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