House prices - going to go up , down or sideways ?
Opinions and anecdotal stories if you could.
Yeah I follow Jess' thinking but the thing about all crashes in the past is while all the "indicators" were there for everyone to see very few "experts" saw it coming or perhaps more precisely got the timing right.
This will be increasingly become the biggest political issue in the county, a real crisis as opposed to the confected ones politicians are good at, and come next election the LNP will be savaged if they haven't cut negative gearing and 1/2 CGT in addition to curbing or halting foreign buyers (personally I don't see them doing it). The BBQ isn't being lit and that's all people want to talk about.
Haha yea but I can read them without necessarily agreeing with them. My post was more highlighting the lack of infrastructure and public transport comment rather than whether or not she is right or wrong. Reality is that if these 'economists' followed their own advice over the last few decades and stayed out of this bubble, they would have missed out on one of the biggest wealth creating opportunities in the last century. That is only relevant because I certainly wouldn't want to take advice from an economist who is crap at making money. Bit like asking a rollerblader how to do a cutback .
And I still don't think either camp has made a good enough argument to convince me they know what is going on. Only hindsight will tel us which were the ones we should have listened to
I've always likened economists to the weatherman on the news. They can assess the current situation but as far as forecasts go it seems to be the only job in the world where people are paid to be right "sometimes". I'm sure there isn't a person on this forum who doesn't take every wind forecast with a pinch of salt.
If the logic stands though, its always useful to have an interpretation of the current situation.
I follow a few market spectators on different currencies and the differences of opinion is laughable, hence the need to follow a few. The dollar jumps/falls etc and there are often 2/3 different views as to why, even with the benefit of hindsight. At the end of the day I've always figured that if any of these "experts" truly had their finger on the pulse they would be making money by backing their own decisions rather than for offering commentary.
GS I reckon this issue will be the death of the libs to be honest as if they act on CGT Discounts & Gearing then their voters will hate their guts and it'll be an admission of a Howard policy failure. If they don't then things turn to shit and the ALP brands it that way anyway. The last one to touch housing policy will have to own the whole mess.
Yes, it's interesting how the Libs will get hit on this. The paradox is that Labor don't have a solution but are only suggesting tinkering with negative gearing. What does to be, is that the facts are not stated accurately. So you have price variations depending on location. You have 'investors' who are not defined who and where they come from. There are contradictions on the negative gearing argument. For example, if negative gearing is a major cause then explain why there have been many periods where house prices have receded and flattened for significant periods yet gearing has been in place. The comments above seem to concur that no one really knows.
"...the facts are not stated accurately." Indeed.
Agreed TB many contradictions out there. Negative gearing will always be the holy grail as it allows people to build & store wealth tax free (until the property is sold) whilst minimizing taxable income at the same time.
I wouldn't mind seeing the volumes sold in each state compared over the years, as I've always assumed that the "churning" of the Sydney & Melbourne real estate markets through the boom was what skewed the national market although I've never researched it.
Gaz, if you are interested in such things check out what happened to property prices after Howard introduced 1/2 CGT and allowed SMSFs borrow for property.
Here's a chart shows the start of negative gearing (1987) and also CGT discount was introduced in 1999. Are SMSF's allowed to invest in residential property? I remember working in super many years ago and it was taboo but I've no idea what the situation is now.
Yes SMSF are able to borrow to speculate in residential property (from 2007).
You need to qualify the SMSF property investments. You will find that you have jump thru more hoops than a circus lion. Especially if you hope to borrow - risky and most likely not a loan if a negative is being planned. SMSF are audited each year.
That's what I thought TB I remember it being an option but there was no chance to ever live in the property before 65 years of age because of hurdles and red tape.
Basically you were buying a home + house in the hope that both were paid for in 30 years time so that you could then flatten the house to start again as I recall.
SMSFs can buy (with or without borrowed funds) pretty much anything but strictly not for personal use. SMSFs can therefore buy houses, cars, art even surfboards but these "assets" must not be for personal use and must meet stated criteria under the legislation. SMSFs are audited each year but the audit documents are initially prepared by the SMSF's accountant. SMSFs borrowing funds to speculate on property is inherently risky but that hasn't stopped it happening on a very large scale.
Three family members have SMSFs and all have rental properties and one is a property co-investor in a mid coast very large hardware "warehouse". One also has some very rare Grange under secure storage.
GS, can I suggest walk into a bank see if you can borrow using SMSF funds to buy an investment property. The auditor will get whacked, since as you said it's risky and that not what the tax office wants for SMSF funds for obvious reasons. The fact is, it's not a large scale.
Recent comments on SMSFs are correct, they have had basically no effect on the residential property market, especially in Sydney and Melbourne where gross yields on residential property are very poor, and as stated earlier LBRA loans have hurdles that high and most providers have left the market.
Also "exotic assets'' (art, wine, cars, etc.) have been under strong ATO (who regulate SMSFs) scrutiny and been pushed towards moving them out of SMSFs (some speculative art has seen a decrease in value) due to the fact that the ATO have concerns that these assets fail to meet the sole purpose test to be eligible for the tax concessions normally available to super funds (this rule applies to all super funds, not just SMSFs).
As per this article: https://www.superguide.com.au/smsfs/smsf-investment-art-collectors-subje...
Here is a digressionary question - if you had a million dollars cash sitting in the bank what would you do with it ?
That's how I remember it too Terrance. You can buy what you like, but lord have mercy on you if there is even a shred of private use attached to it. As I recall, you could buy art etc but hanging it on the wall in your home would be considered scandalous.
Blowin, If I wanted a safe investment I'd buy agricultural land and lease it (depending on the area). You can still get a 4-5% net return on ag land (cropping) and if you think its expensive now just wait 10 years. There's a reason foreign governments are going mad over our farmland.
What are we talking about here Geoffrey?
1 mill sitting in the bank- Buy and sell the $US.
Correct their Gaz, whilst in accumulation phase, SMSF assets can't be used for personal benefit, you can't stay in the holiday house, drive the vintage car, put the Pro Hart on the wall, etc. You can lease them galleries, movie productions (cars), lease them out at commercial rates etc.
Prior to a few years ago the ATO only had two ways of dealing with breaches. The slap with a feather (i.e. no deterrent) or the nuclear bomb (where they deemed the fund non-complying, wrapped it up, took half the assets, put the trustees on the 'not fit and proper person' register, because they got sick of ungoing breaches, trustee attitude etc.) then the ATO would go through the rest of you dealings as well.
The new point/fine system has been in for a while now taking away need for the feather, but the nuclear bomb can still come into play.
Ahhh, now with a million dollars sitting in the bank :
1. Commercial property - depends where
2. Leave it - see what happens in 12 to 18 months, even at 3%.
3. Blue chip selective shares - many are underpriced.
4. Last option, property in some regional areas.
One mill .....
In the words of Captain Goodvibes "throw down all your earthly possessions and donate them to me", or words to that effect anyway.
Or donate it to the LNP, no on second thoughts only a fraction of it and you would be guaranteed political favours for life.
in all seriousness use the balance (after the above political donation) to leverage the largest possible loan and go out a buy some business or property known to be held as sacred religious belief for your newly found political servants.
Quiver of channel bottom swallows in two inch increments from 5'10 to 8'0" each one sprayed red.
That would kill me Stu.
I'm actually managed to gather most of my boards in the one place for the first time ever. Got 20 of my all time favourites from many periods of my life including a few new beauties, all racked up and looking seductive.....and I'm out of the water.
Fucked up situation.
This your eye op? How long till you're done?
Got another appointment in Brisbane on the 12th fingers crossed he can sort it.
Swell meant to be pumping on that day .
Blowin, advice I got from an accountant mate on investing was the only time you get any value out of your money was when you spent it.
Alternatively buy a fibro shack with ocean views anywhere on the east coast.
Blowin, Me personally or someone trying to make that mill work as hard for them as possible and/or get a first house? Cos the answers are different. I don't mind sharing either though
I'm more than keen to here either or both if you don't mind.
CFD short the f#ck outta the banks when the ponzi falls - that is if the government doesnt stop you like last time. Alternatively short a mortgage insurer all the interest only loans being called in by the first position you took. 1M will get you @ 10M of shares - big risky game research stop losses
dont invest in property here is the former CEO of CBA
hey blowin, im pretty sure it was you that was looking for a place right? so ill put myself in your shoes for a sec and assume i've just inherited 1 mill. id do one of two things,
1. look for a top end place on the water in one of the coastal villages south of about rennies beach all the way to the border. take your pick. id make sure its one i could build a granny flat on right up the back, build the bastard, then holidaylet/airBNB the mansion and stay in the flat when its rented. if its really a marquee type place you'll pay your years mortgage repayments off with just the main holiday weekends plus a week or two more. *edit: just realised there would be no mortgage repayments if you had the money already.
2. buy a house close to any university that has alot of international students in a town with low vacancy rates, build a granny flat and provide homestay to them. (big bucks, tax free and the ATO ruling on homestay is very vague so you dont necessarily have to cook for them). alternatively just rent it out to the international students. i like international students because not alot of them drink and party and are battling over here because of the exchange rate, so they just study and dont make much noise.
if it were me that magically found a mill in my bank account i would spend about 500 of it on knocking down and building my wifes dream house cos im sick to fucking death of living in 50+ year old houses. probably jam about 200 in super and play around with about 300 in either commercial property and shares. dont mind gaz1799s idea about ag land either, might look into that.
unfortunately i dont have a mill.
im a big fan of granny flats mate if you couldn't tell they are the cheap and easy way to dual occs IF set up properly. theres plenty of other ways to squeeze yield out of residential property but grannies are the easiest by far. trust me i've explored them all.
There's a few gems if you want to look overseas blowin. Here's one where you could live like a colombian druglord and surf every day whilst dabbling in the share/stock market with any change left over if you're so inclined. I'm thinking you'd need $100k-$200k capital to make share trading worthwhile with a low level of risk and decent return. I'm assuming that whatever the prices are on a site like that could also be haggled vigorously if you were on the ground throwing big bucks around.
Also there's a potential positive that the AUS$ will likely depreciate against the yank as their economy recovers, pumping up the value of the home in Aussie dollars..
How do I short the banks ?
Leveraged cfd. Banks are the biggest players in that market tho so id be hesitant to go head to head when they make the market.
you can indirectly short the dow jones on the ASX through a few managed funds, BEAR and BBUS are their codes if i remember correctly. worth reading up on those two if your interested.
A ridiculously vested interest giving advice on how to fix housing affordability. Is it lame that it made me laugh a bit?
Everyone loves midnight oil, go the oils, yep PG, maybe sold out, maybe silenced, BORROWED LAND?respect
$$$$ its all about the dollars, faaark, what was the hat song
Let's all build a bridge, a long one, so we can think about it on the way over
Yep we are all slaves, go figure?
GST (Skyrockets all graphs) 30% increase on House prices.
20 y/old firms went from working 30 homes a month to fight over 1 home. Ours included!
GST was sold as a consumption Tax for factory/import/ Warehouse to shelf items.
Oz Construction & Manufacturing snowballs ( GST on OZ Labour + Sales)
Tax balloons from... seed,watering,tree trimming,lopping, trucking,storage, milling, transport, warehouse,factory floor,trucking,showroom,trucking,onsite labour..
(15 piggyback taxes for 1m of Skirting).
Imported it's just the one GST 10% tax. World wins! Rainforest dies.
Here's the kicker houses are OZ made needing mountains of these snowball GST processes.
Govt require trades for new safety standard courses /licences/products.
House in 1950's needed 6 blokes + 6 items.
What now 206 blokes are required by law to build your house from 206 items ?
Each item GST taxed and stamped by Govt HQ a dozen times over.
Houses are the most OZ labour/Govt intensive GST industry.
Hence the unspoken 30% add on cost not the 10% shoptag for can of beans.
GST is an attack on OZ labour.No other Govt' would disadvantage their own this much.
Our greedy Pollies taxed themselves out of nation building. Days of the Hollow Promise!
Govt must rid GST on OZ processing/manufacturing. Were digging ourselves into a hole.
Govt may lose on tax take but gain on nation building and lower house prices by 20%.
OZ Today! Housing,Car manufacturing,Bridge Building,Highways cost double that of USA.
GST is the elephant in the room but never on the table. It's Crunch time.
Google 18= 14 + 4 for some interesting reading. It shows a cycle of 14 years up and 4 down and it has been like this for over 100 years. I agree house prices are high but when reading this it actually makes sense to me. Yes it is only a opinion from another economist but its a good read.
House Prices has become this monster, much like I just saw on Friday arvo with The Transformers, The Last Knight.
It is like the worst Real Estate dude you can think of ( I am not sorry that I said that) with a hoe and it's usual ignorance.
On Monday 4 Corners did their take on the housing bubble:
Was an interesting watch, they missed a few factors contributing to the rises, but did quite well with the easy finance part.
In other news, Toronto, Canada housing falling hard.
Crazy things are still going up in many areas, I'm pretty sure i heard on the radio Melb prices have risen 15% in the last year.