What will you do when/if negative gearing goes?

Sort of like bonuses at work, never account for them and then anything you get is exactly that, a bonus

 

I can just picture them saying how Uni is too expensive - and then trying to justify the need for a Uni education in the next breath.

 

Yep; still in Drug-mana.

We have been watching r/e since we moved out of the old place, and we spotted a house in one of our short-listed streets down by the beach which would like to eventually buy in.

It came on the market (on the r/e website) at 4.00pm on Dec 29, we spotted it at 4.40pm, called the agent straight away, had an inspection at 10.00am the next morning, had signed and bought by 12.00pm Dec 30.

It's an old 1950's clunker holiday home; no doubt filled with asbestos, but on a 795m block....huge demand for these blocks for townhouse developments down here these days; especially down on the flat near the beach and shops, so to snare it was a bit of a win for us.

The timing was perfect; very hot day, everyone down at the beach - not looking at r/e - we saw it, we offered immediately and near the asking price - no mucking around and low-ball garbage - and got it before anyone knew what was going on.

We were a bit surprised it wasn't listed for auction as most of these development blocks are now down here, but there you are.

Very lucky (or do you create your own luck?)


.

 

The whole "get rid of Neg Gearing = rents rise" is a myth.

 

Yeah; don't worry; my financial head says to do the townhouse development (assuming we could even finance the build etc), but the on-sell of the block for a profit wouldn't be that good after such a short time - afgter all the buy/sell costs and CGT, etc, plus we have been pegging these few streets as the next location for the next PPoR - the emotional head has won on this one.

 

I actually saw this exact article & wow was it a terrible piece of journalism.

They were comparing what a tradesperson charges hourly vs what a white collar professional gets paid hourly, which is two entirely different things.

The stupid part is that for most of the white collar professions, they could have listed an hourly billable too, because even if your accountant/lawyer/whatever is only getting paid $30/hr they are probably being billed at $150+ to cover all the operational expenses.
Likewise plenty of tradespeople are just employees making $50-60k, even if they are getting billed at $100+/hr.

 

Why would you think it's a myth?
It happened last time they tried it.

 

I received this from an agent I have dealt with on a few occasions.

The Real Estate Institute of Australia backed by the Real Estate Institute of Victoria (REIV) have recently launched a media campaign calling for the retention of negative gearing.
'Negative Gearing Affects Everyone : Your Voice Counts' is designed to dispel myths surrounding negative gearing, draw attention to the potential economic impact of changes to the current policy and promote the need for a comprehensive housing approach.
The REIV have urged members to share the campaign video with clients, so please click on the below link to view the video:
www.negativegearingaffectsyou.com

Any real truth here or is it opinions to scare the masses?
Cheers
PP

 

We'll see........

 

Noice....

 

Just as get rid of neg gearing = property prices always falling from now on and somehow these people who can't or have not bought in the past will have some fantastic new opportunity.

But in tighter rental markets if investors do in fact pull out or drop off, then rising rents will be a fact, most landlords probably get what they can.

I did not watch the spiel, but you do not have to be that bright to see the economy is not going all that well & hosing off one of the areas that has been travelling well at this point is not too bright an idea.

When Abbott got in is when APRA should have made changes and limiting or cutting NG.

 

We must be going well, we've got $50 billion to chuck at some submarines we don't need.
That's only $2k for each person in Australia apparently.

 

Angel, I think that this situation could do with a win-win outcome.

Dept of Educ assistance with a Tassie business (Blundstone: Boots, Gumboots, Footwear, Work Shoes & Accessories : Home), and you and your colleagues getting an allowance for the purchase, should assist with the counselling of said son, and possibly the stoner dad as well.

Disclaimer: I have no association with this business.

 

Please stop repeating this myth. It's been discussed and disproven many times.

 

Make of it what you will... but the data says its much more complex than that... and if "it happened last time they tried it" or "we'll see" is the whole foundation for an argument this complex , its just not going to cut it.

The data ( sometimes called the facts! ) tells us ;

Perth rents rose a significant amount DURING the period neg gearing was abolished... ie 1985-1987 but it's very important to note that Perth's rents were already accelerating BEFORE neg gearing was abolished..... So, off to a really good start to support the urban myth about neg gearing. Right out of the gate the argument is getting a bucket load of ABS data support from our Perth friends..... but I'm afraid that's where it all stops. You see, no other city had rents behave this way... none. Perhaps if the Perth trend - or even something remotely, vaguely, kinda, sorta, maybe similar had been repeated in even just some ( not all) of our other capital cities, there'd be something to this urban myth about rents increasing wildly everywhere when neg gearing was abolished... but ...um, no.

Sydney tried to get on the Perth train... it really did.... it's rents did rise a little, but the Sydney train ran out of "puff" very quickly and rents fell a little between late 1985 and 1986, and they only really started an upward trajectory again in 1987 , and only really took off ( ironically) AFTER neg gearing was reintroduced... stay with me here, the irony doesn't stop with Sydney.

Similarly in Brisbane rents fell...then flat lined, then rose a little, then fell again, then flat lined again and eerily, but still ironically, Brisbane rents only really started to grow - you guessed it - AFTER neg gearing was reintroduced. It's head scratching stuff, isnt it? But look at the data, by 1988 , 1 year AFTER the reintroduction of neg gearing, which means long after the rents should already have bolted skywards from where they were in 1985 , Brisbane rents had gone up, down, sideways and landed back right where they started - at 1985 ( pre removal of neg gearing) levels.. and it took until mid 1988 for those rents to start accelerating... wait for it................... well AFTER neg gearing was reintroduced in 1987. So as much as they tried, the good Brisbane folk , just like the Sydney folk , just weren't able to jump on the Perth train nor add anything of value to the urban myth, either.

Same story for Melbourne and Adelaide, by and large... ie no Perth like increase in rents between 1985-1987 when rents supposedly shot up up up up up..... nothing even vaguely resembling it in fact. In fact, in all cases except Perth, its pretty fair to say that ABS data tells us that rents barely moved during the period between 1985-1987 when neg gearing had been abolished . Now how this has perpetuated itself over 30 years into an argument that says "rents will skyrocket"... seems to defy logic... but there you have it, for your consideration.

Now, I did ask you a couple of paragraphs back to stay with me, so here 'tis.... Ready?
If I wanted to be facetious, I'd actually start a reverse negative gearing urban myth that goes like this. The irony is that the reintroduction of neg gearing in 1987 , rather than the removal of neg gearing in 1985 , drove rents UP After all, the ABS data seems to support that argument far more comprehensively than the opposite argument .. everywhere but in Perth, of course

And if I wanted to be especially facetious.... I'd suggest that maybe WA should secede from the Commonwealth and abolish neg gearing, so all of us with investment property there can enjoy some dramatic uplifts in our rental yields????

As I said... it's a far more complex issue than many forum members comments, suggest. But whichever way it goes, and however you personally feel about it, lets at least try and understand the data before shooting urban myths from the hip.

 

Im so confused reading this post and graph...im gonna have a shot of johnnie walker blue label.

 

At the time, their argument for the reintroduction was that they had introduced CGT, so neg gearing was allowed /reinstated ...

Then JH reduced CGT by 50% later.... and the whole game changed again....

 

slit my wrist... that's a joke