Unpopular Opinions on Housing, Petrol and Cost of Living

bigpoppa on 30/03/2022 - 09:48
Last edited 30/03/2022 - 09:53

The 2022 budget has been nothing but a blatant attempt to ignore the real problems for another 6 months or so. I'm not an economist but that doesn't stop me from having an opinion lol. So here's my brainstorm of ideas that make more sense to me.

Scrap negative gearing - housing is a necessity and treating it as an investment is shortsighted and a disservice to future generations especially if you're not at the least a mega-millionaire and can afford to purchase all of your kids and their kids a roof to live under. Also, less money tied up to mortgages means more money to spend or to actually invest into business etc
Scrap home buyer grant (but not without scrapping negative gearing first) - not a real solution just an attempt to shift the problem to another day.
Reduce or even scrap capital gains tax from non-housing related investments

Forget about cutting fuel excise and instead provide grants and scrap GST and LCT for electric cars. Maybe even proved interest-free loans for EVs like ACT.
Invest in more EV friendly infrastructure and renewable energy that wouldn't be affected whenever dictators in other countries wake up and choose violence.
Provide incentives/grants/tax benefits to install solar and battery storage for homes and small businesses - this would also reduce cost of energy

These are some of the things I think about a lot - am I wrong?

Financial Federal Budget

Comments

- - - - bigpoppa on 30/03/2022 - 15:03
        
        -1
        
        @rektrading: Yeah you can use the same argument to advocate for people selling drugs outside schools
        
        rektrading on 30/03/2022 - 15:05
        
        +1
        
        @bigpoppa: Selling illicit drugs is a crime.
        
        It has nothing to do with investing.
        
        smartazz104 on 30/03/2022 - 17:53
        
        -1
        
        @rektrading: It’s only a crime because the government can’t find a way to make money off it.
        
        relentless on 30/03/2022 - 18:51
        
        +2
        
        @smartazz104: medical cannabis is booming now
        
        Grunntt on 31/03/2022 - 12:45
        
        @bigpoppa:
        
        benefits 20% at the detriment of some that make up 80%
        
        I would be interested to see the breakdown of that 80%. How many of them is it to their detriment?
        
        gromit on 31/03/2022 - 14:04
        
        @Grunntt: Probably less than a quarter once you take out those that own, those that own with mortgage and those that want to rent. Still sucks for that quarter though I guess.
        
        TheKas on 31/03/2022 - 09:02
        
        +1
        
        @rektrading: Damn this country has a lot of folks with stable incomes if 2 million of them are venturing into property investment.
        The only thing I hate about the property market is dealing with the middle men (real estate agents). Hidden fees, terms, and just dodgy.
        Gov just needs to extend infrastructure far and out of the city areas, take QLD for inspiration and try to develop hubs throughout the state.But its a near impossible issue for the Gov to solve; people wont move out unless there's opportunities.
        
        rektrading on 31/03/2022 - 09:11
        
        +1
        
        @TheKas:
        
        The only thing I hate about the property market is dealing with the middle men (real estate agents).
        
        👍
    - ThithLord on 30/03/2022 - 14:21
      
      $1T forecasted, well before COVID even hit our shores …. mate, where do you get your gunja from? You need to hook me up cos it seems premium
      - rektrading on 30/03/2022 - 14:25
        
        +1
        
        @ThithLord: I don't take drugs. I get my excitement from charting.
mskeggs on 30/03/2022 - 10:14

+38

Everyone freaks out about the fairness/unfairness of treating housing as an investment.
I agree with OP here that it should be given no investment breaks. No CGT discount at all for investment properties, no negative gearing against other income. Add a non-resident tax too, while we are at it, targeting foreigners investing here from abroad, or people leaving homes empty.
The property spruikers always scream this will reduce investment in houses for renters - big deal. If it makes many, many more people own a home that is a massive benefit.
If it is true that rental availability declines above and beyond forcing rents up? Fine, buy a place. Let a level, free market decide on the price of housing, not one distorted by low interest rates and tax advantages for investors. And if the very bottom of the market becomes unaffordable for poor people (like it isn’t already!) the government can invest some of the extra CGT and negative gearing savings in public housing.

There are many, many investment properties that are owned without mortgages or are positively geared. Investors will still by property without negative gearing and CGT discounts. It is a scare campaign, with the result that property has become a disaster for young people.
A disgraceful, dog act against the younger and future generations.
If a mum and dad investor loses out? Big deal. Better somebody with enough money to buy additional houses than somebody not being able to afford any place to live.

If it requires a political solution to bring it back to fair, stagger it over 20 years, so mum and dad have a chance to sell (and an incentive to do so earlier if they have made capital gains already).
At least then in 20 years we will be able to house our families and direct our investments into productive stuff.
It will be better for everyone in the country.
- JimmyF on 30/03/2022 - 10:33
  
  +7
  
  As a start I'm ok with keeping neg gearing for 1 property only! It isn't really the mum and dad investor with 1 IP that is killing the housing market, its the stories you read of people having 20+ properties that are doing it in my view. Get rid of them!
  - Kangal on 30/03/2022 - 17:20
    
    Another, perhaps better, way of fixing this mess is Rentals.
    As it is most people are too poor to Rent, and they're also too poor to Buy. By the time their income catches up to the increase of goods and services, the Rental climate has already hit them.
    
    If you force Rents to become cheaper/affordable especially in dense locations, then most people will have more money. That money they can then use to invest themselves, or to spend it and invigorate the economy. Another factor is that these people then find it much easier to save up and buy a home.
    
    Meanwhile, it doesn't affect people who already own a house. Even people who own two homes will manage to balance it. But it makes it unfeasible for Property Investors, since their risk portfolio just increased exponentially and they stand to lose capital.
    
    Remember rising house prices cause rising rental prices, and falling rental prices cause falling house prices. Even if you never plan on buying, you should be concerned about property prices around your city.
  - Grunntt on 31/03/2022 - 12:54
    
    +4
    
    its the stories you read of people having 20+ properties that are doing it in my view. Get rid of them!
    
    Your assertion does not seem to have resemblance to the reality - from an ATO report -
    
    Here’s how many properties investors hold
    1 investment property – 71% (1.57million)
    2 investment property – 19% (418,000)
    3 investment property – 6% (129,784)
    4 investment property – 2% (47,469)
    5 investment property – 1% (19,861)
    6 or more investment property – less than 1% (20,756)
    
    They are percentages of investors, not percentage of the population.
    - JimmyF on 31/03/2022 - 13:29
      
      Your assertion does not seem to have resemblance to the reality
      
      Funny that Domain/RE seems to find one of those 20,756 every few weeks to 'share' their success story of building a property empire from borrowed money!
      - Grunntt on 31/03/2022 - 17:05
        
        @JimmyF:
        
        Funny that Domain/RE seems to find one of those 20,756 every few weeks to 'share' their success story of building a property empire from borrowed money!
        
        Yeah funny how a business based on people selling property can come up with that. Also funny how Domain/RE never seem to show you the same property empire that went bankrupt. (eg do a search for Kate and Matt Moloney - Property Investors of the Year and see where they ended up)
        
        I know I have more faith in hard data rather than some salesman quoting anecdotes.
        
        JimmyF on 31/03/2022 - 20:18
        
        @Grunntt:
        
        I know I have more faith in hard data rather than some salesman quoting anecdotes.
        
        So we ditch all neg gearing then, so everyone is on equal footing. DEAL!
        
        Also funny how Domain/RE never seem to show you the same property empire that went bankrupt. (eg do a search for Kate and Matt Moloney - Property Investors of the Year and see where they ended up)
        
        You mean these two? Hmmmm yeah 'funny' Domain/RE never run oh wait
        
        https://www.domain.com.au/news/what-to-do-when-property-bubb…
- bigpoppa on 30/03/2022 - 10:49
  
  I agree that the free market should decide how much a house would cost. But I think if we were to strip all incentives for investment properties then the majority of them would once again become a commodity, as they should be. There should be more support for long term policies.
  - rektrading on 30/03/2022 - 10:52
    
    +3
    
    Real estate isn't commodities. They're legally classified as real property.
    
    Commodities, stonks, and other hard assets are personal property.
    
    Real property and personal property are legally different types of property.
    - bigpoppa on 30/03/2022 - 11:17
      
      -2
      
      Legally property looks at the relationship between an individual and an object. In real property the object is land. Notwithstanding your err in your understanding of the distinction between a field of law and the subject matter that that field addresses, it bears no relationship to why a house is not a commodity.
      
      PS FYI I know a thing or two about law
      - rektrading on 30/03/2022 - 12:33
        
        +3
        
        @bigpoppa:
        
        PS FYI I know a thing or two about law
        
        Good, then you know why real estate will never be considered a commodity.
        
        bigpoppa on 30/03/2022 - 13:26
        
        +1
        
        @rektrading: Never will be is not the same as never should be
- JimB on 30/03/2022 - 11:48
  
  +4
  
  I agree with scrapping negative gearing for any new properties. Happy to keep it grandfathered.
  
  If the property is a poor investment that it's not cashflow positive, it's a poor investment IMO, you're only speculating.
  
  I disagree with scrapping CGT on property. What about shares?
  
  CGT discount also accounts for inflation. Before we had the 50% CGT Discount, we use to have the indexation method for discounting CGT.
  
  E.g. in 2022, you purchase an investment property for $500,000. Because Negative Gearing has been scrapped and the economy isn't going so well, the property has only gone up to $700,000 in 2032.
  
  You sell it and pay tax on the $200,000 gain. Say $60k tax.
  
  However, in real times factoring inflation, the purchasing power of the $500,000 is $672,000 after 10 years. Therefore the real capital gain adjusted for inflation is only $28,000 and not $200,000. By the time you pay $60k tax, you've gone backwards.
  
  Would be better off sticking the money in the bank.
  - mskeggs on 30/03/2022 - 14:04
    
    +4
    
    I understand the implications of no cgt discount or index.
    People will buy property to live in, or invest in it for rental return.
    
    Both these things are desirable. The capital growth is not desirable.
    
    Instead of thinking of it as a capital gain investment, think of it like buying a bus to make money from tickets. Nobody says bus companies should stick their money in the bank rather than take passengers, even though the $300k bus is going to be worth $10k in 20 years.
    
    Much better for Australia to have low cost housing and investors clamouring to invest in businesses that make money via operations, not speculation.
    - JimB on 30/03/2022 - 16:56
      
      What about CGT Discounts for investing in shares?
      - mskeggs on 30/03/2022 - 17:47
        
        +2
        
        @JimB: What about it? If you buy shares you are investing in a business that provides employment, productivity, income etc.
        Almost by definition they can’t just sit on an asset and hope it appreciates (LICs etc I’ll exclude as providing a ‘service’ to diversify investments).
        But I’m open to removing CGT discounts there too. It will push companies to pay more dividends, which is not bad thing either.
        For the record, I don’t believe in any way that any legitimate entrepreneur decides they won’t found their business and grow their great idea because they might have to pay taxes on the income from it.
        
        JimB on 30/03/2022 - 20:32
        
        @mskeggs: I don’t believe the government should provide a tax concesssion for one asset class and not another.
        
        Where do you draw the line?
        
        Commercial property? Car parking lot? Artwork or other collectables?
        
        Actually, what assets should be eligible for the 50% discount?
        
        mskeggs on 30/03/2022 - 21:16
        
        +1
        
        @JimB: Very fair point. I'd add why does some average Josephine pay their marginal rate on their paltry bank interest, while a hedgefund investor pays only half that it they flip a share portfolio after a year.
        
        I think the answer is a lot of our tax policy was put in place on the basis on what would be "fair" and "competitive" with global jurisdictions. And if you were the local partner for Goldman Sachs, you view on what is globally competitive might be slanted toward lower CGT rather than favouring the poor worker.
        
        In any case, fixing the property market to give people a roof comes first, but is certainly a good step toward reforming tax more broadly.
        
        dave999 on 30/03/2022 - 22:10
        
        @mskeggs: Removing negative gearing and CGT discount is complicating the tax system. We need to simplifiy the tax system. The more complicated the system the more tax honest people pay and the less tax dishonest people pay. Removing negative gearing and CGT discount is creating a loophole, not removing one. Both negative gearing and CGT discount is how all investments are treated.
        
        Personally I think removing either is complete lunacy - it makes no sense on any level. If you want property investors to pay more tax, just increase land tax - it does exactly what you want and it already exists. In what way is removing neagtive gearing and CGT discount better than just increasing land tax - if you want to tax investment properties?
        
        mskeggs on 31/03/2022 - 22:17
        
        @dave999: Sorry, missed this.
        I don’t care that it complicates the tax system.
        It does very, very little to complicate it, but so what? If you find it too complex not having extra deductions, don’t invest in housing.
        
        We treat all sorts of things specially in the tax system to encourage and discourage them. I am arguing that housing inflation is actively and badly harming our country, so making special rules for it is absolutely worthwhile.
        
        We have special rules for R&D, for wine producers versus beer producers, for movie producers versus record producers, for medical service providers versus plumbing service providers, and famously for the birthday cake versus the candles.
        I think we can easily accommodate a couple of rules to dampen house price speculation.
    - tomfool on 31/03/2022 - 13:22
      
      You do know the bus is a depreciable asset? And the cost of loaning money to buy the bus is offset against the income, and say you have 2 buses and one bus makes more then the other the income from one can be used to offset the loss against another.
      
      So a bus has an effective life of 15 yeas and is depreciated at 26.67% a year,in the first year you get to claim 80K against your income. Lets say the bus made an avg return on investment of 20% thats $60K and you now just made a loss of $20K, no tax paid there.
      - mskeggs on 31/03/2022 - 13:34
        
        +2
        
        @tomfool: You know a newly built or renovated house is depreciable? And a loss from one house investment can be offset against profits form another housing investment?
        
        I'm not arguing against business investment.
        I am arguing that housing is so crucial to society's well being that additional regulation should apply to discourage speculation.
        
        Imagine what would happen if "investors" bought up all the food, resulting in prices for the remaining food to triple. The government would swiftly take action.
        
        I'm saying that is what has happened in housing, and we need regulations to make it a boring, low return investment.
  - JimmyF on 30/03/2022 - 15:42
    
    I agree with scrapping negative gearing for any new properties. Happy to keep it grandfathered.
    
    Nope, should be a phase out arrangement to get rid of all these 'grandfathered' deals if you own more than 1. You got 5 years of neg gearing left, so sell up or start paying tax like the rest of us!
    - JimB on 30/03/2022 - 16:48
      
      OK, I'll give you that one. 5 years is fair.
    - tomfool on 31/03/2022 - 13:29
      
      What about shares? get rid of them to?
      - JimmyF on 31/03/2022 - 13:31
        
        +1
        
        @tomfool:
        
        What about shares? get rid of them to?
        
        Do share have neg gearing? As this is what we're talking about.
        
        Are shares driving up the cost in putting a roof over your head?
        
        Shares have CGT on them, you don't have to own shares, but you do need a place to live!
  - ruddiger7 on 01/04/2022 - 09:12
    
    They could at least cap the negative gearing to maybe 1 or 2 properties. I see on the Murdoch rags occasionally some jerkoff with 30+ properties living off the passive rental income and retiring in their 30s. No one needs to own that many properties.
    - JimB on 01/04/2022 - 09:38
      
      Capping the numbers wouldn't be equal as 1 property may be $3m, while 4 combined properties may be $2m, maybe cap the $ amount able to be negatively geared.
      
      To your point about people who accumulate 30+ properties. They wouldn't be negatively gearing overall. The only way to build up 30+ properties is making them cashflow positive (overall).
    - pogichinoy on 01/04/2022 - 09:47
      
      Can guarantee that for 30+ properties not all of them are negatively geared.
- ZloyKrys on 30/03/2022 - 21:14
  
  Well, this is a very simplistic solution that only accounts for buyers. What about people who have to rent, let me explain, for example, you are on a job for a couple of years say in Canberra or another large place in the bush. You don't want to buy there, but the ACT government taxes landlords to death so you are forced to pay like $750 pw for a crappy 3br, now if you remove even those incentives, let's assume whoever left from landlords there sells up and prices drop by say 15%, from $1M median to $850k, how does it help renters other than they now have to fight for a place that now costs $1300 pw?
  - mskeggs on 30/03/2022 - 21:33
    
    +1
    
    To start with, there is no evidence at all that rents would meaningfully rise in the absence of negative gearing and a CGT discount. They didn't rise in the 1980s, when negative gearing was disallowed for a few years (some cities rose, some fell), and rents didn't fall when the CGT discount was introduced.
    
    So let me say "simplistic" beats your "made up" which is all you have got.
    
    But even if rents did rise, why would they rise over 50%? An equivalent return to money in the bank on a $850k property is rent of $700 a week, and you will get inflation protection, as you property will likely go up but your bank balance won't (for the pedants, I am generously assuming you can make 1% in the bank on $850k, and I am not counting owner costs like rates, so some swings and roundabouts).
    
    An increase to $1350 a week would be an almost 8% return - tell 'em he's dreaming.
    
    But again, so what? If many Aussies can afford a place to live, but the very small proportion who have to rent for a year or two pay a bit more, isn't that dramatically better for our country?
    
    I don't think the scare campaign works any more.
    I don't think any renter truly fears rent on a $750 a week place rising to $1350 a week if there were more affordable places to buy.
    I don't think any renters believe the landlords are looking out for them.
    
    But put it this way. If you can offer me a house renting for $750 a week in the ACT for $850k, that is a pretty attractive return, even if I have to pay CGT at my marginal rate in years to come when I sell it. And even if I can't negative gear it.
    - ZloyKrys on 30/03/2022 - 21:36
      
      You forget that this house also attracts $8-10k land tax bill plus $3-5k grand in rates per annum from the ACT government. Here goes your yield and that's why investors leaving in droves.
      
      More than 33% Australians rent. Some of them because they don't want to buy where they live now. A lot of people who work in Canberra don't want to be stuck here for life.
      - mskeggs on 30/03/2022 - 21:47
        
        @ZloyKrys: You are correct, I forgot about ACT land tax.
        $5k rates seems very high, but I guess you get a lot of services in the ACT for that, with that light rail and all.
        
        Just looking at the ACT land tax, it doesn't seem like the tax could possibly be $8-10k. That would imply the vacant land value is $800k-$1m. Hard to imagine people in the ACT are selling established houses for under the assessed land value. I'm a buyer if you are.
        
        But sure, in the ACT landlords have to cover land tax, which makes it less attractive than other AU jurisdictions. Are you really arguing that we should set our national tax policy in reference to what the ACT chief minister says is a good idea?
        
        But so what if the ACT does have higher rents because of land tax? Wages in the ACT will have to rise if the employers want to find workers. That will make Sydney/Melbourne/Brisbane etc. more competitive places because they organise themselves differently.
        
        Forgive me if I think setting national policy to accommodate some public servant's rental preference is bonkers.
        
        tomfool on 31/03/2022 - 13:35
        
        @mskeggs: you also assuming cash on hand most people do not have 850K in the bank.
        
        So factor in interest costs
        Council fees
        Management fees
        regulatory fees (smoke alarm maint etc)
        insurance
        repairs
        
        The cash returns on IP on not very good, better value in shares.
        
        mskeggs on 31/03/2022 - 14:26
        
        @tomfool: Exactly.
        Much better to have a stable, low return market for housing. Strong returns have spiraled prices up as people chase property. Best to make it boring and never, ever delivering windfall returns.
        That way, people can afford places to live and our investment money will be directed into productive opportunities.
        
        Grunntt on 31/03/2022 - 17:43
        
        @mskeggs:
        
        and our investment money will be directed into productive opportunities.
        
        I've never fully understood exactly what these productive investments are.
        The alternative to buying property is usually seen to be shares.
        If I buy shares instead of property how does that make a company more productive?
        The money I spent to buy the shares went directly to the seller, not the company.
        So how does it make it a more productive investment?
        
        mskeggs on 31/03/2022 - 20:54
        
        @Grunntt: Shares are the founder of the company’s way of getting paid. If you buy in a float, you pay them directly. If you buy on the market, you buy from somebody who bought along the chain.
        Companies do stuff and employ people and fulfill needs. If they grow, they do more of that, and employ more people etc. Houses just sit there.
        
        ZloyKrys on 31/03/2022 - 17:49
        
        @mskeggs: I really think ACT land tax is a horrible idea, but the increasing cost for all landlords just makes them pass this increase to all tenants because there is no landlord who is not affected by it. This is why ACT is a great example of an extremely bad policy that increased rents across the board. What do you reckon - your national policies that make it less affordable to hold an investment property will make to the rental market? The ACT example just shows that you get a sharp rent rise with no option to get cheaper housing for those who need to rent.
        
        mskeggs on 31/03/2022 - 21:01
        
        @ZloyKrys: Rent growth in the ACT is 3% p.a. over 10 years. Rent in Sydney over the same time grew 1.7%
        Hobart grew 4.8%.
        Adelaide grew 3.3%
        Melbourne 1.9%
        Figures here:
        https://sqmresearch.com.au/weekly-rents.php?region=sa%3A%3AA…
        
        Only one of these changed to annual land tax.
        It seems the ability for landlords to pass on additional costs is more limited than you think.
        
        I think you would find that other changes to tax policy would have similarly moderate changes.
        Again, I think you are relying on a scare campaign if you are arguing policies to lower house prices will be bad for renters.
  - Mistredo on 31/03/2022 - 13:28
    
    +3
    
    Do you know there are countries with no negative gearing and their rental market is fine?
    - ZloyKrys on 31/03/2022 - 16:59
      
      Do they have the same migration rate and low stock as Australia?
      - Mistredo on 31/03/2022 - 17:37
        
        @ZloyKrys: Yes, look at Europe.
        
        ZloyKrys on 31/03/2022 - 17:44
        
        @Mistredo: and help me understand how they manage to keep people housed if they have low housing stock without rents going through the roof?
        
        Mistredo on 31/03/2022 - 18:42
        
        @ZloyKrys: Rents are regulated by a law in many EU countries, so prices cannot rise more than a few percent each year. Cities buy/build cheap apartments to rent them for market price if there is need for more housing.
        
        ZloyKrys on 31/03/2022 - 18:48
        
        @Mistredo: Ok, great and who pays for all these nice things?
        
        How is their population growing, %-wise comparing to Australia?
        
        Mistredo on 31/03/2022 - 19:04
        
        @ZloyKrys: What nice things?
        
        Rent regulations do not cost money. People still rent their properties, because they generate money if they are paid off.
        
        Do you realize negative gearing costs a lot of money too for nothing to show up? Not to mention all these FHO grants that just end up in the pockets of others. Public housing is something the government owns and costs money only initially. It also generates money back through rents. Public housing is not free people pay market prices but instead of renting from investors, they rent from cities.
        
        ZloyKrys on 31/03/2022 - 19:09
        
        @Mistredo: Well, nice houses to live in. They cost money to build.
        
        I am still waiting for confirmation they are solving the same problem as us. According to Google, most of Europe experiencing population decline.
        
        We don't have enough properties to house even those who are eligible for assistance, forget about commercial renters.
        
        in 2019 at much higher interest rates, the entire tax bill for Negative Gearing was like $13bn, how many houses do you think you can build in this country for $13bn?
        
        Today, with such low interest rates you'd find it's way less than $13bn.
        
        Mistredo on 31/03/2022 - 19:22
        
        @ZloyKrys:
        
        in 2019 at much higher interest rates, the entire tax bill for Negative Gearing was like $13bn, how many houses do you think you can build in this country for $13bn?
        
        An apartment costs roughly $5000 per square meter. If you focus just on build costs and build cheap. The goverment can provide land it already owns.
        
        Let's say a 50 square meter apartment is fine for most couples with one kid (pretty normal in Europe), so the building cost of each apartment would be $250k. Of course, they are not luxurious but average. You are building public housing in the end.
        
        $13bn buys you 52,000 apartments that can house 156,000 people (2 parents + a kid) each year.
        
        Australia's population grows roughly by 136,200 per year Ref. You could build enough housing just by using money from negative gearing.
        
        ZloyKrys on 31/03/2022 - 19:24
        
        @Mistredo: Just as an example, the Victorian program to build just 12000 dwellings costs $5.3bn which is cheapest possible options for those eligible for commission housing, so mostly 1-2br units with cheap finish. Now how many decades you need to build to house those + commercial renters?
        
        Who is going to live in 50sqm shoebox? You like it? Australians don't! And here is why: "The average new house built in Australia in 2019/20 was 235.8 square metres" - this is what we like.
        
        Are you a communist by the chance? You seem to have decided very well about crap units of 50sqm is all Australian family needs. Thank God, at least both ALP and LNP consider a decent house at least a 3bedder.
        
        Mistredo on 31/03/2022 - 19:33
        
        @ZloyKrys:
        
        Now how many decades you need to build to house those + commercial renters?
        
        That's why in Europe they started decades ago. The sooner you start the better.
        
        Who is going to live in 50sqm shoebox? You like it? Australians don't!
        
        They help to keep house prices down and replace investors who focus only on profit. It helps families in their twenties to save for a deposit and buy something bigger and better later on.
        
        Most young people already live in shoeboxes but they pay crazy rents, and that makes saving for a deposit quite hard. Not to mention the moment they manage to save the deposit they need to compete with investors for their first house and are forced to pay huge prices.
        
        ZloyKrys on 31/03/2022 - 19:37
        
        @Mistredo: Why do we need to follow people who don't have land somewhere tens of thousands of kilometres away who are dying out? We are on a continent that is entirely ours, we have less than 26M people and far more money per capita. We are building nice large dwellings using our own money.
        
        Why on earth we would follow European socialists who live on top of each other in shoeboxes to solve problems only relevant to one crappy planned city of Sydney?
        
        Just why do we need this crappy housing that Australians don't want?
        
        Mistredo on 31/03/2022 - 20:05
        
        @ZloyKrys:
        
        who don't have land
        
        Do you realize Europe has more livable land than Australia? Nobody wants to live in the outback.
        
        who are dying out?
        
        Europe maintaints its population through immigration so does Australia. Without immigration Australia would die out too.
        
        Why on earth we would follow European socialists who live on top of each other in shoeboxes to solve problems only relevant to one crappy planned city of Sydney?
        
        Do you realize half of Australia lives in three big cities? No European country is like that… Australia can learn a lot from Europe when it comes to city planning and development.
        
        We are building nice large dwellings using our own money.
        
        You should check the latest house projects in big cities. They are far from nice. The old days with a big block of land are gone.
        
        Europe has nice houses too. People live in apartments, because they like short commute times. You can buy nice houses for affordable prices if you don't mind commuting.
        
        Why on earth we would follow European socialists who live on top of each other in shoeboxes to solve problems only relevant to one crappy planned city of Sydney?
        
        The last time I checked housing affordability was a big problem in Australia for young people, so that's one reason. The dream of having a house with a 1k sqm block of land is unobtainable for most young Australians. I live in Sydney and most of my friends and colleagues live in what you call a shoe box, and it is not exactly cheap.
        
        ZloyKrys on 31/03/2022 - 20:09
        
        @Mistredo: Well it looks like the easiest solution is not to live in Sydney and have all nice things way cheaper!
        
        At least the rest of Australia doesn't need to suffer living in 50sqm cages because somewhere in Sydney it's considered acceptable
        
        Mistredo on 31/03/2022 - 20:14
        
        @ZloyKrys:
        
        Well it looks like the easiest solution is not to live in Sydney and have all nice things way cheaper!
        
        Easier said than done. In Australia, everything is centered around state capitals. There are no big regional cities like in Europe or the US.
        
        Also, regional prices skyrocketed in the last two years. Good luck finding a nice and affordable house in NSW. The only option is to move to WA or SA.
        
        ZloyKrys on 31/03/2022 - 20:20
        
        @Mistredo: Well it's not God given right to buy in Sydney so who cares. There's always Melbourne where you as FHB can buy through shared equity squeme with 5% deposit a really good 3br house on average wage, and nothing wrong with Perth or Adelaide either.
        
        A solution to pack everyone to Sydney indeed unlikely can be implemented without putting everyone into 50sqm cages but why on earth would Australia try to become a Mexico City. There's plenty of room in this country and last time I checked both Perth and Adelaide were ahead of Sydney in liveability.
        
        pogichinoy on 31/03/2022 - 20:45
        
        @Mistredo:
        
        You should check the latest house projects in big cities. They are far from nice. The old days with a big block of land are gone.
        
        You can still get big blocks of land in the big cities, you simply have to pay for the privilege.
        
        The last time I checked housing affordability was a big problem in Australia for young people, so that's one reason. The dream of having a house with a 1k sqm block of land is unobtainable for most young Australians. I live in Sydney and most of my friends and colleagues live in what you call a shoe box, and it is not exactly cheap.
        
        It's always been a big problem for young people throughout history in Australia. I take it your friends and colleagues paid for the proximity of their shoe box? There's pros and cons.
        
        Mistredo on 31/03/2022 - 21:07
        
        @pogichinoy:
        
        I take it your friends and colleagues paid for the proximity of their shoe box?
        
        Correct.
        
        It's always been a big problem for young people throughout history in Australia.
        
        They at least had the luxury of dropping interest rates that helped them over time. The current generation will not have this luxury.
        
        pogichinoy on 31/03/2022 - 22:31
        
        @Mistredo:
        
        Correct.
        
        That's their own volition, just like mine to live closer to the CBD where for me it's more fun, more amenities, closer to work (when we had an office), closer to the airport, beach, etc
        
        They at least had the luxury of dropping interest rates that helped them over time. The current generation will not have this luxury.
        
        We'll just have to wait and see if prices will drop once rates go up.
        
        StalkingIbis on 01/04/2022 - 20:42
        
        @ZloyKrys: roads and utilities are expensive to build and maintain is my guess.
        
        pogichinoy on 31/03/2022 - 19:41
        
        @ZloyKrys: The funny thing is, old units and flats have been around for decades. So yes, Australians have been liking it for a while.
        
        50 sqm is fine for 1-2 people. 2 bedders are circa 70-90 sqm. etc etc
        
        Beer money can only go so far.
        
        ZloyKrys on 31/03/2022 - 19:45
        
        @pogichinoy: Totally understand and appreciate that a young couple or retirees would be likely okay but I don't think it's humane to put a family with children into 50sqm cage
        
        But even then, the vast majority of Australians live in detached houses. With backyard, you know. So I am not sure they liked cages much
        
        pogichinoy on 31/03/2022 - 20:41
        
        @ZloyKrys: Agree, a family no, but that family can move further out away from the CBD and coast where its cheaper.
        
        It'll be in a shittier neighbourhood, proximity sucks, but they'll get their attached/detached house. Let's be fair, no hate on duplexes or semis.
        
        Buy what one can afford with beer money.
        
        ZloyKrys on 31/03/2022 - 21:40
        
        @pogichinoy: I concur
        
        mskeggs on 31/03/2022 - 22:22
        
        @ZloyKrys: I don’t understand why you support soaring property prices when the rest of your argument is about giving people good housing.
        If houses were much cheaper, there would be no problem.
        
        Do you think the prices of houses have soared because people are reluctant to invest in them?
        
        ZloyKrys on 03/04/2022 - 13:38
        
        @mskeggs: My concern is not prices per se, but rather holding costs and rents. I rent. Even before property shoot up 30% in this cycle, a 3 bedder in Canberra no matter how rundown in a decent school zone would be 600+ pw to rent, now the same crappy house is pushing $1m and obviously many investors sold now it's even worse than that, with all additional holding costs the rent will only go up. I don't believe for a second that ALP or LNP will do anything to reduce prices for existing houses because it's far more important electorate than those who aspire to buy, so any additional holding costs will be directly paid by those who rent and this has already happened in the ACT.
        
        pogichinoy on 03/04/2022 - 14:19
        
        @ZloyKrys: Wow $600+ pw for a house in a decent school catchment is a bargain in Sydney eyes.
        
        ZloyKrys on 03/04/2022 - 14:31
        
        @pogichinoy: Yep that was just 2 years ago, now it's like 900+
        
        But yeah, according to some BS stats, rent only grew up 3% as armchair experts tell me here
        
        pogichinoy on 03/04/2022 - 14:33
        
        @ZloyKrys: Sounds like $600+ pw was way under the market rent.
        
        If it’s renting for $900+ now, there’s people that think it’s worth that much.
        
        ZloyKrys on 03/04/2022 - 14:34
        
        @pogichinoy: The holding costs are extremely high now and many investors sold.
        
        And the trouble for many is not even to be able to afford it but also to find one and get approved, the competition is serious and stocks are non-existent. Some suburbs would have just a couple of houses below $900/wk
        
        pogichinoy on 03/04/2022 - 19:53
        
        @ZloyKrys: Supply in the right areas is scarce. No surprises there, same here in Sydney. Which is pushing up rents in the nice areas.
        
        Maybe its time to downgrade to a suburb that you can comfortably afford?
        
        ZloyKrys on 03/04/2022 - 20:01
        
        @pogichinoy: Hmm, why I did not consider that… look, I understand that from Sydney it may look obvious just move out a bit but it doesn't always work like that in the bush. Pretty much all Canberra suburbs are expensive to rent, but for different reasons, older areas have better schools but crappy houses, outer areas have okayish schools and newer houses but because they are newer, they cost about the same. Since the land release is tightly controlled, there is no such thing as cheap old crappy house in newer suburbs, and where they exist like Tuggeranong (not exactly new suburbia but slightly cheaper), vacancy rate is lowest in the country so rents are just marginally lower because of the competition. And all you have around you is the bush!
        
        pogichinoy on 03/04/2022 - 20:08
        
        @ZloyKrys: Just saying, we can't change the market, as we can only adapt to it.
        
        It's normal to get priced out of an area. Also the drop in rent prices during the pandemic obviously is temporary and it'll be back to 'normal' levels once the demand returns, especially since we've reopened our borders.
        
        ZloyKrys on 03/04/2022 - 20:15
        
        @pogichinoy: Look I am not complaining at all. All I am saying that simplistic solutions thrown here that only consider what is good for owner occupiers when 33% of the country rents, only exacerbate the plight of renters. A lot of people in Canberra don't want to buy in Canberra. Same goes for many country towns where people come for work. Sydney centric solutions don't make any sense, same goes for 50sqm cages that are also advocated as solutions, in a bush, really? My entire point is that increasing the cost of holding the property makes renters pay for it. Proven by the ACT market.
        
        And yes, it's not really relevant to COVID. If anything, the rent has gone up by 25-50% depending on dwelling during covid in Canberra.
        
        pogichinoy on 03/04/2022 - 20:21
        
        @ZloyKrys: Wait, are you calling Canberra a bush, or you describing Canberra and a bush separately?
        
        I'm not famliar with the Canberra rental market but if the holding costs for a property increase, LLs can do all they want to attempt to pass it off to the renters, but if the rents simply don't choose to pay, because not everyone has holding costs that increase, then their rentals will stay empty and they'll bleed even more money.
        
        The rental market is dictated by the income of renters, not the holding costs of a property.
        
        ZloyKrys on 03/04/2022 - 20:27
        
        @pogichinoy: well Canberra is a bush capital as rego plate says…
        
        That may be working well for markets with high vacancy rate like Sydney or Melbourne but where it's below 0.5% like Canberra or Hobart, nobody gives a … what a renter can pay. If they can't there will be groups who will share and pay. It's a family who can't share will suck it all up.
        
        When you have things like exorbitant rates ($5k for a property pa) and land tax on top of it (say 8-10k pa) and every landlord pays it, all of them are in the same boat. And it has not been like this just not long ago. But the great social experiment of Canberra tells us that renters will pay what the government wants from landlords, because there is no such a landlord who can escape those costs
        
        pogichinoy on 04/04/2022 - 14:15
        
        @ZloyKrys: Which suburbs are you searching in?
        
        Out of curiousity, is this too far out and/or not in a good school catchment area?
        
        https://www.domain.com.au/104-barr-smith-ave-bonython-act-29…
        
        ZloyKrys on 04/04/2022 - 14:27
        
        @pogichinoy: I am not searching (recently signed a lease).
        
        Bonython is in Tuggeranong which is in a cheaper (than average Canberra) area and does not have good public schools. There are Catholic ones (with additional $$ and waiting lists) which are decent.
        
        But just to highlight - this house was posted on 17/03 and already has deposit taken for higher than asking amount (probably multiple groups applied and bid it up).
        
        pogichinoy on 04/04/2022 - 16:47
        
        @ZloyKrys: Sorry for my ignorance but how do you know a deposit was already taken and for a higher amount from the ad?
        
        ZloyKrys on 04/04/2022 - 17:18
        
        +1
        
        @pogichinoy: There is an app in Canberra that is used to apply to the property, it has indicated that the rent is higher than advertised and it's got multiple applications already taken
- ColtNoir on 31/03/2022 - 12:25
  
  Solid response.
  
  I live in a duplex on the central coast, guaranteed it’s positively geared (or at least even as it was only built 2 years ago).
  
  If they’d built a single house on this land it would be worth $700-$800/week in the current inflated market, they’re bringing in $1040/week instead. An added bonus of less risk as it’s spread across 2 tenants.
  
  Is it smaller than the average home, yes, but I don’t need the extra space. Neither does the single parent next door.
  
  Encouraging better decisions will benefit a lot more people.
Xistn on 30/03/2022 - 10:16

+8

I just want Milk that tastes like real Milk.
- USER DC on 30/03/2022 - 11:26
  
  the question is do you mean lactose free milk ? or milk with lactose ? or lab grown milk?
  to me they all taste very similar to real milk (you probably wont be able to go to a farm and drink milk directly from t*ts of a cow I think), aka will likely be buying from a supermarket
  - [Deactivated] on 30/03/2022 - 13:54
    
    +1
    
    maybe he wants human milk?
    - Cluster on 31/03/2022 - 17:49
      
      +1
      
      Can't beat the taste. Mother knows breast.
Ocker on 30/03/2022 - 10:35 Comment score below threshold.
- Typical16-bitEnjoyer on 30/03/2022 - 11:04
  
  +4
  
  Why exactly do you think stock would lessen? Do the houses simply disappear into thin air?
  - Donaldhump on 30/03/2022 - 11:25
    
    +2
    
    no they disappear under water though
  - mskeggs on 30/03/2022 - 11:35
    
    +7
    
    But if prices fell, more renters would buy! Think of the poor investors.
  - Ocker on 30/03/2022 - 11:41
    
    -2
    
    Jeez - the RENTAL STOCK !!!!
    - Typical16-bitEnjoyer on 30/03/2022 - 12:48
      
      +4
      
      How would the rental stock lessen?
      
      If negative gearers sell their additional houses, what do you think happens to those houses?

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