyone would be way wealthier if we didn't have to spend so much money putting a roof over our heads. Government policy has failed us.

A quick look at the assets register for Federal and State MPs to see just how many of them own multiple residential properties probably explains why.

 

[Janus]

Why does the bottom of the market and the top of the market follow an upward channel ever since price controls were removed after WW2?

What generation entered the market in the 1970s in their early 20s? Baby Boomers.

When did they have children? Late 70s, when they were 25+.

When did those children start entering the housing market? 25 years later...right around the 2000s.

Lastly, while housing prices are definitely on the high range, when was the last time the Australian economy had a recession that would send house prices falling? 1992.

These are facts, and they are undisputed.

 

[Festerz]

These are facts, and they are undisputed.

No - they are a select handful of carefully crafted 'leading' questions

Questions based around selected historical facts to suit a particular narrative.

 

[bomberclifford]

You should ask someone who paid out their former wife in late 2019

Literally saved me (cost her) hundreds of thousands lol

I have a mate in a similar situation but reverse. He's way better off as he is but the windfall that the ex got brought tears to his eyes.

 

[philthy05]

I have a mate in a similar situation but reverse. He's way better off as he is but the windfall that the ex got brought tears to his eyes.

A while back I worked with an old bloke heading into retirement who still had a large mortgage which shocked me considering when he bought his house they would have costed pennies.



Bought a house back when they cost milk and bread money, later got a divorce and to keep the house has had to buy the half his wife got so had to take out a massive loan.