Should Rents Be Capped?

Lhawkshead on 29/12/2022 - 11:33
Last edited 29/12/2022 - 15:58

I dont really understand finance, so there's probably some big brain banker who thinks different.

Why is my rent going up because my landlord's mortgage is going up?
I didn't take out a loan on a home I won't live in. I'm not getting more house, im not getting better services? they havn't improved the house in any tangible way.

I think if rents were capped based on objective features of a house like rooms, amenteties, idk water efficiency? like actual tangible definable things it would be good for people.

I get that might mean that investors can't afford their mortgages, but why are we basing housing on the reckless financial decisions of investors? if you can't afford that 2nd or 3rd property maybe you should just sell it? and not make tennants pay for what you can't afford.

The banks and landlords have had decades to tackle homelessness and they havn't. Maybe their way isnt actually good.

Maybe this would just have aweful consequences though. So apart from rampant greed what would go wrong with capping rents?

(EDIT) I really appreciate the perspectives and comparisons between attempts in other parts of the world as a way to explain things. Keep em coming.

Poll Options expired

  • 89
    Cap rents based on objective features of a property
  • 601
    Don't cap rents based on objective features of a property
  • 11
    Cap rents based on things like income amounts
  • 13
    Don't cap rents based on things like income amounts
Financial Rent

Comments

    • [Deactivated] on 29/12/2022 - 19:37
      +4

      Big Australia policy is the problem.

      • juki on 31/12/2022 - 09:34
        +1

        what does that refer to? i know big pharma, big brother, big w, big australia ?

        • tekisei on 31/12/2022 - 10:21
          +2

          Big australia refers to a significantly bigger population in the country - like 35m by 2050.

          Some politicians / economists / businesss people like the idea because more people means more consumers, wage slaves (e.g. more competition for jobs = cheaper wages), and enough mass to develop a few more specialised industries, and a bigger market means more leverage internationally,

          • GandalfTheCheap on 01/01/2023 - 18:29
            +1

            @tekisei: Yep it's the reason the LNP keep quietly granting lots of visas for mass immigration, despite ranting loudly about "stopping the boats" to pander to the more racist voters.

            They've successfully used heavy immigration to keep wages down for decades, while everything else (prices, land, wealth) has gone way up.

            And thanks to racists, we now have so much wokeness fighting back, that it's hard to critique immigration policy without being ignored as a racist.

            One of the reasons why 95% of Australians are actually worse off than 10 years ago.

        • Dogsrule on 31/12/2022 - 10:32
          +1

          You leave Big W out of this!

        • buckster on 01/01/2023 - 10:41
          +3

          Don't forget the big pineapple, Big Kev (now wasn't he excited?)

          • juki on 02/01/2023 - 00:24
            +1

            @buckster: how could i have left the big pineapple out…

    • ajr5k on 29/12/2022 - 21:22
      -1

      You'd think after seeing the results of government meddling in the housing market - capital gains tax cuts, negative gearing etc - you would advocate for them doing less rather than more.

      • lubos on 31/12/2022 - 23:20
        +3

        But CGT discount or negative gearing applies to all investments. Not just real-estate. You make it sound like there are specific tax breaks for property investors only.

        • ajr5k on 01/01/2023 - 15:38
          -2

          CGT is the last throw of the dice the tax department has to reduce the wealth of the family unit. I'd prefer to see them abolish it entirely.

      • cadwalader on 01/01/2023 - 14:04
        +1

        Why do you automatically conclude that the government is doing "too much", rather than "too little"?

        • ajr5k on 01/01/2023 - 23:11
          -1

          I'd prefer they keep their greedy little snouts out of as much as possible. Having people with property portfolios worth millions deciding how property ownership should be taxed and regulated is dumb.

    • Thaal Sinestro on 30/12/2022 - 07:32

      Yes, we shouldn't rely on greedy mum and dad investors to build housing; it should be the government's responsibility. It has to be done intelligently though, a mix of styles rather than just copy paste shoebox apartments. Governments could build new communities at the edge of existing cities where the land is cheaper. Put in a mini CBD first for shopping and services, then 2 rings of suburbs around the mini-CBD.

      Cryptocurrency's fate has proven that housing is the safest and best performing investment opportunity, unfortunately.

      • cadwalader on 01/01/2023 - 14:04

        Yes, the government is never ever greedy.

    • Yarborough on 30/12/2022 - 08:00
      -7

      Scott Morrison imported 1 million indians into Australia in the last 10 years. Are you asking for us to deport them back to the scam centers?

    • Ghost47 on 30/12/2022 - 16:21

      Crypto was a bust, but I dunno maybe people could invest in businesses or something.

      Not sure if this is sarcasm or not, but share markets exist. In fact, one of the wealthiest people on the planet built his wealth investing in shares (i.e. businesses). 99% of property investors probably have no idea who he is though.

      The thing is most mum & dad investors and I would say property investors in general aren't sophisticated investors and need to see and touch their investments, lest they might as well be gambling their money away at the casino.

      The way this country is — as is many other countries I'm sure — is that housing is seen as an investment first and foremost and a place to live secondary. That's it, and it's never going to change. Ever.

      Government could also decentralise our cities a bit more

      Sadly a bit of a pipedream. Sydney's done it to an extent but the roads are terribly designed and laid out that there's basically congestion everywhere. To build an efficient decentralised city you need lots of freeways/highways and that simply isn't the case for most of our cities, and we'll all be dead by the time the proper infrastructure is in place to support decentralised cities. WFH means we don't need decentralised cities anyway, so it's a great thing the LNP built a really solid NBN /sarcasm.

      • AustriaBargain on 30/12/2022 - 17:07

        Home delivery also helps stay off the city roads too. I actually get a bit annoyed when I need to go to a shop to buy something. Much more efficient to have a truck or car full of stuff making multiple deliveries.

    • Toph Beifong on 31/12/2022 - 00:29

      Why when you can buy a house, sit on it, do nothing productive and make bank? All the politicians do it

      • Ughhh on 31/12/2022 - 00:57

        Is it really that easy? You must have 10+ properties then. Lucky.

  • zonra on 29/12/2022 - 11:48
    +18

    Something something entitlement.
    No one is forced to keep utilizing a service if the cost has increased. You have multiple options such as moving to a smaller place, cheaper suburb, or arrange your very own accommodation etc.

    • jjjaar on 29/12/2022 - 12:02
      +4

      Often times moving is expensive in itself, but relocating can have knock on costs for people, such as additional costs of commute if work/school is now further away. It’s not always as black and white as you make it.

      Also, yes, everyone is entitled to live somewhere. It’s a non-negotiable service.

      • zonra on 29/12/2022 - 13:07
        +5

        Also, yes, everyone is entitled to live somewhere. It’s a non-negotiable service.

        Assuming that is an actual legislation somewhere that I’ve missed, who is responsible for providing everyone’s with housing? Or better yet, who do you propose should take on this responsibility? The banks? The councils? The government? The neighbours? Tax payers?
        Money doesn’t grow on trees. But we can just print more right, then buy everyone a house? That just ensures no one go to work anymore and economy collapses.
        I’m not denying everyone needs a place to live. But not everyone gets to live where they want. Not being able to afford a $500k house is far from being homelessness.

        • cobknob on 29/12/2022 - 15:15
          -3

          I actually do have a better solution than the current gov - we have the land. Just build many tiny homes using army corps engineers - if we have em. Right now people need a roof not a resort!

        • jjjaar on 29/12/2022 - 18:22
          +2

          I’m not denying everyone needs a place to live

          This was the exact point of my comment: housing is non-negotiable. But sure, let’s read too much into it and go on a rant about legislation or money not growing on trees.

          I didn’t disagree with your comments that people will have to make trade offs based on what they can or can’t afford. I 100% agree with this.

          I simply pointed out that you cannot ignore the cost associated with moving as part of the equation when balancing these trade offs. It is not as straightforward as “just move somewhere cheaper” as you have suggested.

          As you didn’t understand my original point, let me elaborate.

          Depending on the rent increase proposed, often the costs associated with moving will offset this increase anyway. To the renter they’re out either way. Stay and you pay more rent. Move and you have to fund the move.

          If rent goes up $20 a week, that’s $1,040 a year. $50 a week is $2,600 a year. It can easily cost this much to move house, and often it’s more.

          $1,000-$2,500 in extra rent spread throughout the year, or paying that amount in a short period to be able to move (not even factoring in paying a bond associated with a new rental before being paid back the first bond) is a hard choice for many people, often the higher weekly is actually an easier financial decision, even if it is compared to a property where the rent is cheaper than they pay now.

          Even if you completely DIY the move you still have to factor in lost time to physically move (that could have been spent earning more money), time in dealing with home admin (eg disconnecting and connecting services), cost of petrol and once again, the second bond associated with the new rental… it may not be the cash equivalent, but it’s still a consideration for anyone who needs to move.

          And as I noted in my original comment, if someone moves further away from where they work or need to be, the rent may be cheaper, but the cost to get there may once again offset the cheaper rent, so the renter is no better off.

          Regardless of the decision made (move somewhere cheaper / move somewhere that’s what you’re paying now / stay put and pay more) the renter will have a cost to pay that they otherwise wouldn’t have if the rent wasn’t increased.

          So as I originally said, it’s not as black and white as you’re suggesting.

          And before you go on another side rant about who knows what, I don’t necessarily support the idea of rent capping for reasons I’ve outlined here.

      • supersabroso on 29/12/2022 - 16:52
        +6

        It is black and white financially. The rest is luxury and how you want to enjoy your life. I can afford a mortgage because I'm willing to live in the west, if I wanted the luxury of location and lived near the city then I would never be able to afford a house for the rest of my life.

        There are thousands of people that live in the central coast and travel to work in Sydney everyday for 1.5hrs because they want a house by the beach and that's the only way they can afford it. Each to their own, if you refuse to compromise or work harder/smarter then you will be subject to the price hikes forever and ever and you'll just have to deal with living pay check to pay check.

        • jjjaar on 29/12/2022 - 19:12
          +1

          It is black and white financially.

          You’re right. As I have explained here, rent increases, whether people stay or move will always be a cost for the renter. Even if they end up somewhere cheaper, and make back the cost of moving, that initial cost can be near impossible for many people. Also, not everyone has a couple of thousand dollars sitting around. So yes, black and white: it will cost renters.

          There are thousands of people that live in the central coast and travel to work in Sydney everyday for 1.5hrs because they want a house by the beach and that's the only way they can afford it.

          Yes, agree. Trade offs have been made. But obviously options still exist for these people, that’s not the case for everyone.

          Each to their own, if you refuse to compromise or work harder/smarter then you will be subject to the price hikes forever and ever and you'll just have to deal with living pay check to pay check.

          Many people have already made compromises to be where they are now, so to suggest that they’re refusing to compromise is not only ignorant, but insulting. Yes, they will absolutely need to compromise again if presented with a rent increase, but with the way these costs are going, these compromises are just chasing them year after year. It’ll eventually catch them. Then what?

          These compromises also have knock on effects. If people in the inner city relocate to the suburbs, people in the suburbs move to the outer suburbs to afford the rent, and then some of these people will move rurally…

          These compromises have meant that the cost of housing in rural areas is now much higher than it used to be, and a lot of people who have always lived in these towns are now homeless.

          Even if these people were able to afford the costs associated with moving, the costs of housing is still an issue in other towns, it would also likely mean a new job, depending on where they have to move, but let’s say they do all this, sign a 1 year lease and then 12 months later, another rent increase comes around…

          What compromises do they need to make now, and how they can just “work harder/smarter” to stop this cycle?

          It’s hard to convey this over a text based platform, but I am genuinely curious to hear your suggestions. As I have said here, I don’t necessarily support rent capping, but this cycle isn’t going to solve itself.

          • cadwalader on 01/01/2023 - 15:54

            @jjjaar: The housing shortage in rural areas is exactly what happens when you have several years of underinvestment in housing supply. This is what happens with just-in-time housing that lags demand. But somebody needs to wear the cost and risk of investing in those areas (or any area).

            Its either the taxpayer subsidizing partially for investors to take the risk to supply housing to those areas or the taxpayer taking on the entire cost of providing the housing in those areas.

            Its estimated that negative gearing will costs between 13-14 bn in forgone tax revenue at what interest rates may go to in 2023.

            https://www.abc.net.au/news/2022-11-03/negative-gearing-and-…

            That negative gearing also includes negative gearing for all forms of investment, not housing. But lets run with that number anyway.

            14bn, that is just 40,000 houses at 350k each (I believe this is the cost of labour and materials with a bit of margin for organization and planning costs).
            Or around 0.39% of all Australian households.

            I would say we need more investment and better zoning in the regional areas but the vacancy rate also needs to be capped at 1% and short term letting should be allowed, but require permits that need to be renewed every year. If vacancy rates fall below 1%, then short term rental permits will be refused and they'll have to put it up for 1 year rentals at least. Any vacancy below 2-2.5% should be sufficient to general profitable rents anyway, so there isn't a disincentive to invest.

            Another compromise people can make is to buy denser housing instead of fixated on freestanding houses.

      • Nucleus Acumbens on 29/12/2022 - 18:00
        -2

        Who should supply this "service" of living somewhere?

        Before you answer that, may I ask you to think about the fact that Australia is a meritocracy, capital society with liberal ideologies and principles.

        Everyone may be "entitled" (really?) to live somewhere but I don't think Mabo (2) means what you think it does.

    • hawkshead on 29/12/2022 - 14:03
      +3

      I think in this case its not a service but a necesity.

      • zonra on 29/12/2022 - 14:54
        +8

        Is is a necessity that you have to stay in that particular property?
        Are you saying that there are absolutely nothing else that you can comfortably afford in the whole Australia?
        Why make it that particular landlord’s issue that you stay there and get to pay the price you choose?

      • Nucleus Acumbens on 29/12/2022 - 18:05
        +1

        In a liberal society, it is just as illegal for a rich man to sleep under a bridge as it is for a poor man.

        But nowhere in legal doctrine from our Constitution to any one of the six international rights treaties to which Australia is a party is it mentioned that housing is a necessity.

        Making things up to suit your own narrative isn't going to compel the general public to home the homeless.

        • Thaal Sinestro on 30/12/2022 - 07:36
          +4

          The Australian constitution should be torn to pieces. It's primary purpose is to protect the wealth of the rich people.

    • orangetrain on 29/12/2022 - 19:49
      +1

      Funny how all the money gas thrown on the housing fire is not considered entitled owners.

    • AustriaBargain on 29/12/2022 - 21:27
      +1

      Then employers start complaining they can't find any low level workers if they all leave the city.

  • Hydralyte on 29/12/2022 - 11:51
    +21

    No, get rid of tax concessions for investment properties.

    • Almost Banned on 29/12/2022 - 12:43
      +2

      Why?
      Should we also get rid of tax concessions for other investments?
      Should businesses no longer be able to deduct the cost of their inputs?

      • Hydralyte on 29/12/2022 - 12:43
        -8

        Because of people like you

        • Almost Banned on 29/12/2022 - 12:47
          +3

          Sure, tell farmers that they can no longer deduct their operating costs. See how that goes.

          • Hydralyte on 29/12/2022 - 12:48
            +5

            @Almost Banned: I'm talking about residential properties and this guy starts talking about farms. Nice redirect.

            Frankly, most investment properties aren't farms.

            • Almost Banned on 29/12/2022 - 12:58
              +1

              @Hydralyte: But you have yet to explain why residential property should be treated differently to food, medicine, utilities, or clothing…

              • lunchbox99 on 29/12/2022 - 13:14
                +12

                @Almost Banned: Because it has created a housing bubble and serious affordability issues for regular income Australians. Governments should be encouraging investment in productive assets to grow the economy not increasing private wealth for people who aspire to do nothing.

                • Dabbler68 on 29/12/2022 - 14:06
                  +2

                  @lunchbox99: Maybe governments should be encouraging owners to invest in real estate. With rental prices primarily being driven by supply and demand, the increased supply will reduce rental prices.

                  Or would create disincentives for real estate investment, this driving up rental prices due to less supply?

                  • buckster on 01/01/2023 - 10:45

                    @Dabbler68: The only problem is that governments in Australia, particularly in the last 10 years but technically prior too, have implemented a number of policies (and declined to stop a few) to drive up demand way in excess of any stimulus for supply

              • hawkshead on 29/12/2022 - 14:04

                @Almost Banned: I think it is treated diffrently. in that there's thousands of people who cant find a home but can eat, drive, get medicine, clothes, etc.

                • Almost Banned on 29/12/2022 - 14:14
                  +1

                  @hawkshead: Only because they can pay the price the market sets for those items.
                  Plenty of other people can't.

                • Nucleus Acumbens on 29/12/2022 - 18:11
                  +4

                  @hawkshead: Let me finish that sentence for you. I posit that there are thousands (really) of people who can't find a home where they want to live at a price they are prepared to pay.

                  With general exceptions, I bet most people pay the asking price of food, cars, petrol, medicine and clothes without expecting those suppliers to reduce their profits.

              • Assburg on 29/12/2022 - 14:08
                +4

                @Almost Banned: Investing in residential property is not necessary to live any sort of life. The appeal for the typical person is to create generational wealth and while it seems like a nice idea to pass on wealth to our children…. It's this sort of practice that creates truly out of touch people.

                • Almost Banned on 29/12/2022 - 14:17

                  @Assburg: Investing in farms or medicine or clothing is not necessary to live any sort of life. We could all go back to the days when we grew our own food and made our own clothes. But is that really what you want?
                  Not everyone can buy a house. Some people have to rent. Are you saying that people shouldn't be allowed to rent houses to those people.
                  People invest in residential housing for a variety of reasons, including because it feels 'real' to them. They can see it, they can touch it, they can work on it.
                  In addition, they have been told that it is a 'safe' investment.
                  That is not true for most investment classes.

                  • Assburg on 30/12/2022 - 04:49
                    +2

                    @Almost Banned: If you've noticed, publicly listed companies have a long history of doing brutal and inhumane things.

                    Rules and legislation regarding investment properties in this country are broken, which is why so many do it.

                    • Almost Banned on 30/12/2022 - 10:12

                      @Assburg: What on earth are you talking about?
                      Because some companies have done some bad things - what exactly???
                      About 8% of Australians own an investment property. Of those, about 80% own one. And of those, the vast majority earn less than $80,000 pa. These are just ordinary people trying to get ahead.
                      https://www.ato.gov.au/About-ATO/Research-and-statistics/In-…
                      BTW, that is substantially fewer than Australians owning shares.

                      • Hydralyte on 01/01/2023 - 13:38

                        @Almost Banned:

                        These are just ordinary people trying to get ahead.

                        They're well off people trying to get ahead at the expense of the new generation of young people who will be left with nothing.
                        Get ahead without government handouts. Isn't that what you say to the 3 million Aussies living below the poverty line?

                        • Almost Banned on 01/01/2023 - 16:23
                          +1

                          @Hydralyte: As I have stated, and as the ATO link I provided shows - most people declaring income from an investment property earn less than $80k pa.
                          Only an idiot would consider someone with that level of income 'well off'.
                          Putting money into property promotes land sales and building - isn't that what you want?
                          It is not a 'hand-out' for the government to let you keep slightly more of your own money. The only way someone has that type of mentality is if they think all of my money rightfully belongs to the government. It doesn't.
                          As for Australians getting handouts - the only people who should be getting benefits right now are people who are medically incapable of work. There is a massive labour shortage. Everyone else should be in a job and not relying on the government teat.

      • tryagain on 30/12/2022 - 01:27
        +1

        Negative gearing is the tax concession that is treated differently to other businesses. Sure you should be able to claim costs of providing the service against income like all businesses do, you shouldn't be able to claim those costs against totally unrelated income (your job).

        • Almost Banned on 30/12/2022 - 10:00
          +1

          All investments can be negatively geared - or positively, or neutrally.
          All businesses claim deductions against ALL sources of income - not just the specific area that made the loss.
          If you owned two stores - one making a profit and one making a loss of equal amounts - will you quarantine the loss and still pay tax on the one making the profit?

          • tryagain on 30/12/2022 - 15:20

            @Almost Banned: Yes but am employee earning a wage/salary isn't a business. You can't deduct other business costs against an unrelated wage/salary, but you can with property.

            • Almost Banned on 30/12/2022 - 16:17
              +2

              @tryagain: Of course an individual taxpayer can be a business - plenty are. Google 'sole trader'.
              Whether you operate your own trade, or are a contractor, you declare all sources of income, and all deductions.

              • tryagain on 30/12/2022 - 18:53

                @Almost Banned:

                "Of course an individual taxpayer can be a business - plenty are. Google 'sole trader'."

                This isn't what I was saying.

                Whether you operate your own trade, or are a contractor, you declare all sources of income, and all deductions

                You declare them yes, that doesn't mean they are treated the same.

                Can't quite tell if you are just being argumentative, or willfully ignorant.

                • Almost Banned on 30/12/2022 - 20:01
                  +1

                  @tryagain: Let's tryagain and we'll keep it simple.
                  I borrow $1m to invest in residential property. I earn $100k in rent and pay $101k in interest.
                  I then have a $1k loss, which I offset against my PAYG earnings.
                  OR
                  I borrow $1m to invest in the stock market. I earn $100k in dividends, and pay $101k in interest.
                  Tell me - do I still get to claim my $1k loss and offset it against my other earnings?
                  So, tell me again how residential property is a 'special' type of investment?

                  • tryagain on 30/12/2022 - 21:17
                    -1

                    @Almost Banned:

                    do I still get to claim my $1k loss and offset it against my other earnings?

                    No, that's the point. (Assuming PAYG as in the first example)

                    • JohnSy on 31/12/2022 - 09:09
                      +2

                      @tryagain: @tryagain.

                      No, that's the point. (Assuming PAYG as in the first example)

                      ???

                      Negative gearing applies to an investment loan for shares just as much as it does for a property. In Almost Banned's two scenarios they are the same financial income outcome (assuming all unfranked dividends).

                      https://treasury.gov.au/review/tax-white-paper/negative-gear…

                    • Almost Banned on 31/12/2022 - 12:10
                      +1

                      @tryagain: You need to realise this isn't a secret and it isn't a surprise.
                      The system was designed this way to:
                      1. promote investment in the residential building sector,
                      2. promote landlords setting rents that LOSE money, and
                      3. the net effect is likely a wash (or close to it) as instead of deferring the annual losses to be offset against the capital gain, they are able to be claimed annually instead.

                      • tryagain on 31/12/2022 - 18:09

                        @Almost Banned: Correct (upto point 3), also not a secret that its a policy that has substantially contributed to the over inflated property market, as it is viewed predominantly as a speculative investment as opposed to first and foremost as habitation. If it was about housing supply, it should be reduced to only new builds, and for a period of say 10yrs at most. Ideally, like many reviews have shown it should be scrapped altogether, but too many people carry on like a baby losing it's bottle anytime it's suggested.

                        • Almost Banned on 31/12/2022 - 21:13
                          +1

                          @tryagain: But housing is an investment, and an investment that governments wish to promote.
                          It requires money to acquire the land, money to pay for the construction, money to pay the holding costs, and money to maintain.
                          Why is it strange that people want a return on that spend?
                          Just like food. Just like medicine. Just like clothing.

                          • Hydralyte on 01/01/2023 - 13:40

                            @Almost Banned:

                            But housing is an investment,

                            It's also a necessity.

                            • Almost Banned on 01/01/2023 - 16:18
                              +1

                              @Hydralyte: As I have already said, so is food, medicine, and clothing - and yet people invest in those everyday without people whining about it.

                          • tryagain on 01/01/2023 - 14:08

                            @Almost Banned: Promote to the point of ensuring supply to those who won't/can't buy, but the policies have been too generous leading to record low housing affordability and therefore need to be rolled back. I think reducing eligibility to new builds and for a max period of say 10yrs for negative gearing should be a minimum.

                            • Almost Banned on 01/01/2023 - 16:26
                              +1

                              @tryagain: You keep using the term 'negative gearing' when you actually mean immediate deductibility of loss against other sources of income.
                              As I have already explained, any investment can be negatively geared in that your income from said investment is less than the cost.
                              The idea of limiting the deductibility to new builds has been discussed and might be do-able - but this issue is already encouraged by depreciation.

                              • tryagain on 01/01/2023 - 19:31

                                @Almost Banned: The term negative gearing has more than one meaning based on the context, in the context I have been using it, I thought it was pretty obvious that it was in relation to the tax breaks the government gives housing investors, these cost the government a lot of money in lost revenue and the existing framework is obviously failing, depreciation isn't making a noticeable effect on property investors.
                                It's time to stop the handout that property investors are getting at the cost of both the taxpayers and those being priced out of the market due to speculative investment.

                                • Almost Banned on 01/01/2023 - 20:17
                                  +1

                                  @tryagain: Again, letting people keep a tiny amount extra of their own money is not a handout.
                                  It is merely reducing the theft.

    • Felixrising on 31/12/2022 - 02:23

      Specifically the capital gains tax discount. All that does is increase attractiveness of speculative residential housing investment, over and above business investment.

      The current policy settings for home ownership have had consistently decreasing home ownership in Australia for over 30 years, we're closer to 60% of people owning 100% of the property which is perverse. Something has to change that trajectory.

      Arguably residential property prices should track with inflation, it cannot continue to consume a greater proportion of our incomes each and every year.

      If property prices and cost of living (rentals) were not being artificially inflated by speculative investors, we would instead be in a situation where 100% of people could afford 100% of the housing stock. There is no reason to argue that the opposite should be true and the current trend should continue. What kind of country are we building?

      FWIW, Germany has strong rental caps and actively discourages speculative property investment.

      • Almost Banned on 31/12/2022 - 12:12
        +2

        But for individuals the CGT discount applies whether you buy a house, a share, or a bar of gold.
        There will NEVER be a situation where 100% of people can afford 100% of the housing stock. It has never existed in any time or any place.

  • Earl of Lemongrab on 29/12/2022 - 11:52
    -1

    It could work… some legal rent price agreement where the cost including any annual increases are laid out across X years?

    • Almost Banned on 29/12/2022 - 14:17

      Plenty of commercial tenancies have these types of clauses - residential not so much.

      • od810 on 29/12/2022 - 21:29

        Happy to sign 5 + 5 year lease with annual increase of 3% for any tenant. Problem is, tenants also want the flexibility of 1 year lease and month on month after.

        I had 5 tenants over the past 8 years, offered all of them 1 year lease after the initial one, only one took the lease and locked in the price (not that i increased rent much in the past 7 years, 3 x $10/week over the period).

        • boirganz on 29/12/2022 - 22:17

          It’s part of the structural problem.

          If you rent to me, but can’t evict me unless you personally move in (or damage, vomit crimes etc in it) you don’t have a key, I do and take care of all the house and am responsible for it - then it’s your asset but my home. If I can afford that but not an entire mortgage, I’m more likely to stay long term.

          You get a fixed return, and I have a home for 5,10,20,50 years.

          This is not a new thing - several countries have rental systems like this.

          • od810 on 30/12/2022 - 00:18

            @boirganz: Yes i was in Germany, and i love how people there just rent and stay in a place for very long time. They have an apartment with 4 walls, no cupboards/kitchen if previous tenants decide to take away with them. But tenants have freedom to paint, to decorate the house as they want (very similar to commercial lease)

            I think it is the mindset of the people regarding rent as well. A large portion of Germans just rent whereas aussies love to own a place and rent is just a temporary thing.

            • Thaal Sinestro on 30/12/2022 - 07:40

              @od810: You need a good pension system to be able to retire and rent. $20,000 AU a year is barely enough to live on if you are a home owner. If you have to rent on a full single pension, you are in extreme pain.

          • Mikeer on 30/12/2022 - 12:51

            @boirganz:

            vomit crimes

            The worst kind of crimes

            • buckster on 01/01/2023 - 10:48

              @Mikeer: I would argue that when it comes from the other end and is used as paint that can be worse…

  • randomusername2017 on 29/12/2022 - 11:54
    +7

    basing housing on the reckless financial decisions of investors

    Who else is going to step in and supply housing?

    The banks and landlords have had decades to tackle homelessness

    Seriously?¿

    • zonra on 29/12/2022 - 12:07
      +10

      The banks and landlords have had decades to tackle homelessness

      Love this mentality.
      My homelessness is definitely not my own problems nor responsibility but others’.
      What do you mean I’m not entitled to that Inner Sydney 4x2 with pool, garage and theatre for $200 a week? Why should I care how much the owner paid for it? Isn’t pool and theatre, like, the bare minimum amenities?
      No, I need a garage! Ain’t gonna park my leased Beamer on the street like some commoners.

      • randomusername2017 on 29/12/2022 - 12:19
        +2

        There's a few gems in that post… but affordable housing mandate for banks and investors is such a novel concept.

        Still not sure if it's serious or just trolling those unscrupulous landlords..

  • CyberMurning on 29/12/2022 - 12:01
    +3

    then we should have another thread "Should Salary Be Capped?"

    • randomusername2017 on 29/12/2022 - 12:21
      +3

      Sequel to the is X/Y profession underpaid series…

    • avoidfullprice on 29/12/2022 - 12:44
      +2

      Time for universal income, food and housing

      Welcome to prison

    • hawkshead on 29/12/2022 - 14:05
      -1

      isn't it?

    • orangetrain on 29/12/2022 - 19:52
      +3

      That is actually already being done indirectly. Look at RBA/past governments trying to suppress wages in the name of tackling inflation while doing little effort for big company profits.

    • Shaddolf on 30/12/2022 - 11:39

      As a nsw teacher my salary is already capped via legislation, which is part of the reason why we have been on strike a number of times this year…

      • brendanm on 02/01/2023 - 12:48

        You were not aware of the pay rate when you started your degree?

        • Shaddolf on 02/01/2023 - 14:18

          I did my degree 11 years ago and the salary was not capped by legislation to 2.5% then, so no. That has happened during my career.

  • Ughhh on 29/12/2022 - 12:03
    +1

    How much does it cost to build a small 3br house these days (not including land), maybe $300k+? Given op doesn't like loans and I assume doesn't have the full cash, can he buy the house at cost? Or will he still need to either take out a loan, or have someone else take on the risk for him?

    • randomusername2017 on 29/12/2022 - 12:26
      +5

      Waiting for the govt to roll out 90% shared equity package, with the remainder covered by Centrelink payments.

      • Ughhh on 29/12/2022 - 16:10
        +2

        Pretty sure people will still complain, until it's completely free.

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