Negative Gearing

[casstony]

It seems that hardly anyone takes the time to understand how markets are manipulated by the rich and powerful in order to relieve us of our savings.

Thus we the sheeple will continue blaming one another for our woes, watching tabloid current affairs shows, giving our wealth willingly to bankers and then fight their wars for them when it all turns to sh_t.

When I was young I was protected from my own inexperience and greed via much more strict lending regulations than we have today. Before blaming the 'have it all now' generation consider who enabled them to get into so much debt and who fostered the notion of getting everything you want. It's all too easy for those of us more fortunate to smugly say people are victims of their own greed or incompetence without looking at the big picture.

[tlgerdes (Trevor)]

They aren't victims of their own greed and incompetence, they are slaves to it.

[Stardrifter_WA]

Originally Posted by xelasnave

Also ..do you think a falling ozdollar will slow money from overseas investing in real estate

Can't see why it would, as it would make it more attractive, in my view. As our currency falls, their currency rises, thus, they have more buying power, just as we have less.

[xelasnave]

Originally Posted by Stardrifter_WA

Can't see why it would, as it would make it more attractive, in my view. As our currency falls, their currency rises, thus, they have more buying power, just as we have less.

Absolutely correct.

[Nikolas (Nik)]

Negative gearing is not the reason property values are up, cashed up Chinese investors, who are not even citizens have smashed the property market, especially in the metropolitan areas.

[Merlin66 (Ken)]

+1 from me Nick...
I've just sold in Maribyrnong....

[Kunama]

Originally Posted by Nikolas

Negative gearing is not the reason property values are up, cashed up Chinese investors, who are not even citizens have smashed the property market, especially in the metropolitan areas.

We just spent quite some time finding a house for our daughter, each and every time we attended an open house there were a number of Chinese buyers in attendance. Whilst it certainly is not the only reason, I do believe it to be a big part of the price escalation over the past five years.

On two of the houses, my daughter offered the full asking price only to be outbid by Chinese buyers. Thankfully we found an honest vendor who stuck by the deal he made with us and turned down an offer by yet another chinese buyer.

I have now got to the stage where I can't stand all the hassles of tenants, agents, complaints etc and am selling off all properties bar our home. Time to buy some more toys I think !!!

[AndrewJ]

Whilst not technically a negative gearing effect, in my area, there are now local property brochures in chinese only, and IIRC, there was one auction reported to the govt recently, as much of the auction was actually carried out in chinese.
As i mentioned in an earlier thread, the reasons certainly vary, but from what we are hearing, many of these buyers dont really care what they pay, and dont plan to use the property, they are merely buying an address that gets their kids access to a school system.
Locals cant compete with cashed up people prepared to do that.

Andrew

[Kunama]

Originally Posted by AndrewJ

Whilst not technically a negative gearing effect, in my area, there are now local property brochures in chinese only, and IIRC, there was one auction reported to the govt recently, as much of the auction was actually carried out in chinese.
As i mentioned in an earlier thread, the reasons certainly vary, but from what we are hearing, many of these buyers dont really care what they pay, and dont plan to use the property, they are merely buying an address that gets their kids access to a school system.
Locals cant compete with cashed up people prepared to do that.

Andrew

I had an agent tell me exactly that recently in Canberra

[xelasnave]

So we seem to have pressure from overseas buyers and yet negative gearing is presented lately as the scape goat..interesting.
Who with power wants to see negative gearing axed.
Note also real estate is perhaps the only way an ordinary person can control his or her investment. How many times have I heard investment advisors say real estate investment is no good and provide figures to show they are right.
No more clues it's more fun if you work out what's hsppening

[AndrewJ]

Gday Alex

So we seem to have pressure from overseas buyers and yet negative gearing is presented lately as the scape goat..interesting.

Not sure they arent intertwined in many cases.
The recent hoo haa over Goughs old house highlighted that overseas investors can buy existing property, as long as they demolish and rebuild within 2 years. However, if i understand it correctly, if they buy "new", there are no restrictions. Smalltime "developers" then use negative gearing ( and whatever else their accountants can come up with ) to put up multi apartment developments on single house blocks, and then sell "off the plan" to overseas clients, who will pay top dollar.
That means the developer can pay whatever is reqd to get the old properties, as they know they will still make a handsome profit at the end, and the govt will offset a big chunk of their upfront costs.
For people who just buy a second property etc and rent it out, and use negative gearing as part of the process, they dont really affect the market as much as people out to get cash from both sides.

Andrew

[Nikolas (Nik)]

Originally Posted by lazjen

As a wage slave, negative gearing is one of the few reasonable ways I can help prepare myself for a retirement that is comfortable. Anyone planning to retire in about 20+ years should not expect much in the line of a pension (it's not going to be possible for the government to fund it), so you've got to look out for yourself and your family.

Negative gearing can be used for more than just property - I actually use it for a managed portfolio (shares, etc), since we now own our home -and that was achieved by some sacrifice and compromise over a number of years. This investment will help boost the superannuation at retirement and relieve the need for a significant pension.

So, I'll be quite annoyed if negative gearing is messed up - I'm not some rich person that we'll be able to survive on just superannuation and whatever meager pension remains.

What other options are available? Not everyone can have a flash, high income business and be able to tax write off many things.

Look at other options to fix house availability and pricing instead of messing with negative gearing - one example: improve decentralisation - get some businesses out of big cities to regional areas. People live where the jobs are, so you can change the nature of the supply and demand on housing in this manner. The problem with doing that is that it's well beyond the thought processes and capabilities of our politicians to handle such a concept and to plan and implement the many necessary steps/items required to achieve the outcome.

^^^^

This!!!
I'm at that point of looking at retirement in 10 years or so, my super will not be enough to live on so we are looking at a proeprty to invest in as an income supplemental. If they do away with this they will be done away with mark my words.

[Stardrifter_WA]

Originally Posted by Nikolas

Negative gearing is not the reason property values are up, cashed up Chinese investors, who are not even citizens have smashed the property market, especially in the metropolitan areas.

Well, at the least money is flowing into the country and not out of it, for a change. The more money people have to spend, from the sale of their property, the more it remains in circulation. If I could sell my property to a cashed up Chinese investor, I would build a smaller place and buy a new car, from the extra capital that I would have realised.

[Kunama]

Originally Posted by xelasnave

...... How many times have I heard investment advisors say real estate investment is no good and provide figures to show they are right........

I think anyone can provide figures to prove themselves right, if they have the right motivation.

[Stardrifter_WA]

Originally Posted by Kunama

I think anyone can provide figures to prove themselves right, if they have the right motivation.

The old adage is still probably true "Lies, damned lies, and statistics".

[Kunama]

Originally Posted by Stardrifter_WA

The old adage is still probably true "Lies, damned lies, and statistics".

Did you know the average Australian has one breast and one testicle ? There's some statistics for you

[xelasnave]

I recall an advisor showing how if one invested in various shares you would have done exceptionally well. Much better than his hypothetical real estate approach.
So easy to build a successful portfolio in retrospect.
No mention that even a blue chip could go belly up.
The investment market does not like the idea of folk investing in real estate as that means less opportunity for their business.
That is where I suggest we may find an attempt to influence public opinion...making mon and dad real estate investment less attractive will see money move to this growing sector.
Keep your ears open to see if there is more news about negative gearing in the immediate future.

[Stardrifter_WA]

Originally Posted by Kunama

Did you know the average Australian has one breast and one testicle ? There's some statistics for you