Will there be a Investor sell-off before this years Election..

I could be wrong but I think NG does not have much to do with public housing, i believed it exist since the 30s on all assets to deduct cost of doing business.if it was to provide public housing, it s a fail nowadays since well over 90% investors are buying existing dwellings (from ~20% in the 80s) and add FA supply.

 

Negative gearing - Wikipedia

 

While it is true that negative gearing was available from the 30's, it has only been available in it's current form since 1987.

In 1999 the Howard government abolished the indexation and averaging provisions for Captial Gains Tax and replaced them with a 50 per cent discount.

In terms of public housing:

"From 1945, state and territory governments, financially supported by Canberra, maintained public programs that built 8,000-14,000 dwellings a year for half a century.

From 1996, however, social housing largely slipped from the Australian government agenda. Dedicated ongoing funding to states and territories was at “starvation levels”."​

Current construction of social housing dwellings is little more than 3,000 dwellings a year.

Australia needs to triple its social housing by 2036. This is the best way to do it

Investors buying existing dwellings might add sweet FA to housing supply but it does provide more rental stock, giving renters more options for renting.

Also, I'm not suggesting that NG is the policy response. There is also NRAS, NAHA and rent assistance. I note that NRAS and rent assistance rely on the private sector providing the rental property and the federal government subsiding the cost.

The reality is that the government is constructing barely more than 3,000 social housing dwellings a year and expecting to private sector to pick up the slack. It is also a fact that the government provides financial incentives for the private sector to provide rental accommodation.

 

yeah but without added supply it does effectively "sweet FA" beside pushing prices of existing dwellings up (and therefore increasing the debt loading necessary to purchase a dwelling).

This was quite a serious misallocation of resource for the country we would have been better of if all these non-productive "investments" on existing dwellings had been diverted on more productive/innovative businesses instead.

 

That's a completely different argument for a different thread and has nothing to do with negative gearing. The exact same "malinvestement" in real estate happened in Ireland, UK, Canada and the USA to name a few, and none of those countries have negative gearing. Whether or not the financialisation of the housing market has resulted in a serious misallocation of resources is a question for another thread.

 

not really, In my view NG on new dwellings could make sense, on existing no so much

 

Well certainly any smart investor would buy existing stock rather than new stock. Existing stock is better value, and we collectively want to reduce urban sprawl. Urban sprawl was all the rage in the 70s and 80s but not so popular these days.

 

Exactly I never bought new, the figures never stacked up

 

I don't have a crystal ball but living here for the last 40 years I have noticed we had a lot happen all over the world, yet why are the prices of Oz property where they are?
E.g. We had market crash of 1987, Asian financial crisis 1997, the Tech Wreck 2000, the GFC 2008, we had many governments change, rules and laws and taxes change, many events prior or later, here and overseas, yet all I can do is go by history and take a calculated risk.
So what other choice is there to invest? Shares, cash or property.....overseas?
Some people will always look for opportunities while others see limitations. Rents may rise, credit criteria may be relaxed, etc... Nothing is constant, there are always changes, governments will change, rules will change, things will happen out of our control. So it is really only up to us to change to get ahead.
Also, if around 65%-70% of property is owner occupied I think even if all investors left a correction would occur but housing would not collapse.
So short term there are always surprises, changes, but this shouldn't deter any of us who wish to get ahead and be self-reliant financially to stop investing just because things change.
Just today I read ANZ had extended IO loans from 5 to 10 years. So remember your job is to be prepared, have buffers, or plan B, to change when things change, but never to quit to get ahead!

 

That's a good outlook to have ,I like change as there is so much talk about a new government and new investing rules,it does not worry me .00001% let the drama queens do what they do as the mysteries they never thought possible emerge in front of their eyes,and as you cant buy insurance when you need it or of you can it would be pretty expensive insurance ..