House prices

Blowin's picture
Blowin started the topic in Friday, 9 Dec 2016 at 10:27am

House prices - going to go up , down or sideways ?

Opinions and anecdotal stories if you could.

Cheers

monkeyboy's picture
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monkeyboy Sunday, 3 Jul 2022 at 6:20pm

A 4% home loan is still free money. ooops - I beg your pardon - more like less than 3% still.
And thats assuming you have to borrow anything.
The job market is storming, make hay while the sun shines (well, before the floodgates open and Australia gets more immigration ... oh look the borders have reopened and the currency has/is taking a freefall....) Nicely done !

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DudeSweetDudeSweet Monday, 4 Jul 2022 at 2:00pm
sypkan's picture
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sypkan Monday, 4 Jul 2022 at 2:36pm

"...The job market is storming, make hay while the sun shines (well, before the floodgates open and Australia gets more immigration ... oh look the borders have reopened and the currency has/is taking a freefall....) Nicely done !"

how has opening borders put the currency in freefall?

an economic guru dude other day pointed out the last time commodity prices were this high the AU dollar was at parity with US dollar... and wondered why not now?

all the 'indicators' and events should have AU $ climbing, but we are seeing the opposite...

yeh I know US interest rates going up, but you would think our rates also going up would cancel that out?

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monkeyboy Monday, 4 Jul 2022 at 3:59pm
sypkan wrote:

"...The job market is storming, make hay while the sun shines (well, before the floodgates open and Australia gets more immigration ... oh look the borders have reopened and the currency has/is taking a freefall....) Nicely done !"

how has opening borders put the currency in freefall?

an economic guru dude other day pointed out the last time commodity prices were this high the AU dollar was at parity with US dollar... and wondered why not now?

all the 'indicators' and events should have AU $ climbing, but we are seeing the opposite...

yeh I know US interest rates going up, but you would think our rates also going up would cancel that out?

I wasnt suggesting opening the borders put the currency in freefall although it does read like that. The currency is dropping most likely as The Aussie is seen as a "risk on" type currency and with iron ore prices falling and a flight to the USD it isnt that attractive. We're also behind on interest rate increases (I can earn more on the US Bond than on an Aussie bond for example.

My point was more that by opening up our borders further it aims to address a huge shortage of workers (the goal being to redice wage pressures perhaps), letting the aussie fall helps with inbound tourism and foreign investment (yes it also makes our cost of living greater for those things we import anyway). Many commodities are way off their highs (Iron Ore for example - our biggest export).

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freeride76 Monday, 4 Jul 2022 at 4:09pm
monkeyboy's picture
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monkeyboy Monday, 4 Jul 2022 at 4:16pm
freeride76 wrote:

Gas and coal offset that.

https://www.mining.com/web/australia-sees-commodities-boom-lifting-expor...

Yes indeed.

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DudeSweetDudeSweet Monday, 4 Jul 2022 at 5:19pm

Déjà vu

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sypkan Monday, 4 Jul 2022 at 6:16pm
monkeyboy wrote:
sypkan wrote:

"...The job market is storming, make hay while the sun shines (well, before the floodgates open and Australia gets more immigration ... oh look the borders have reopened and the currency has/is taking a freefall....) Nicely done !"

how has opening borders put the currency in freefall?

an economic guru dude other day pointed out the last time commodity prices were this high the AU dollar was at parity with US dollar... and wondered why not now?

all the 'indicators' and events should have AU $ climbing, but we are seeing the opposite...

yeh I know US interest rates going up, but you would think our rates also going up would cancel that out?

I wasnt suggesting opening the borders put the currency in freefall although it does read like that. The currency is dropping most likely as The Aussie is seen as a "risk on" type currency and with iron ore prices falling and a flight to the USD it isnt that attractive. We're also behind on interest rate increases (I can earn more on the US Bond than on an Aussie bond for example.

My point was more that by opening up our borders further it aims to address a huge shortage of workers (the goal being to redice wage pressures perhaps), letting the aussie fall helps with inbound tourism and foreign investment (yes it also makes our cost of living greater for those things we import anyway). Many commodities are way off their highs (Iron Ore for example - our biggest export).

Ok, that makes sense

economic guru dude was weeks ago, when iron ore still high...

and oz $ down down down since then... so quickly!

still surprised, oz economy still so good, and promising, relatively....

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monkeyboy Monday, 4 Jul 2022 at 8:00pm
DudeSweetDudeSweet wrote:

Déjà vu

https://youtu.be/sgRGBNekFIw

Not dissing Peter Schiff but even a broken clock is right twice a day.

There's an old saying - "if you are going to forecast, forecast often"

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monkeyboy Thursday, 7 Jul 2022 at 10:01am
udo wrote:

https://www.abc.net.au/news/rural/2022-07-07/farmland-sale-of-35-hectare...

This is the unfortunate future for the Sunny Coast. So much beautiful land begging to be cleared, concreted over for 400 sq m lots and cookie cutter housing full of morons (sorry). And we wonder where all the native animals have gone, why the wind patterns change and it keeps getting warmer. Beautiful Verrierdale and surrounds wont be far off.

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GreenJam Thursday, 7 Jul 2022 at 2:04pm

yeah, and note the SCC just received UNESCO Biosphere Reserve status, belittles the value of a Biosphere Reserve in my opinion. At least the Council seems to be against the Twin Waters West development. But then think of their position on the Yaroomba Sekusui development - overriding the Planning Scheme and pushing for it when the community was totally opposed, makes the Council a bunch of hypocrites

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monkeyboy Thursday, 7 Jul 2022 at 2:26pm
GreenJam wrote:

yeah, and note the SCC just received UNESCO Biosphere Reserve status, belittles the value of a Biosphere Reserve in my opinion. At least the Council seems to be against the Twin Waters West development. But then think of their position on the Yaroomba Sekusui development - overriding the Planning Scheme and pushing for it when the community was totally opposed, makes the Council a bunch of hypocrites

I'm a little surprised about the Twin Waters west tbh - the council even changed their planning regs so Stockland could amend their plans to meet the new ones. I have no idea why people would want to live next to a motorway (which they've hinted at widening) but they do (see "Aura"). The Biosphere is a joke - same in Noosa; its just a tourism badge like Canstar is to Insurance companies. So many native trees being cleared for Aged Care housing, and Man-Sheds it's just nuts. And at the same time the Council "despairs" over housing affordability - its a trojan horse.

Here come the Olympics {sigh}.

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AndyM Thursday, 7 Jul 2022 at 5:37pm

And still there's absolutely no sign of any conversation regarding a sustainable population for Australia.
Of course, if we keep voting Lib/Lab that conversation just aint gonna happen.

velocityjohnno's picture
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velocityjohnno Friday, 15 Jul 2022 at 1:16pm

Those mad lads at the Bank of Canada rose 1 whole % yesterday. What a time to be alive.

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sypkan Friday, 15 Jul 2022 at 2:07pm
velocityjohnno wrote:

Those mad lads at the Bank of Canada rose 1 whole % yesterday. What a time to be alive.

respect!

though I do appreciate the counter arguments...

'this time is different'

maybe

US tipped to do same by many commentators ...totally 'behind the curve' and 'too slow to react'...

their actions are almost as desperate as the ones that got us into this mess

imagine the collective wig out if australia went one percent...

donweather's picture
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donweather Tuesday, 19 Jul 2022 at 9:21am
sypkan wrote:
velocityjohnno wrote:

Those mad lads at the Bank of Canada rose 1 whole % yesterday. What a time to be alive.

respect!

though I do appreciate the counter arguments...

'this time is different'

maybe

US tipped to do same by many commentators ...totally 'behind the curve' and 'too slow to react'...

their actions are almost as desperate as the ones that got us into this mess

imagine the collective wig out if australia went one percent...

Here’s my two cents worth. As soon as the war in Ukraine ends and oil and gas prices come back down to the norm the US will realise they’ve gone way too hard on interest rate rises and have to start reducing interest rates. This will send markets in a whirl wind uprise, albeit short term but everyone will be jumping on the FOMO band wagon wanting to not miss this one again. And this is just when the market will self implode and recession will hit shortly after.

So enjoy the ride both in the short term and medium term as she’s gonna be one hell of a roller coaster.

kaiser's picture
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kaiser Tuesday, 19 Jul 2022 at 10:00am

Fun fact: RBA raised Australia’s cash rate by 1% twice in a row in 1994 (although 2 months apart)
Aug 1994 - 75 point raise
Oct 1994 - 100 point raise
Dec 1994 - 100 point raise

2.75% in five months!

burleigh's picture
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burleigh Tuesday, 19 Jul 2022 at 10:20am

Bring on the interest rate rises. I was taught by a very wise property investor when i was 18 years old that if you cant afford the property at minimum 3 x the current rate you a purchasing at then you can not afford that home.

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gsco Tuesday, 19 Jul 2022 at 10:20am

Another fun fact about the RBA's November commentary on monetary policy, as reminded by this article on the upcoming review of the RBA:

“Our central scenario is that underlying inflation reaches the middle of the target by the end of 2023,” he said of the RBA’s 2 to 3 per cent inflation target.

“If this comes to pass, it would be the first time in nearly seven years that we will be at the mid-point. This, by itself, does not warrant an increase in the cash rate. It is still plausible that the first increase in the cash rate will not be before 2024.”

Island Bay's picture
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Island Bay Tuesday, 19 Jul 2022 at 10:56am

Wow, what a difference The Tasman makes. 7.3% over here.

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carpetman Tuesday, 19 Jul 2022 at 11:14am
Island Bay wrote:

Wow, what a difference The Tasman makes. 7.3% over here.

Aus at 5.1% as per 27/04.

NZ at 7.3% as per 17/07.

Let's see what happens on the 27/07 when Aus data released.

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velocityjohnno Tuesday, 19 Jul 2022 at 11:42am

Futures are already pricing in the Fed stopping and reversing a little next year Don. My 2c is the Fed is chasing energy and wants to slay this beast - the beast will not go quietly, and will be slain last. We've had as close-to-dammit a crash in US indexes already this year, I guess a crash in Q3 would be a huge continuation down at this stage. Dunno if that one will occur.

Of note is the bank that forecast the smallest overall rise (CBA, to 2.1%) has now revised upward to 2.6%.

https://www.macrobusiness.com.au/2022/07/cba-rba-to-hike-then-slash-inte...

And ANZ have bought Suncorp.

In local anecdata, the young apprentice actually had an RDO after a week of cleaning up things around the worksites. Did this mean work flow is lessening? Nope - new big job just started. Boom on, in the face of everything.

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sypkan Tuesday, 19 Jul 2022 at 12:06pm

"My 2c is the Fed is chasing energy and wants to slay this beast"

in a political manner rather than economical?

freeride76's picture
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freeride76 Tuesday, 19 Jul 2022 at 12:11pm

I think I mentioned a house up the corner from me, bought last Mar for a million, sold this Jun for 1.7.

Old mate two doors down must have had some offers.

For sale sign went up, less than 2 weeks later: SOLD.

my personal opinion is while these waves of Covid are still happening the flight to the regions will continue.

No sign of any slowdown here, anyways.

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Sprout Tuesday, 19 Jul 2022 at 12:37pm

Go ya halves FR? https://thepoint.house/

How long before this adds another few hundred to the lineup?
https://www.realestate.com.au/sold/property-acreage+semi-rural-nsw-lenno...

It's definitely slowed a bit here. Mate's a REA said people offering less than list now.

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sypkan Tuesday, 19 Jul 2022 at 12:48pm

you are in god's own country freeride... literally...

I cannot see your region experiencing any major correction

the big cities however... already...

meanwhile, certain regions are still seeing growth, geez even staid old adelaide is holding / still increasing...

I'd actually say adelaide is currently heading towards some of the most overpriced housing in oz... it might be appealing from the distance of yet another cold covid melbourne winter... but totally unsustainable from a house price / opporunities / dust has settled perspective...

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stunet Tuesday, 19 Jul 2022 at 12:42pm

No slowdown here either.

Last time I posted here was when people across the road tested the waters - probably at the behest of their RE agent - with a price that, from memory, was closer to three million than two. I thought that was monstrously out of step yet it ended up going for two and a quarter. An old weatherboard house on an average-sized block that can't be sub-divided owing to the small amount of street frontage.

Incredible.

Meanwhile, in the papers I was reading all about belt-tightening and downturns and falling house prices. It wasn't happening here.

Now a For Sale sign has appeared on the neighbours two doors up - can see our dunny window in the photos! - and what they're asking would imply the downturn still hasn't struck. Another weatherboard house lifted on janky old brick pylons, admittedly with a view of the escarpment, but also a view into our upstairs bog.

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donweather Tuesday, 19 Jul 2022 at 12:50pm
kaiser wrote:

Fun fact: RBA raised Australia’s cash rate by 1% twice in a row in 1994 (although 2 months apart)
Aug 1994 - 75 point raise
Oct 1994 - 100 point raise
Dec 1994 - 100 point raise

2.75% in five months!

Yes but what was the starting interest rate in 1994?

donweather's picture
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donweather Tuesday, 19 Jul 2022 at 1:12pm
donweather wrote:
sypkan wrote:
velocityjohnno wrote:

Those mad lads at the Bank of Canada rose 1 whole % yesterday. What a time to be alive.

respect!

though I do appreciate the counter arguments...

'this time is different'

maybe

US tipped to do same by many commentators ...totally 'behind the curve' and 'too slow to react'...

their actions are almost as desperate as the ones that got us into this mess

imagine the collective wig out if australia went one percent...

Here’s my two cents worth. As soon as the war in Ukraine ends and oil and gas prices come back down to the norm the US will realise they’ve gone way too hard on interest rate rises and have to start reducing interest rates. This will send markets in a whirl wind uprise, albeit short term but everyone will be jumping on the FOMO band wagon wanting to not miss this one again. And this is just when the market will self implode and recession will hit shortly after.

So enjoy the ride both in the short term and medium term as she’s gonna be one hell of a roller coaster.

Just clarifying I wasnt referring to the housing market. More so the stock market.

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DudeSweetDudeSweet Tuesday, 19 Jul 2022 at 1:20pm

Inflation hasn’t resulted in a across the board wage increase spiral but it has seen a huge uptick in profits. Many business owners are making out like bandits and so the housing market is being sustained enough to keep the illusion happening.

Unfortunately, further interest rate rises will put a huge downer on the construction industry in general as the average punter feels the squeeze. The construction industry is the hub of the Australian economy….we get the export dollars with mining and churn them through the country with the construction industry before it flows through to the service industries.

Anecdotally I know people who are still building the property portfolios and also people who are starting to shift their pants cause they can’t get out with a positive result on their over capitalised property flips. The weighting is moving way more towards the FONGO* mob than the shoppers.

Fear Of Not Getting Out

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velocityjohnno Tuesday, 19 Jul 2022 at 2:02pm
sypkan wrote:

"My 2c is the Fed is chasing energy and wants to slay this beast"

in a political manner rather than economical?

Yeah, maybe both. Think about who they might not like internationally who are all but a petro-state.

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velocityjohnno Tuesday, 19 Jul 2022 at 2:03pm
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velocityjohnno Tuesday, 19 Jul 2022 at 2:09pm

With that FONGO stuff, have heard a little of the panic in the mum & dad new homebuyers/mortgagee areas. Not necessarily the flippers, but those that must have bought in the corona FOMO madness and 0.1% rates, and bought for the house to set up their family life. It was the drop to unheard-of lows that put the 'hazard' in the moral hazard we are seeing now.

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kaiser Tuesday, 19 Jul 2022 at 3:01pm

It’s funny. There appears to be a real state of denial going on. Nobody seems worried… everyone’s still spending like mad. And if the narrative holds that people only expect a brief period of rate rises before pulling back again, just how far will they need to go to rein in inflation?

If nothing else, they’ve got plenty of catching up to do to stay in touch with others ie NZ, CAN, US, UK.

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Sprout Tuesday, 19 Jul 2022 at 3:23pm

When people stretched for < 2% fixed and it expires to 7% with negative equity there'll be some pain, also bargains.

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freeride76 Tuesday, 19 Jul 2022 at 3:43pm

Maybe in the 'burbs of western Sydney and Melbourne.

Can't see coastal real estate doing anything but levelling out a few degrees.

Too much supply shortfall, no end to demand.

The housing shortfall in the Northern Rivers over the next 15/20 years is estimated to be 41000 houses.

They'd need to be building a new Legoland every 6 months to keep up.

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geek Tuesday, 19 Jul 2022 at 4:11pm
freeride76 wrote:

Maybe in the 'burbs of western Sydney and Melbourne.

Can't see coastal real estate doing anything but levelling out a few degrees.

Too much supply shortfall, no end to demand.

The housing shortfall in the Northern Rivers over the next 15/20 years is estimated to be 41000 houses.

They'd need to be building a new Legoland every 6 months to keep up.

Spot on. Metro dwellers have seen there's a better, less stressful life out there and contrary to what I have read in this thread WFH is well and truely entrenched in well-paid big business and government land (and likely for good, can't speak for small business though). I'm guessing a lot of city-based, overworked tradies/teachers/health workers would also want to make the jump still. A lot of Victoria/Melbourne's desirable land close to the coast/hills is locked up for good as green wedge which will further compound things long term down here.

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kaiser Tuesday, 19 Jul 2022 at 4:35pm

Relativity will still apply, just now the parameters have shifted as the work environment has too. If the decline in cities is sufficient, then the draw of the coastal life will be weighed against the price premium. Coast won’t be immune but will fare better than previously. Cities could become the value areas. Interesting times. Wouldn’t want to have Syd/Melb CBD property, especially commercial and retail…

Lotta super funds wrapped up in that

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velocityjohnno Tuesday, 19 Jul 2022 at 6:26pm

Yep it's revenge of the coastal lifestyle areas.
For many years the local RE market update flyer has pointed out coastal prices were a function of access to city/growth in city; wonder if they will pick up on the decoupling.
Or will the coastal lifestyle areas actually fall if peeps are forced to sell off coastal getaways? Can't see it tbh.

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Distracted Wednesday, 20 Jul 2022 at 1:11pm

If people want to have holiday homes and can afford it then they should be able to but there shouldn’t be any tax benefits to support them, particularly with current housing crisis.
https://www.abc.net.au/news/2022-07-20/homeless-crisis-million-homes-vac...

Maybe Oz should be looking at increasing the time period between purchase and sale when capital gains tax can be applied to reduce short term speculation driving up coastal property values.

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donweather Thursday, 21 Jul 2022 at 12:25pm
Distracted wrote:

If people want to have holiday homes and can afford it then they should be able to but there shouldn’t be any tax benefits to support them, particularly with current housing crisis.
https://www.abc.net.au/news/2022-07-20/homeless-crisis-million-homes-vac...

Maybe Oz should be looking at increasing the time period between purchase and sale when capital gains tax can be applied to reduce short term speculation driving up coastal property values.

Why should there be ANY capital gains benefits on ANY investment property? If you had invested in the stock market and made a profit you don’t get any tax benefits so why should someone who invests in property get a tax benefit? Makes absolutely no sense whatsoever apart from driving up demand in investment properties.

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blackers Thursday, 21 Jul 2022 at 2:15pm
donweather wrote:

....
Why should there be ANY capital gains benefits on ANY investment property? If you had invested in the stock market and made a profit you don’t get any tax benefits so why should someone who invests in property get a tax benefit? Makes absolutely no sense whatsoever apart from driving up demand in investment properties.

100%. Same with negative gearing.

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gsco Thursday, 21 Jul 2022 at 2:46pm

I'm no tax expert, but isn't it the case that there is no capital gains benefit on investment properties apart from paying tax on 50% of the capital gain if the property is held for over 1yr - and this also applies to shares?

Is there actually no such thing as "negative gearing", as mentioned at the Treasury website (see screengrab below)? And the idea of "negative gearing" applies equally to shares?

Doesn't abolishing "negative gearing" mean not allowing the claiming of expenses on an investment property (such as repairs and maintenance, insurance, interest amount on loans, etc)? So this would be the same as not allowing a business to claim expenses? Seems absurd?

Is it possibly the case that "capital gains benefits" and "negative gearing" isn't what's driving the property bubble?

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udo Thursday, 21 Jul 2022 at 2:49pm

If you sold your Home / Residence for Bitcoin..Does that make you liable for CGT on Sale of the Bitcoin ?

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bonza Thursday, 21 Jul 2022 at 3:05pm
gsco wrote:

I'm no tax expert, but isn't it the case that there is no capital gains benefit on investment properties apart from paying tax on 50% of the capital gain if the property is held for over 1yr - and this also applies to shares?

Is there actually no such thing as "negative gearing", as mentioned at the Treasury website (see screengrab below)? And the idea of "negative gearing" applies equally to shares?

Doesn't abolishing "negative gearing" mean not allowing the claiming of expenses on an investment property (such as repairs and maintenance, insurance, interest amount on loans, etc)? So this would be the same as not allowing a business to claim expenses? Seems absurd?

Is it possibly the case that "capital gains benefits" and "negative gearing" isn't what's driving the property bubble?

not solely no but its a big part. unsustainable immigration. land banking by developers, and grants and incentives also play a big part to drive demand.
and houses should not be classed as a "business". certainly not in this day and age

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gsco Thursday, 21 Jul 2022 at 3:16pm

udo I think it would be a very risky game to sell an investment property and receive bitcoin in the hope of avoiding paying tax on capital gains!

To start with, the ATO can easily work out the $AUD value of the property sale given the bitcoin price at the time.

And there's rules surrounding trying to sell a property below market value in order to try to avoid tax on capital gains - see for instance the ATO explainer...

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udo Thursday, 21 Jul 2022 at 3:37pm

Home/ Residence not investment property
a few yrs back many homes were sold for Bitcoin and im asking if when offloading the Bitcoin does that make you liable for CGT ?
Had they sold for Aust Currency id definetly would not .
https://www.realestate.com.au/news/properties-you-can-buy-with-bitcoin/

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gsco Thursday, 21 Jul 2022 at 3:42pm

Don't know about that one but I'd assume the ATO would likely question how/when the bitcoin was acquired and then determine a "cost base" using the bitcoin price at the time of the property sale. (So it could also result in a capital loss.) But I'm only speculating here...