79% of Investors Would Abandon Property if Negative Gearing Scrapped

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

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  1. Whitecat

    Whitecat Well-Known Member

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    To me that figure seems exaggerated. I don't have any evidence to back my claim up but it just seems too high
    Maybe it's easy to express that sentiment in a survey but in reality would they be exiting or would such a huge percentage be absolutely turned off property? I think it will still remain an attractive asset class for many people even if the numbers are not quite as good as before. Lots of people don't like shares and also people like to diversify their investment.
     
  2. C-mac

    C-mac Well-Known Member

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    Interest in ETF's could ramp up a lot if labor gets in.
     
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  3. Barny

    Barny Well-Known Member

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    I think people don't like them as they don't understand them. But imagine for a moment people like daphne boholt take a moment to structure a package for mum/ dad investors. Daphne boholt's will pop up everywhere. Wow, thinking about what I wrote, I bet some are already structuring that package.
     
  4. Whitecat

    Whitecat Well-Known Member

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    No doubt people will become more interested in shares generally and more prepared to take a risk and learn more about it and get involved and perhaps shif their emphasis. Yes if the change does come in there will be new markets and new businesses helping people ease into that.
    However property will still stay as an attractive asset class just as it's an attractive asset class in every single country of the world pretty much. It has its ups and downs but generally investors want to have some exposure to property.
    I don't think this negative gearing changes are enough to change that in reality by 79%.
    I'm not trying to comment on whether or not I think they are good changes or not I'm trying to stay out of that debate but I don't think that 80% of people are going to flee and if they do they will come back.
     
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  5. ollidrac nosaj

    ollidrac nosaj Well-Known Member

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    Always has been,always will be. If the policy were to come in i cant see it having any real impact on investors already in the market, i certainly cant see the case for anyone abandoning any current investments. My concern is there might be unintended implications to this policy down the road. When you pull levers in the economy such as this, it rarely functions in isolation.

    Too true, a lot of people are misinformed on the subject. What little they do know is the usual BS they hear around the BBQ over a few bevies, or the sensationalist tripe delivered by the media. Think about some of the misinformation you have heard in the past from these same sources regarding property investment! :rolleyes:

    For example a lot of fellow property investors i speak to have no idea that you can invest in property through the share market. By buying shares in "a-reits" for example: Generation Healthcare, Mirvac, ALE property group, Scentre group, etc. As i have mentioned above you can
    also take the ETF rout and just buy exposure to the entire commercial property sector eg. in Australia asx code "VAP" (vanguard listed Australian property) or why just limit yourself to Australia you can invest in property globally just as easily through asx code "DJRE" (Dow Jones global real estate fund).(these are not recommendations just examples)

    My point being i don't think there is going to be a rush out the door of property, and equity investment is not tailored to everyone's personal investment philosophy. But i think if you don't spend the time educating yourself about the asset class you are doing yourselves a huge disfavor!
     
  6. larrylarry

    larrylarry Well-Known Member

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    I've started reading ETFs in other threads. Sounds fascinating so far.
     
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  7. Waterboy

    Waterboy Well-Known Member

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    If this happens the bank shares will tumble big time. And a recession is likely to follow.
     
  8. Waterboy

    Waterboy Well-Known Member

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    I think properties bought after a certain date will be grandfathered (ie still allow NG). And only newly constructed properties will allow NG. That's the ALP plan anyway.
     
  9. piN00b

    piN00b Member

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    Who will buy those abandoned properties? Or will they give them away for free?
     
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  10. Ted Varrick

    Ted Varrick Well-Known Member

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    A number of your fellow posters, one would suspect. And if they gave them away for free then Bunnings would probably need to initiate a recruitment drive for a large amount of new staff...
     
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  11. spludgey

    spludgey Well-Known Member

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    Poll time?
    I would love it if it was anywhere near half, as with the properties that I'm going for, I'm always competing with other investors, never with owner occupiers.
     
  12. Gen-Y

    Gen-Y Well-Known Member

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    If negative gear goes, it will only push the investors to fight for the FHB properties.
    That's going to be fun... future slum-lords mixed in with FHB - area for fireworks.
     
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  13. wogitalia

    wogitalia Well-Known Member

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    If that's the reaction to dumping negative gearing I'll be gobbling up all those properties like there is no tomorrow when it happens but that's a pipe dream because it flat out wont happen.

    Sensationalist ******** is what that article is.

    79% would have to include people dumping their positively geared properties as well and if the negative gearing is all that makes your investment profitable long term in the first place then you've got far bigger problems.
     
  14. Sackie

    Sackie Well-Known Member

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    OMG seriously......seriously....??
     
    Last edited: 10th May, 2016
  15. barnes

    barnes Well-Known Member

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    Yep, never did anything. Even rented out only 2 properties ever. All the profits received because of inflation and cheap credit. Property investing can be done by anyone with some common sence. Trading shares, forex, cfd's, optons profitable - can be done only by VERY educated individuals.
    That's why there are a lot of wealthy property investors (it will end soon) and a very small number of profitable retail traders, less than 3%.
     
  16. Sackie

    Sackie Well-Known Member

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    @barnes how do you know all those wealthy property investors became wealthy by, in your words "cheap credit and inflation"? What makes you think there is basically, in your words "nothing to know" about being a successful property investor??

    I cant speak for everyone but the most successful property investors I know personally are the ones who:

    A) Have a good understanding of state cycles
    B) Have a good understanding/leverage off financial/legal experts to structure their loans optimally in order to grow their wealth substantially
    C) Have a good understanding and practical ability to apply thorough Due Diligence of Key Growth drivers in targeted areas, thorough due diligence in demographic of areas, due diligence in supply/demand, Due diligence in targeted dwellings and cross suburb comparisons to identify value areas.
    D) Are able to understand and take key stats into account such as vacancy rates, discounting rates, SOM
    E) Are able to identify value adding deals where they are able to manufacture equity through cosmetic/structural renos, subdivision, development, using options to flip.
    F) Spend some time to improve their negotiation skills
    G) Understand and able to apply risk management measures across their portfolio such as contingencies, mixing fixed vs variable, applying the right mix of negative, neutral and positive properties to achieve the fine balance necessary for their portfolio to be sustainable in the short-term while offering every chance to deliver strong growth in the medium to long.

    That's doesn't sound like not much to know......
     
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  17. barnes

    barnes Well-Known Member

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    Hey Leo. What is property investing to you? It's your job - right? To me it WAS only a hobby. I never paid any attention to all that you are pointing out especially B, F and G - waste of time in my book. I only look at macro economics and that's enough to understand what, when and where for a hobby and get great results.
     
  18. Sackie

    Sackie Well-Known Member

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    But you've said, " In property there is basically nothing to know, buy and hold. Your profit will be made by inflation and cheap credit". You've made that as a general comment applying to property investment as a whole and haven't mentioned that you see it as a "hobby" which is your personal approach.
     
  19. barnes

    barnes Well-Known Member

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    Yes I have said it. You need all those time consuming things to make a profit, but without inflation and cheap credit you will not get anywhere, because if the market doesn't go up you are stuck.
    If the market goes up you will have capital gains anyway, it doesn't matter if you are a top professional or a part time hobbyist. If the market is falling you face the same fate, you will make nothing in any case.
     
  20. CosmicTrevor

    CosmicTrevor Well-Known Member

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    I have to agree with Leo on this. To suggest that there is nothing to it, just buy and hold is akin to throwing money on a roulette wheel. I think you may have lucked out with your acquisitions and good on you. Having said this, I do agree with the overall principle of buying and holding, but there is so much more to it that you are dismissing - particularly in relation to property selection.

    Markets are imperfect, they don't move in predictable ways. Macro markets - such as states, regions and cities are reasonably simple to define & select, however micro markets - (suburbs, locales within suburbs and streets) are entirely different.

    To me the terms investing and hobby don't really belong together, unless you have so much money that losing all that you invest is immaterial.

    For investors just starting out I'd take the advice in the quote above with a healthy dose of salt.