Time for the Baby Boomer to Pay Their Way.....

Well done @wilso8948. I agree with you. Many people here don’t like anecdotal stories but for me they are the real stories. Data mining and statistics can be turned into anything you want. I have many young people in my world with similar stories to yours and they are doing well too. Only one of them has bought in Sydney because that is where the live and work. The rest are north of the Hawkesbury River where things are cheaper. You just have to have a go! Good on you! All the best to you and your young family

 

So that’s the cash rate, where’s the interest rate chart? It’s at least a couple % higher than that.

I’m kind of looking forward to a recession, as it doesn’t seem to effect property as bad as you would like to believe, sure things may slide in some parts or go flat but it will almost reset things and give a baseline, it will present a bunch of opportunities and I think we will be able to create incredible wealth through it.

 

I disagree believe it or not. House price prices in that time far our weighed interst rate rises. Buying and selling in that time would have made you a fortune. However, they did so at the cost of the current economic situation where the millenia old principle of being interest being charge to borrow money is an ancient idea. Doesn't sound healthy to me.

 

Why does it need to be healthy? Most of us are trying to make money, using the banks money in this little game we call investing so we can have holidays and tell our boss to shove it. I could’ve give 2 cents if it was healthy, moral, or anything else.

 

Yeah and that would still put it under 10% for the bast majority of the 90s till now.

I completely agree, there will be opportunities abound. It needs to happen ASAP. The band aid needs to pulled off. 30 years without one is just economically ludicrous.

But it's certianly not clear the impact it will have on property. I suspect they will be hit harder because the Australian economy doesn't do much else. Relatively speaking.

 

I understand compeltely. But if it's not healthy, it will all come crashing down eventually, and overleveraged investors will be ruined. There will be a generation of greater fools eventually who are left holding the bill.

 

To give balance to the “debate”, another sooky boomer giving us boomers a bad name :

Category: | The Courier Mail

 

If it makes you feel better, I'm in agreement with you. The "OK Boomer" meme is tactless and weak, and a weapon that the progressive millennial types have resorted too because they can't articulate their argument any other way.

With that said, I also don't get the guy labelling himself a "proud boomer" in the article. When your born is when your born. It's a function of cosmic happenstance.

 

Don't you just love it when some newbie comes along & tells you that what you did, just didn't add up. You weren't around back then, there's a lot you don't know & obviously don't want to know.

 

This is a thread about baby boomers paying their way. You don’t make suggestions as to how this might happen. How to you suggest we move forward?

 

It's spread across two threads at this point. But by all means, challange the statistics.

Remove negative gearing

Don't waste our time with the current FHB scheme

Don't lower (or increase) interest rates

Less governmental intervention in the property market. Let's see how capitalist property investors really are then.

High speed rail between Sydney and Newcastle

And do what should of happened 10 years ago and head into a recession

 

Interesting list..
With the recession as no market exists in a vacuum ,it competes with every line-up for the available supply of funds and anyone walking around any business area in Australia that stops looking into their mobile phones for a few minutes would see full well we are already in recession by all the for lease signs, but that's not happening in Property Brisbane just from the vcv's over the past rate-able and that will keep going with sober regularity..
With the rest of the list maybe Bill Shorten as he is far more cunning then his colleagues as he is started to surface in the media again and talk will fix the problem like he stated prior to his failed start xxxxup..

 

Ok now we are not so far apart! I know you do not like anecdotal stories but statistics for me are too wide a brush. They dump me in a bucket I do not always belong. Taking your points - Have never negatively geared anything although we do own more than one property. Only ever borrowed for our PPOR and cash for others. (I know many here will shake their heads but it was a personal informed decision). Never had a FHB grant. Paid 17% home loan rates. I am happy for the government to stay out of the property market. Again from a selfish view point a high speed train from Sydney to Newcastle would be a dream. I made the commute again yesterday Newcastle to Randwick (POW hospital) best I can do when trains and buses line up is just over 3hrs each way. Miss one and its at least 4hrs.

 

"Remove negative gearing" - As 1/3 of all dwellings or 3.7m are rental stock, removal of negative gearing at this stage would have an adverse effect and actually punish the demographics renting trying to save for a deposit, by pushing rents up I believe. This has been modelled by PICA and found though the initial tax benefit in early stages is around $30k on average, a property investor will end up paying an average of $167k over the life of the owned property, the modelling suggests a NET tax payable by $138k under current rules, add stamp duty and land tax to this and its a massive hole in the govts budget. CGT also brings in massive amounts of revenue. Labours proposed changes would cost the govt 32 billion according to the modelling. Property prices would drop eroding most of Australia's wealth overnight, and rents would rise, is that the scenario you want?

Don't waste our time with the current FHB scheme
in align with the above, the FHB scheme at least allows a few to get on the ladder without drastically hurting 70% of Australia's wealth.

Don't lower (or increase) interest rates
I agree with this, there's only so much more left in the gun. I can see the RBA's position as they are between a rock and a hard place with the current Govt. They have a mandate, and are doing only what they can in their own power. We need govt spending, not lower rates. (I will add im not complaining that my interest payments have dropped dramatically in the short term allowing me to pay off more debt)

Less governmental intervention in the property market. Let's see how capitalist property investors really are then. This would need to go both ways, no Govt intervention in any form. Not just cherry picking the issues that don't suit.

High speed rail between Sydney and Newcastle.
Why only Sydney/Newcastle? Because you live there? ​

 

High speed rail would open up Sydney massively (40 min commute). Create jobs and improve affordability. We will need to create another city centre at one point anyway.

 

You changed your points here. But to clarify

1. You were the one who suggested paying cash...i was just making fun of you for saying it.
2. Starter homes a while back were much closer to the city with much less travel time than they are now.
3. Often only one parent worked. That's not the case.


also, anyone who talks about inheritance. The potential of inheriting money from their parents is not what the younger generation want. They dont want to inherit money, they want to inherit opportunity like the boomers did from the greatest generation.

 

I can solve that problem for the younger generations.

Get all their relatives to change their Wills and nominate me as the sole beneficiary .

Another problem solved by a Boomer .

I will PM you my full details .

 

If the prices dropped overnight, the renters wouldn't need to save as much. Though I can't see that happening with the current excess supply. It's a fair point though. I'd have to take a deeper dive into the modelling, I could change my mind on this. Though it's unclear why the most expensive property market in the world is subsidising property.

I see it more as property developers bail out. The property caps are ludicirous:
Sydney = $700,000​

Melbourne = $600,000

This will buy you a 2 bedroom apartment, in pretty average areas mind you. Would you invest in any of these apartments? This will just be creating more debt. With what I wouldn't be putting my money into these expecting capital growth.

As an aside, if you can't save up at min 70k, I don't know you should be taking on a loan. And I definitely don't think the taxpayer should be put at risk.

BUT the fact that so much of Australia's wealth is in property is my main issue. At some point, one generation will need to change that, or the system will self correct. Exposure to risk is catastrophic.

Common ground!

I am absolutely on board with smaller government. But I believe the most expensive property market in the world should need no help from the government. If the fundamentals are there after all. Doesn't seem like a wild idea, still shocked that not wanting the government to sustain a market is a socialist idea? Not sure what they think socialism is.

​

Nope. Seems to be the most logical choice given distance and population clumps. Could make the argument for Sydney to Canberra. Probably a few other options.

 

Well....that is if we don't spend it all first, right?
Although I am still in Gen X very close to boomer, spouse is Boomer.