Discussion in 'Property Market Economics' started by larrylarry, 2nd Nov, 2015.
Staying put and therefore keeping their age pensions as well, instead of downsizing and freeing up capital?
Double burden on the young! Both in terms of housing affordability and higher than optimal tax rates required to pay for said pensions.
Yes, people over 50 need to die already to lower inner city property prices!
Will do Spludgey!
My kids won't be old enough to leave home until I'm in my 60s - we live in a different world.
What happened to the lines of thinking: paying rent is dead money (non-deductible) & stay at home and keep buying IPs?
Really?? People are often misinformed when they plan on downsizing and living off the capital. If you own a (say) $800K house and downsize to a $500K house by the time you pay sell costs, buy costs and stamp duty that doesn't leave a lot to retire on. You still need the pension and the money you gain is quickly gone.
I'm guessing your "the young"? Hopefully you are here so you won't be a burden on the upcoming young tax payers.
Include the PPOR in asset calculations for the pension. That should mix things up a bit.
Been saying this for a long time! People have a million dollars of wealth and can still get hand outs from the government
yep, they should be leveraging their wealth instead of sponging off the gov. Biggest welfare cost out there!
This article seems to be a lot about nothing really? We live in Australia, no one is going to tell me where or how I should live my life.
My mother is in her eighties, worked as a kitchen hand most of her life.
Lives on a quarter acre block in the city, worth over $1M. She loves her garden, and has a vegie patch and roses in abundance.
She still volunteers her time twice per week, Vinnies and Church group, thankfully due to her amazing good genes and her Mediterranean diet has helped I am sure.
She lives on the old age pension, even though she has not got pots of money she lives a great life. She has has developers knock on her door many times, but she blows them off, no way is she going to live in a villa, what no garden, that's her joy.
Her plan has always been to pass on this one asset she has to myself and my brother, and I would like to do the same with my children.
Are we not in a free country where we can choose where & how we live?
Every generation whinges how they cannot afford to purchase a freestanding house within walking distance of the Sydney cbd. What's new about that? The convicts couldn't as grants were given to the free settlers.
We know that urban sprawl has to be contained but don't want higher density development in our backyard.
We are a nation of generational whingers.
The article does a poor job at explaining the real issues here. True, except that current policies/regulations are actually having a material impact on how Australians live.
Factors driving 'apartmentification'
Increased urbanisation along with population growth (immigration policy), insufficient infrastructure investment, land supply restrictions (our housing costs seem high in a nation with an abundance of land) and maybe demographics.
While I am not one to whinge and do not believe older Australians should give up their homes, I think there is a legitimate question of fairness when the average tax payer pays taxes in part to fund age pensions to some who are living in a residence (which they would not sell due to PPOR exemptions in age pension tests and high stamp duty costs) that they would NEVER be able to obtain a mortgage or afford to live in.
I thought you were a lot younger than that going by your previous profile picture!
Countries without social safety nets are really crappy places to lve in general.
Strayla is lucky, OK not perfect but pretty bloody good. Social Security is expensive but it makes this country great. Poor old people would be eating dog food if it weren't for the pension.
I follow the belief that the top end of town has to pay more taxes to support the country.
@datto do you know how much 'good' dogfood costs nowadays? Dine top shelf ain't cheap amd there's B all in the can. Some great flavours though - abalone in white wine and rice, slow cooked lamb, spicy chicken livers (great for patè).
Older Australians who downsize and free up capital will become more likely to lose the pension.
Two options here... as has been mentioned above, means test the PPOR and punish those who have worked hard all of their lives and paid off their homes whilst rewarding those who have spent everything they've earnt and never accumulated any assets with a pension OR Find a way of allowing people who own their PPOR to downsize post retirement without having it affect their pension.
How is it punishing those that have worked hard?
Little old lady living in a 2 million dollar house in Malvern vs little old lady living in a $300k house in Melton both receive the same (crappy) pension.
Little old lady #1 can sell her house, move somewhere cheaper and live like a queen for the rest of her life.
Little old lady #2 is stuck on the pension.
People need to stop looking at being too rich to be given a pension as a "punishment". The pension is supposed to be there to support those who need it, it's not a free hand out given to everybody who makes it to retirement age.
Stop sponging off the government and look after yourself if you have the means.
How did little old lady #1 come to own a house that is worth 2 million whilst little old lady #2 only owns a house that is worth $300K? Was it entirely luck or was there some additional hard work / risk taken along the way.
Good on her.
I was going to say, $1M only gets you an average house in Sydney, it's not like they're rich.
Separate names with a comma.