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79% of Investors Would Abandon Property if Negative Gearing Scrapped

Discussion in 'Property Market Economics' started by RPI, 28th Apr, 2016.

  1. RPI

    RPI Property Lawyer, Town Planner Business Member

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  2. Barny

    Barny Well-Known Member

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    If this does happen, can someone please tell me where to invest my money in shares? As this will bubble and I would like to get in before it does.
     
  3. emza

    emza Well-Known Member

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    Talking their book...

    93% of loans were to buy existing homes. Investors leaving this market doesn't mean those homes vanish, so no rising rent.

    Wonder if the 14% difference is investors who develop/renovate?
     
  4. MarkB

    MarkB Some guy on the internet Premium Member

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    REIQ Chairman Rob Honeycombe said the findings of the survey sent to more than 14,000 members confirmed that changes to negative gearing would be disastrous for the Queensland property market.

    "We now know for a fact that 79 per cent of respondents will get out of property and find an alternative investment strategy that works more effectively and yields a better return," Mr Honeycombe said


    So they had a 100% response rate?

    That's never happened before in a survey.

    Nor do we know what question they asked (whether it was a leading question or even factually correct as to the possible law changes under an ALP government).

    But hey it was an REIQ survey - of course it wasn't skewed.

    And that's the thing...

    Taking new builds (new supply) out of the equation - the stock of housing does not change.

    The people who rent now will still need a place to rent under an ALP government - either that or they buy a PPOR (zero sum game).

    And why would an investor sell an existing IP that is eligible for NG and isn't impacted upon by the changed law? (knowing that the new law from 2017 will only apply to new builds)

    To me probably the only thing we do know for a fact is that the REIQ is running scared.
     
    Last edited: 29th Apr, 2016
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  5. Peter_Tersteeg

    Peter_Tersteeg Finance broker and strategist Business Member

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    I'm reasonably certain that the number of property investors that hold a portfolio that is overall negatively geared is substantially less than 79%.
     
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  6. Nick Valsamis

    Nick Valsamis Well-Known Member

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    If as a result, people sell their property to buy shares then they have no idea what they are doing and you shouldn't follow them.
     
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  7. Barny

    Barny Well-Known Member

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    I have no idea what I'm doing in property but still made money. Same same
     
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  8. sash

    sash Well-Known Member

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  9. gman65

    gman65 Well-Known Member

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    Why do they even print this rubbish?
     
  10. larrylarry

    larrylarry Well-Known Member

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  11. Joynz

    Joynz Well-Known Member

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    Actually, nothing is wrong with Honeycomb's statement. He is referring to the 79% of respondents not 79% of investors.

    However, though there may have been 14,000 respondents, it is not a random, weighted survey (so we don't know if they represent the actual population of property investors) so he would be wrong to extrapolate to any group outside the group of respondents.
     
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  12. C-mac

    C-mac Well-Known Member

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    I don't want to comment on the credibility of the data, the methodology etc., but the inference that large swathes of investors will 'abandon ship' from EXISTING properties they already own, pre-Jul-2017, sounds a bit ridiculous...
     
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  13. Player

    Player Well-Known Member

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  14. samiam

    samiam Well-Known Member

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    selection bias
     
  15. C-mac

    C-mac Well-Known Member

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    And by the way, if labor get in and the policy enacts, I believe there will still be opportunities for property investors. Just different kinds of opportunities.
     
  16. barnes

    barnes Well-Known Member

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    That's different. In property there is basically nothing to know, buy and hold. Your profit will be made by inflation and cheap credit. In shares or trading as a whole - you got to know what you are doing. The knowledge can come only after years and sometimes decades of practice.
     
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  17. Barny

    Barny Well-Known Member

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    I can see it now. It'll be just like the lead up to the 1929 stock market crash. Everyday people with no idea how to invest but they did. Australians will do the same.
     
  18. barnes

    barnes Well-Known Member

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    That's correct. When an average housewife tells you the difference between swap and spread it's time to get to the sidelines ASAP. :)
     
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  19. sash

    sash Well-Known Member

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    Not unusual for the CBA...their claim to be the most unethical bank is true!

    They seem to have scandal after scandal!!
     
  20. ollidrac nosaj

    ollidrac nosaj Well-Known Member

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    I don't agree with the policy but couldn't agree more with this statement.

    Its not just ordinary mums and dads, the performance of "some" so called professional fund managers also leaves a lot to be desired.

    I agree "trading" can take a long time to master, and very few do, But "investing" in markets can be quite simple. If you can grasp the concepts of property investment you are more than capable of share investing. A buy and hold principle can also be applied to share investing. An easy strategy for those wanting to make the step into shares is using ETF's. By setting up a simple/diversified all ETF portfolio, holding long term and applying a dollar cost average strategy.

    This strategy is currently being put to the test by W. Buffett who has bet a Million dollars against some fund managers that buying the market through a single ETF (S&P 500) will beat an active stock picking strategy. The term of the bet is over a ten year period and Buffet is well ahead so far.
     
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