Buying Property.

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almax
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Re: Buying Property.

Post by almax »

http://www.theage.com.au/business/onlin ... 1cfeq.html

Online campaign targets high cost of housing

March 30, 2011 - 11:24AM

Prosper Australia, a little-known group which supports tax reform on land, has ignited a small but growing online push calling for a "buyers' strike" to protest against the high cost of housing.

“I undertake not to bid at auction or negotiate by private treaty to buy real estate until prices moderate, just as they have in all the countries we compare ourselves to,” the Prosper pledge states on its website.

Advertisement: Story continues below The campaign has jumped to the top of the list of potential campaign ideas on the online activist site GetUp with hundreds of votes added each day over the past week, outpacing support for same-sex marriage and calls for the Australian government not to bow to pressure to outlaw Wikileaks. It's also bobbing up on Twitter and in other online forums.

Commentators at home and abroad have long questioned the sustainability of Australia's home price increases. Australia is the most overvalued housing market among countries surveyed by The Economist magazine, which calculated that they are 56 per cent over-priced.

Australian home prices, which have increased 77 per cent from December 2002 to the end of 2010 on the Australian Bureau of Statistics capital city house price index. In February the national city house price stood at $465,000, according to RP Data - between four and seven times median household income, depending on the source.

Utility queried

The Real Estate Institute of Victoria, a property industry group, said it shared concerns about the cost of housing but questioned the utility of a buyers' strike.

“People are right to be concerned about affordability problems,” said REIV spokesman Robert Larocca. “Whilst we share everyone's concern about affordability problems, it's a misguided and short-sighted way of trying to deal with it.”

Mr Larocca said that housing affordability had suffered in Melbourne's case because new home construction had failed to keep up with a doubling of the city's population growth in the second half of last decade .

Others, though, lay the blame of rising house prices elsewhere, citing excessive land regulation, speculation by builders, negative gearing and ease of access to loans for driving up costs to unaffordable levels.

'Irresponsible'

Calling it “economically irresponsible” for young adults to be expected to spend thirty years under heavy debt to achieve home ownership, the Prosper strike pledge requires adherents to hold off on auctions or private treaties until prices come down.

Online support for the pledge began after a blogger from the site Bullion Baron added the suggestion to GetUp's campaign idea list. It has since shot up to the number one spot in two weeks, with 3,728 votes as of this morning. The system allows users as many as three votes for the same cause.

“It has been very surprising,” said an Adelaide-based blogger running Bullion Baron, who gave his name only as Joseph. “I think the quick move highlights just how important the housing affordability issue is to young Australians.”

GetUp doesn't automatically pursue any suggestion that receives many votes, it said, however, popular causes on its forum often prompt a wider response from the left-leaning organisation.

Another campaign idea on GetUp's forum would abolish negative gearing.

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Re: Buying Property.

Post by ghetto kitty »

uh huh yup. loads of my crew have been sharing this 'protest' online.

your thoughts al?

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Re: Buying Property.

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interesting but pointless/futile.

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Re: Buying Property.

Post by Lizkins »

hopefully the more people push that this is a problem something may happen


look at the whole exit fees with banks on mortgages. They are now implementing a law that stops banks from doing this to contracts going forward from June 1 i think it is. And on current mortgages i think you can apply to get out of it to go to another bank. Some banks are even considering offering to pay the exit fee on older mortgages to get the people's business

this should have been done years ago!!!


negative gearing also needs to be shafted up the arse big time
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Re: Buying Property.

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agree Al.

and also agree that negative gearing needs to stop riz.

the next generation is gonna be living at home with dboy/fents till they are 35!!!

;)

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Re: Buying Property.

Post by shepherd »

what's the issue with gearing? cops a bad wrap as far as i am concerned. nothing illegal about it - gives people a pretty minor tax upside that is very small in the scheme of things. can't see how negative gearing is the cause of housing inflation.

the cause of housing inflation is more people want to buy property than those who want to sell. hence prices increase. it's a free market and people in AU want to put their cash into property. you can blame inflation on property prices on cheap finance, negative gearing, empty nesters, loads of 55+ cashed up retirees, low unemployment or whatever else ... the simple thing is buying a house is considered a life goal by the overwhelming majority of Australians.

i used to whinge about housing prices but realised i either entered the game or stopped whining. so we sucked it up and bought a place. it was daunting but i'm bloody glad we did it as entering the housing market is getting harder every day.

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Re: Buying Property.

Post by ghetto kitty »

shepherd wrote: the simple thing is buying a house is considered a life goal by the overwhelming majority of Australians.

i used to whinge about housing prices but realised i either entered the game or stopped whining. so we sucked it up and bought a place. it was daunting but i'm bloody glad we did it as entering the housing market is getting harder every day.
true. definately the feeling that caused me to start this thread & get serious advice. its a bit different for a single person, feels impossible tbh.

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Re: Buying Property.

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shepherd wrote:what's the issue with gearing? cops a bad wrap as far as i am concerned. nothing illegal about it - gives people a pretty minor tax upside that is very small in the scheme of things. can't see how negative gearing is the cause of housing inflation.

the cause of housing inflation is more people want to buy property than those who want to sell. hence prices increase. it's a free market and people in AU want to put their cash into property. you can blame inflation on property prices on cheap finance, negative gearing, empty nesters, loads of 55+ cashed up retirees, low unemployment or whatever else ... the simple thing is buying a house is considered a life goal by the overwhelming majority of Australians.

i used to whinge about housing prices but realised i either entered the game or stopped whining. so we sucked it up and bought a place. it was daunting but i'm bloody glad we did it as entering the housing market is getting harder every day.

how does that make sense when every article on the matter is stating that Australia is at the top of housing prices, and that the median housing price in Melbourne exceeds the affordability based on median wage?
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Re: Buying Property.

Post by quiet roar »

^^ True Liz'. And negative gearing is a major reason people speculate on property.

Hopefully the increased "noise" about this will make more people think more carefully about how much they are paying for a place.
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Re: Buying Property.

Post by Lizkins »

yep, its totally whack and unfair. My friend owns an investment property in NZ, and she was stocked that she got quite a few grand back on her tax because of negative gearing. i was dumbfounded.

two things i think i have mentioned before that still sound whack to me

- people are buying houses in australia, not living in them or renting them, and are living overseas and getting some massive tax offset against the property each year. not sure how it works, but have heard this from a few people. So properties are sitting there not being lived in. I should ask one of my partners about this one in terms of the tax implications, because it must be good if they are doing this.

- the apartments being built, especially in the Docklands, are not selling as well as they thought, apparently quite a few are empty. People bought up when they were being built but the surrounding area did not catch up quick enough to the required need. Plus they were hit with extra costs. People thought they paid for the apartment and that was it, then were hit with service management fees each year for the lifts, gym etc. It was something like $5k or higher each year for apartment management.



A committee has been formed to discuss growth in Melbourne. My old boss is on it, and the biggest issue is housing prices and how to fix the issue to make it easier for everyone to own their own home. To bridge the gap between owning and renting etc.

things are happening...
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Re: Buying Property.

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Lizkins wrote:.

- the apartments being built, especially in the Docklands, are not selling as well as they thought, apparently quite a few are empty. People bought up when they were being built but the surrounding area did not catch up quick enough to the required need. Plus they were hit with extra costs. People thought they paid for the apartment and that was it, then were hit with service management fees each year for the lifts, gym etc. It was something like $5k or higher each year for apartment management.
yep thats a major over sight, any apartment block with lifts and or a pool will come with huge body corporate fees, its almost as much as paying rent on top of the mortgage, stay away from them, for your first property at least!

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Re: Buying Property.

Post by quiet roar »

almax wrote:
Lizkins wrote:.

- the apartments being built, especially in the Docklands, are not selling as well as they thought, apparently quite a few are empty. People bought up when they were being built but the surrounding area did not catch up quick enough to the required need. Plus they were hit with extra costs. People thought they paid for the apartment and that was it, then were hit with service management fees each year for the lifts, gym etc. It was something like $5k or higher each year for apartment management.
yep thats a major over sight, any apartment block with lifts and or a pool will come with huge body corporate fees, its almost as much as paying rent on top of the mortgage, stay away from them, for your first property at least!
Financial planners were major culprits in all of this because they kept pushing the appartments as good investments to a lot of poor sods who came to them for advice. Of course they were getting handy kickbacks from the developers.
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Re: Buying Property.

Post by ghetto kitty »

^^ yup im gonna watch out for that when i get this report!

lucky i gots people on both/every side of the fence to compare intel with

;)

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Re: Buying Property.

Post by almax »

quiet roar wrote:
almax wrote:
Lizkins wrote:.

- the apartments being built, especially in the Docklands, are not selling as well as they thought, apparently quite a few are empty. People bought up when they were being built but the surrounding area did not catch up quick enough to the required need. Plus they were hit with extra costs. People thought they paid for the apartment and that was it, then were hit with service management fees each year for the lifts, gym etc. It was something like $5k or higher each year for apartment management.
yep thats a major over sight, any apartment block with lifts and or a pool will come with huge body corporate fees, its almost as much as paying rent on top of the mortgage, stay away from them, for your first property at least!
Financial planners were major culprits in all of this because they kept pushing the appartments as good investments to a lot of poor sods who came to them for advice. Of course they were getting handy kickbacks from the developers.
really? thats soo fricken dodgey! bet its all in the paperwork though, they just neglect to tell you and hope you dont read it.

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Re: Buying Property.

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lizkins my feeling is the primary cause of housing inflation is Australian societies higher than normal value placed on 'the great Australian dream'. We can read all the articles in the world but take this factor away and you can bet housing prices would be nowhere near they are. People want to own a house and the desire isn't a rational one.

I can't see - personally - how gearing is an incentive to buy property to a level that is a dominant cause of housing price pressure. I have looked at it and the advantages for income tax are not that compelling. Gearing is just a tax deduction on the 'gap' between investment required to pay the house off (plus incidentals related to the property - rates, maintenance, fees) and income derived from rentals. It's no different to tax breaks for vehicles used for work purposes or ANY tax deduction.\

Now not for a moment am I not saying I agree with. It is a shame that the median house property is out of whack with the median HH income and that housing inflation is significantly higher than general YOY wage increases ... but it is what it is.

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Re: Buying Property.

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shepherd wrote:if Au was USA we'd have these bad boys

Image
Just saw the commercial...I think we do have these now. Bloody Americans!

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Re: Buying Property.

Post by nic »

a facebook campaign can change this.......
LETS GET BEHIND IT AND MAKE HOUSING AFFORDABLE FOR ALL

:click:

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Re: Buying Property.

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Tweet yr disgust = Instarevolushit
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Re: Buying Property.

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yup, i call it 'slacktivism'

same as 'change your profile pic to a banana and stop world hunger"

:roll:

OB - they are disgusting! all my guy friends are SO excited about that gross thing!

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Re: Buying Property.

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shepherd wrote:lizkins my feeling is the primary cause of housing inflation is Australian societies higher than normal value placed on 'the great Australian dream'. We can read all the articles in the world but take this factor away and you can bet housing prices would be nowhere near they are. People want to own a house and the desire isn't a rational one.

I can't see - personally - how gearing is an incentive to buy property to a level that is a dominant cause of housing price pressure. I have looked at it and the advantages for income tax are not that compelling. Gearing is just a tax deduction on the 'gap' between investment required to pay the house off (plus incidentals related to the property - rates, maintenance, fees) and income derived from rentals. It's no different to tax breaks for vehicles used for work purposes or ANY tax deduction.\

Now not for a moment am I not saying I agree with. It is a shame that the median house property is out of whack with the median HH income and that housing inflation is significantly higher than general YOY wage increases ... but it is what it is.

i don't think one sentiment equates to the price of housing being double what they are actually worth. Do people in other countries not want to own their own home? I think its a myriad of factors that come into play as to the cause of housing problems and that each issue needs to be looked at individually and on a whole to tackle the problem.

Even if we were a country who changed their view on wanting to own their own home and settled for renting, the rental market is still bad as well. Would the rental market decrease if less houses were being bought to live in and just rented out? Would that percentage of people who own investment properties continue to gain an upper hand on the rest of society in terms of wealth and ownership of land?

re negative gearing, i see your point sort of, but i don't get why the government fills the gap with a tax break on service/maintenance and even the gap in rental. The rent they receive should be enough to cover all costs. They already have the capacity to by another property to then rent out, why give someone more of a helping hand with that?
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Re: Buying Property.

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I blame illegal immigrants. For everything.

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Re: Buying Property.

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lizkins how do you work out what a house is 'worth' - because it's never been about the actual cost of goods/plant etc ... land prices are the major component and they are based on supply/demand

i do think australians want to buy property - they aspire to be home owners - is the dominant driver. it is more ingrained in australians than other cultures generally. plus add to this relatively low unemployment, a stable domestic economy, relatively cheap money to borrow, dual income households, an older population/empty nesters (generally with more disposable income) and economic stability and people are wanting to invest in what they consider both aspirational as well as financially sensible.

melbourne may flatten (or at least somewhat normalise - like Sydney has) as there has to be a point where affordability stress comes in. i hope not as i want some big gains from my house! :P

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Re: Buying Property.

Post by quick »

that kfc thing looks too good... so bad, but so yummy
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Re: Buying Property.

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shepherd wrote:lizkins how do you work out what a house is 'worth' - because it's never been about the actual cost of goods/plant etc ... land prices are the major component and they are based on supply/demand

i do think australians want to buy property - they aspire to be home owners - is the dominant driver. it is more ingrained in australians than other cultures generally. plus add to this relatively low unemployment, a stable domestic economy, relatively cheap money to borrow, dual income households, an older population/empty nesters (generally with more disposable income) and economic stability and people are wanting to invest in what they consider both aspirational as well as financially sensible.

melbourne may flatten (or at least somewhat normalise - like Sydney has) as there has to be a point where affordability stress comes in. i hope not as i want some big gains from my house! :P
That first sentence makes no sense. WTF are you bleating on about? Goods? Plant?
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Re: Buying Property.

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i meant the goods in the house - plant ie fixtures, fittings etc.

http://www.investorwords.com/3712/plant ... t_PPE.html

apologies if i came across in a way that offended you

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Re: Buying Property.

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shepherd wrote:lizkins how do you work out what a house is 'worth' - because it's never been about the actual cost of goods/plant etc ... land prices are the major component and they are based on supply/demand

i do think australians want to buy property - they aspire to be home owners - is the dominant driver. it is more ingrained in australians than other cultures generally. plus add to this relatively low unemployment, a stable domestic economy, relatively cheap money to borrow, dual income households, an older population/empty nesters (generally with more disposable income) and economic stability and people are wanting to invest in what they consider both aspirational as well as financially sensible.

melbourne may flatten (or at least somewhat normalise - like Sydney has) as there has to be a point where affordability stress comes in. i hope not as i want some big gains from my house! :P

i don't know how they equate what a house is worth, but from what i have taken from the articles when they say that the cost of housing is above the house worth, would be the median price of cement, bricks, timber, fixtures across the board i.e. how much do bricks cost here at cost price, or cost price overseas? I could be misinterpreting it, but that is how i have taken what they are saying.

And yeah i get you are viewing this on the side of someone who owns and wants to make a profit. To be honest if i owned a home i could give a rats about a profit, and would care more about buying in at a reasonable price and being able to handle a mortgage on my own.
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Re: Buying Property.

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Houses are worth what people are prepared to pay for them. Housing prices will never be based on resource costs.

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Re: Buying Property.

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quick wrote:that kfc thing looks too good... so bad, but so yummy
my word!

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Re: Buying Property.

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Hardy wrote:Houses are worth what people are prepared to pay for them. Housing prices will never be based on resource costs.
+1 to this. I'd also add that housing prices are worth what people can afford to pay for them. For example you use to need 20% deposit, then 10% and then as low as 5%. Not to mention dual income households etc etc. However given the fact that our income hasn't kept up with the size of mortgages at some point it can't continue to go up unless the banks loosen lending criteria even further or the government introduces a new stimulus (FHBG) or our income goes up substantially...

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Re: Buying Property.

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i don't get that argument at all when you look at things like people using their superannuation to buy investment properties and being able to blow everyone else out of the water with what they can offer. So instead of keeping to what the house is actually worth, they just threw money at them to win. Hence another reason why housing prices were pushed up. I had friends who were bidding on places and had well over $400k to spend and were being knocked out of the race by older couples with their super in their pockets.
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Lizkins wrote:i don't get that argument at all when you look at things like people using their superannuation to buy investment properties and being able to blow everyone else out of the water with what they can offer. So instead of keeping to what the house is actually worth, they just threw money at them to win. Hence another reason why housing prices were pushed up. I had friends who were bidding on places and had well over $400k to spend and were being knocked out of the race by older couples with their super in their pockets.
It seems to me though that you're basing this on the idea that these older couples only have super, which is a pretty naive assumption. They could be millionaires or company directors. Or that they could just have excellent equity and lending power.

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Re: Buying Property.

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im now srsly considering buying interstate where i can afford it.
i guess for all my out of the box thinking i am also part of the population who wants the aussie dream one day...
and the idea of owning an actual house first, rather than an overpriced box here I wont even live in either makes more sense.
just wont buy in the floodplain :lol:

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Lizkins wrote:i don't get that argument at all when you look at things like people using their superannuation to buy investment properties and being able to blow everyone else out of the water with what they can offer. So instead of keeping to what the house is actually worth, they just threw money at them to win. Hence another reason why housing prices were pushed up. I had friends who were bidding on places and had well over $400k to spend and were being knocked out of the race by older couples with their super in their pockets.
Thats exactly it Liz. One of the major contributing factors to property getting out of hand is because of negative gearing. Essentially it has allowed investors to buy a number of properties (causing greater competition and undersupply) where rent is not meeting mortgage repayments but they get big tax breaks while relying on capital gains to make a profit.

http://www.smh.com.au/business/imagine- ... 1ceqb.html

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Re: Buying Property.

Post by Lizkins »

Jinx wrote:
Lizkins wrote:i don't get that argument at all when you look at things like people using their superannuation to buy investment properties and being able to blow everyone else out of the water with what they can offer. So instead of keeping to what the house is actually worth, they just threw money at them to win. Hence another reason why housing prices were pushed up. I had friends who were bidding on places and had well over $400k to spend and were being knocked out of the race by older couples with their super in their pockets.
Thats exactly it Liz. One of the major contributing factors to property getting out of hand is because of negative gearing. Essentially it has allowed investors to buy a number of properties (causing greater competition and undersupply) where rent is not meeting mortgage repayments but they get big tax breaks while relying on capital gains to make a profit.

http://www.smh.com.au/business/imagine- ... 1ceqb.html

yeah i mentioned negative gearing before. Its fucked and needs to be gotten rid of. I keep reading the start of the article and then it crashes my nets, will try again tomorrow at work, first few paragraphs were really interesting!


Thomas - not even sure how you get me being naive out of what i said. At what point did i imply that they only had super? I said their supers were assisting them to buy and spend more. No way could anyone afford to do this with only just super and live off of the remainder. My mum is already fretting about retiring because she will get some pension and whatever super she has. She is actually concerned about living beyond what her super can handle. So no, you can't buy a house and live the rest of your days out on just super. Clear enough for you?
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Re: Buying Property.

Post by Hardy »

Lizkins wrote:
Jinx wrote:
Lizkins wrote:i don't get that argument at all when you look at things like people using their superannuation to buy investment properties and being able to blow everyone else out of the water with what they can offer. So instead of keeping to what the house is actually worth, they just threw money at them to win. Hence another reason why housing prices were pushed up. I had friends who were bidding on places and had well over $400k to spend and were being knocked out of the race by older couples with their super in their pockets.
Thats exactly it Liz. One of the major contributing factors to property getting out of hand is because of negative gearing. Essentially it has allowed investors to buy a number of properties (causing greater competition and undersupply) where rent is not meeting mortgage repayments but they get big tax breaks while relying on capital gains to make a profit.

http://www.smh.com.au/business/imagine- ... 1ceqb.html

yeah i mentioned negative gearing before. Its fucked and needs to be gotten rid of. I keep reading the start of the article and then it crashes my nets, will try again tomorrow at work, first few paragraphs were really interesting!


Thomas - not even sure how you get me being naive out of what i said. At what point did i imply that they only had super? I said their supers were assisting them to buy and spend more. No way could anyone afford to do this with only just super and live off of the remainder. My mum is already fretting about retiring because she will get some pension and whatever super she has. She is actually concerned about living beyond what her super can handle. So no, you can't buy a house and live the rest of your days out on just super. Clear enough for you?
Rightyo then. I guess I misread it.

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Re: Buying Property.

Post by DBoy »

What happened to blaming the Chinese?

I am fretting about buying. I just look at what you get for 400,000 these days and think it seems so out of kilta with 'value' or 'worth' and I wonder if it could possibly go up more. My instinct tells me that there is no way it could go up in the levels it has been over the last 5 years any time soon.

So to me, only reason to buy now is if you really want to own where you live.

But property keeps amazing ain't it.

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Re: Buying Property.

Post by ghetto kitty »

^^^ dboy thats why i would rather buy a 3 bedroom house interstate for what it is actually worth ie affordable, rather than paying what they are 'worth' here in Melbourne in the extremely inflated market.

parts of QLD haven't moved for 4 years and may not move much for 2 more...
plus since the floods etc, people are selling up and prices are really reasonable...im looking at doing something that is either positively geared or neutral, which is very feasible up there. i could do the same in geelong, but what's the difference in geelong or QLD when i probs wont be living in either?

for me, buying close to melbs in a house i can have doggie in is not feasible, so id rather get a foot in the market somewhere and then down the track, use that place as equity to borrow more in the hope i can afford to buy somewhere i want to live before i'm 40.

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gnat
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Re: Buying Property.

Post by gnat »

rosalie in bris in the place to buy. flooded out, pimp position, mad sales

no buying in melbs for us either. for 3/4 of what we could buy a 2brm partially reno'd terrace with street parking and a postage stamp courtyard in our street we can buy (outright- no auction) a 3 bedroom totes reno'd house with a pool and backyard a block and a half from the beach in QLD
Be who you are and say what you feel because those who mind don't matter and those who matter don't mind - Dr. Seuss

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ghetto kitty
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Re: Buying Property.

Post by ghetto kitty »

word gnat.

you gonna rent it out up there and live down here? mebbe we can go on renovation/beach holidays together :lol:

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gnat
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Re: Buying Property.

Post by gnat »

nah we'll live in it lady and not too far off

vote 1 beach and mad weather, no water restrictions. and norco chocolate milk!
Be who you are and say what you feel because those who mind don't matter and those who matter don't mind - Dr. Seuss

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ghetto kitty
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Re: Buying Property.

Post by ghetto kitty »

cool! well ill come visit then cos i'm not quite ready for QLD permanently...

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nic
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Re: Buying Property.

Post by nic »

some grate advice in tis thrad

btw anyone needs accounting/financlial adivsier - im ur man

PM for details

one flat rate i sort out all your money

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ADD_Boy
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Re: Buying Property.

Post by ADD_Boy »

donk futures are hot right now i hear nic!

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deviant
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Re: Buying Property.

Post by deviant »

don't buy dubstep futures though.. I've heard it's all tearout

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quiet roar
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Re: Buying Property.

Post by quiet roar »

gnat wrote:vote 1 beach and mad weather, no water restrictions. and norco chocolate milk!
keep saying it enough times and you may actually believe it.
The only normal people are the ones you don't know very well

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gnat
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Re: Buying Property.

Post by gnat »

quiet roar wrote:
gnat wrote:vote 1 beach and mad weather, no water restrictions. and norco chocolate milk!
keep saying it enough times and you may actually believe it.
:cyclops:
Be who you are and say what you feel because those who mind don't matter and those who matter don't mind - Dr. Seuss

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ghetto kitty
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Re: Buying Property.

Post by ghetto kitty »

I am about to sign off on paperwork to do loan to buy property.

Scary yet exciting times.

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retzie
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Re: Buying Property.

Post by retzie »

oOooOOOooo

You got places in mind, or just girding your loins?
deviant wrote:I'm some sort of man-machine.

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mrj
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Re: Buying Property.

Post by mrj »

retzie wrote:just girding your loins?
i didnt realise loans were available for this!

:leavesforbank:
He's climbing in your windows, he's snatching your people up.

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ghetto kitty
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Re: Buying Property.

Post by ghetto kitty »

retzie wrote:oOooOOOooo

You got places in mind, or just girding your loins?
yup have some places in mind.

few km's out of brisvegas. better houses on bigger blocks and renting for more than Geelong, as an example.

freaking out though. i trust these finance dudes, but im still scared.

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