In fairness that’s only going to get worse and worse once we properly start to get hit with an aging population problem like Japan. The stress on the economy will be huge and we need to start considering that sort of stuff now. You don’t want a situation where you have a shrinking workforce, supporting an increasing elderly population and struggling to do so. Not that it’s exactly an easy fix.
Wouldn’t be that hard to cap the number of properties you are allowed to have for retirement and then cap the amount of income based on the value of the property for instance. The government could potentially decide property values rather than private market. We are definitely going into some weird socialist territory though.
The biggest issue with the property market is that, once you’re in, you want the status quo to stay the same and property to increase in value. It’s mainly really the people that don’t own property that are affected the most.
Another point to note, you also have a whole bunch of people that are being priced out of the property market based on downsizers as well. A whole load of properties that would traditionally be bought as entry level, are also being bought by elderly people with way more money, downsizing. We’re in a villa that we bough for a hair under $1,000,000 about 5 years ago. It could now go as high as $1.4mill as it’s the perfect property for downsizers and first home buyers at the same time.
100% agree with you both, not saying I don’t think we change, it’s just a reason not to reform that often doesn’t get talked about as the second you even mention the concept you’ll have the boomer voters breathing down your neck.
For the record, I also think super rather than age pension is part of the problem, since the former has to invest in profit generating ventures which are nonetheless safe. Part of the reason Labor is now anti WFH is that industry super funds, aka union officials cushy late career jobs, also invest in commercial property.
Yeah, it’s a massive Ponzi scheme that everyone with a property doesn’t want to end. The Govt has encouraged the use of housing as a speculative activity.
The tax breaks that they provide don’t really incentivise new investment - you see heaps of property ‘flips’ that increase the price, but doesn’t increase supply. The NIMBY attitude that is prevalent here means there is not enough incentive to build higher density and affordable housing, which would ease demand.
Instead you still get landlords sitting on empty properties, taking a paper loss, to offset their capital gain, then onto the next property, increasing prices, while the first home buyer can’t get a foot in the door.
I would be curious to see how the tourism industry would restructure to reduce reliance on short term rentals. As a product user, personally I would prefer to stay in a private house or apartment 90% of the time relative to a hotel chain. Plenty of others would say the same.
The economies of small tourist towns live or die on tourist numbers, but also on having realistic housing stock for the workforce and locals. Are there any places in australia that have that balance right?
I would say that you would probably only cap short term rentals in specific areas, or increase the cap based on tourism towns.
Randomly, we have family friends that live in Forster that absolutely detest tourists and the fact that the town revolves around tourism. The kicker though? The run a business selling bikinis…
I can understand living there and not being a fan of tourists. What I can’t understand, is someone opening up a business that 100% relies on tourists and then being annoyed about tourists coming through
I mean, we’re copping it down the south coast too, but my understanding is Byron has taken this to the next level. The AirBnBification was building up heading into covid, and then the covid seachangers from Sydney drove the market up even more and they haven’t left. Basically nobody who grew up in Byron can afford to live there, which has a flow on effect to cost of housing in nearby northern rivers towns.
The whole economy is a Ponzi scheme that relies on continual growth feeding its base.
The biggest trouble with such schemes is that the longer they run the bigger the crash at the end.
Yeah, I get that… but in theory, growth implies some sort of production of goods/services that implies value. With housing in Australia, most of the time prices are going up with no real value add.
I suppose you could say the same about crypto and shares in general though…
It’s not just the residents of Australian coastal hamlets that are having an issue with it, there’s open protests on the streets or Barcelona about the same problem.
R_Trick nailed it with his Byron example. Compounding the problem is those people are being forced to look in areas where the housing stock was decimated by the biggest natural disaster this country has seen.
There’s still people living in pod villages because there is no housing. There’s also a big problem with squatters moving into condemned houses because there’s nowhere else to go.
The problem being, you can’t just say “well it’s a tourist town so let’s let people AirBnB to keep the tourist dollars coming in”. It has flow on effects to the nearby regions.
I guess I’d be considered part of the problem as I’ve accumulated 4 properties over the last 25 years of my adult life.
I’ve watched friends and peers piss opportunities away and money up against the wall while I’ve followed one of my life goals to build generational wealth.
Perhaps I’ve landed in a financially stable situation through luck but Ive always surrounded myself with good mentors from early on and was never too proud to follow advice. I’ve worked hard and smart, manifested and gone without.
I won’t deny that making money off houses looks like another case of the rich getting richer and the poor getting the picture but a lot of hardwork and sacrifice goes into it. I dont see why hard work and sacrifice should be punished with more tax.
I understand some prople have issues buying a first home but I cant see why that is someone elses fault. I bought homes for both my daughters when they were conceived by over extending myself and I think it will be worth the sacrifice. If it turns out that it wasn’t worth the sacrifice, it’ll be because people who haven’t worked hard enough cried poor to the government and the government restrict me ot tax the shit out of me to bring me down a peg.
The government that changed the rules to make it easier to acquire properties 2+, turned housing from a home into an investment and made it harder to buy the first house because prices had been driven up because it’s easier to buy the 2nd house as an investment?
It’s not taking you down a peg. It’s taking away a source of inequity and allowing others to own homes.
I think your stance is fair enough for people like me. I got into the housing market far too late for various reasons. But the people in their twenties now? They were born into an inequitable situation that was established before their birth. Not everyone has the fortune of Daddy Bank buying them a house when they were conceived.
So, if you take the situation in a certain famous outback town atm, many people would blame that on culture and ethnicity when the problem arises from two basic needs not being met; Security and opportunity.
If we take what ever generation name coming through now, are they getting security and opportunity?
If they see no housing security for themselves, what happens?
If they see no economic opportunity for themselves, what happens?
Birth rates are important to capitalist economies. Watch that plummet. Economies work by the circulation of monies. Watch what little they generate disappear to Thailand or something.
Watch the crime rate go up, because when people don’t voluntarily share things they don’t actually need, other people will take them.
This isn’t like we’re discussing going to the gym, working hard and improving yourself vs sitting on the couch.
For every person who owns a home they don’t live in, there’s another person who doesn’t own their home. By definition, someone else is losing out (by either not having the opportunity to live in the house you’ve left empty, or by paying your mortgage for you in the form of rent).
Nobody’s talking about anything so crazy as capping the amount of profit you’re allowed to make by renting out a shelter you’ve been in the position to buy and treat as a financial asset, like people with a property portfolio are forced to do under socialist systems like checks notes New York.
We’re just discussing ending existing tax incentives that make it easier for those with capital to acquire more capital, like negative gearing, or that benefit those who engage in speculation on rising asset values, like CGT.
If you don’t want to pay those taxes? Don’t make capital gains or use your existing capital to acquire more capital that locks other people out of the market. Hey, presto, getting rid of negative gearing and CGT doesn’t bother you!