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think positive 
Side By Side
Joined: 30 Jun 2005
Location: somewhere
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Hehe, and um, I actually did look b4 I posted it!
Agree, nuts, but then if you watched the block or any other real estate show, there is plenty of nuts with too much money out there! Or maybe big mortgages!
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You cant fix stupid, turns out you cant quarantine it either! |
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stui magpie 
Prepare for the worst, hope for the best.
Joined: 03 May 2005
Location: In flagrante delicto
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Yeah, sorry, I know you would have looked.
I look at those prices and it's clear that I've extended my house, renovated it, put a big new shed in the backyard, and in doing all that I've reduced the potential sale price by about $300k.  
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Every dead body on Mt Everest was once a highly motivated person, so maybe just calm the **** down. |
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Morrigu 
Joined: 11 Aug 2001
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^ yeah but it's your home not just a house or a $$$ thing. I wouldn't give you two bob for something without a yard and I would need to commit the better half if he didn't have a shed or two to work and fart around in!!
Some knob will buy boxes like that and rent them out and claim it all - they need to do away with negative gearing!
The other thing listening to young uns at work rabbit on is they are happy to live in such boxes with all the mod cons but no yard and fck all privacy - they don't seem to see the privacy as an issue cause they just live indoors - even their " al fresco" areas are really indoors 
Tannin is a fair bit shorter than you - knee pads may be the go! 
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Member 7167 
"What Good Fortune For Governments That The People Do Not Think" - Adolf Hitler.
Joined: 18 Dec 2008
Location: The Collibran Hideout
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A very plain house down the road from my house would have been valued at about $1.4 m. The guy employed a builder who also lives in our street and they knocked over the house and are now building two identical two storey town houses. He is going to live in one and has the other up for sale at $1.9m. It will be interesting to see how it pans out
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Now Retired - Every Day Is A Saturday |
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stui magpie
Prepare for the worst, hope for the best.
Joined: 03 May 2005
Location: In flagrante delicto
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I've got knee pads in the shed. 
My son just signed the lease today for a house in Sth Morang. After i paid the bond and first month in advance (my back account is bleeding)
As a dad with a fairly rambunctious 11 month old son, he wants a back yard. He grew up with one and even though where he's going doesn't have a large one, it's still a real backyard not a fkn coutyard BS thing. The kid can play outside, get dirty, get hurt, and so what boys do.
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Every dead body on Mt Everest was once a highly motivated person, so maybe just calm the **** down. |
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think positive
Side By Side
Joined: 30 Jun 2005
Location: somewhere
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| stui magpie wrote: | I've got knee pads in the shed.
My son just signed the lease today for a house in Sth Morang. After i paid the bond and first month in advance (my back account is bleeding)
As a dad with a fairly rambunctious 11 month old son, he wants a back yard. He grew up with one and even though where he's going doesn't have a large one, it's still a real backyard not a fkn coutyard BS thing. The kid can play outside, get dirty, get hurt, and so what boys do. |
Yeah I agree, though just look at all the apartment living going up, Docklands is a hit, yuk! A three story apartment block just went up around the corner opposite a little shopping centre, and people paid $400,000 for a one bedroom! And it's in a bloody awful spot, no view and on a really busy round about. Sanctuary lakes is full of massive houses, yes there are a fair few with a decent yard, but a lot are on top of each other. It's claustrophobic!
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You cant fix stupid, turns out you cant quarantine it either! |
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Dark Beanie
Joined: 06 Feb 2004
Location: A galaxy far, far away.
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Prices in Melbourne are completely nuts.
Friend just sold her house for $4.8 million!
Has been beautifully renovated, has a pool, 4 car underground garage, cinema room, cellar, 5 bedrooms but even for our area the price was way over what most believed it was worth.
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If you are foolish enough to be contented, don't show it, but just grumble with the rest. - Jerome K Jerome |
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HAL
Please don't shout at me - I can't help it.
Joined: 17 Mar 2003
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| That question has never crossed my mind before. |
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Tannin
Can't remember
Joined: 06 Aug 2006
Location: Huon Valley Tasmania
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Sorry for the late reply chaps, I've been laid up in hospital recovering from a minor operation. There was nothing actually wrong with me, I hasten to add, it's just that I volunteered for the anonymous organ donor program to help people who need transplants. My kidneys are rooted, my liver is dodgy, my brain is 49 years past its best, and my heart is notoriously small, cold, and hard, but as it happens they had an urgent requirement for an arsehole. I was happy to oblige. Hell, it's not as if I had much use for it, and if I ever do need one, I'll just mail order it from the ACT where I understand they are plentiful. Hell, most politicians have at least three of them.
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�Let's eat Grandma.� Commas save lives! |
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David
I dare you to try
Joined: 27 Jul 2003
Location: Andromeda
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| Morrigu wrote: | ^ yeah but it's your home not just a house or a $$$ thing. I wouldn't give you two bob for something without a yard and I would need to commit the better half if he didn't have a shed or two to work and fart around in!!
Some knob will buy boxes like that and rent them out and claim it all - they need to do away with negative gearing! |
Exactly! If you want to know why property prices have skyrocketed, this is at least one factor not the only one, by any stretch, but the fact is that we live in an artificially inflated market.
For point of comparison, I had a look at how much our place (a medium-sized house in Hampton with a huge backyard; 856 square metres in total) sold for when it last changed hands in 1989: a little under $180,000. Compare this to the house next door, which is slightly smaller and, judging by the brickwork and design, was built by the same people around the same time: it sold in 2012 for $905,000.
And, indeed, property estimates of our place now have it at around $1.5 million. That would be an increase of over 8 times the price in just 27 years.
Some of that can be accounted for by inflation. But are you earning 8 times as much now as you were in 1989? Has the general cost of living decreased in real terms to make up for this?
Prices didn't need to skyrocket to this extent, but it's no mystery why they have. Successive governments have consistently stuck with policies that benefited developers over home-owners; that encouraged anyone with financial means to buy a second house as an investment while big developers (from here or overseas) bought as much as they possibly could while benefiting from every tax break available. That's the paradigm now, and it's going to take a lot to turn it around.
So, when you look at a property development that may not seem to make sense on a cost/benefit analysis, you have to remember that the developers may be able to claim every cent of that cost back at the end of the financial year, leaving them with only profits. Who wouldn't jump at that opportunity?
It all makes absolute sense if you forget what houses are actually for: that is, homes for people to live in. Unfortunately, that concept seems to be going the way of the dinosaurs. The reality now, instead, is empty 'investment' houses and a nation of renters.
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All watched over by machines of loving grace |
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think positive
Side By Side
Joined: 30 Jun 2005
Location: somewhere
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Little overboard there! You can't claim every cent. You get the GST back, and you claim expenses and outlay against the sale price, so you only pay tax on the difference between the cost of building and the end price, ie the profit. And if it doesn't sell you can't claim a cent except the GST you have already outlaid, until it does.
Housing prices are ridiculous, so are rents. So move somewhere cheaper, and if everyone did that the rent prices and sale prices would drop. Supply and demand, just like TVs, cars, and everything else.
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You cant fix stupid, turns out you cant quarantine it either! |
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David
I dare you to try
Joined: 27 Jul 2003
Location: Andromeda
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Not sure how me moving somewhere cheaper (as we will almost certainly have to do once this lease is over) will reduce property prices! If everyone flees Hampton and moves to, say, Coburg rental prices in Hampton may drop, but rental prices in Coburg will only rise accordingly. And, indeed, that's precisely what's been happening as people have been pushed out of expensive inner city suburbs like Carlton and Fitzroy; once cheap suburbs like Brunswick and Coburg are now facing higher demand and thus higher prices.
Renters aren't the problem here; it's the inflated market.
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All watched over by machines of loving grace |
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think positive
Side By Side
Joined: 30 Jun 2005
Location: somewhere
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| David wrote: | Not sure how me moving somewhere cheaper (as we will almost certainly have to do once this lease is over) will reduce property prices! If everyone flees Hampton and moves to, say, Coburg rental prices in Hampton may drop, but rental prices in Coburg will only rise accordingly. And, indeed, that's precisely what's been happening as people have been pushed out of expensive inner city suburbs like Carlton and Fitzroy; once cheap suburbs like Brunswick and Coburg are now facing higher demand and thus higher prices.
Renters aren't the problem here; it's the inflated market. |
im not saying they are! its a vicious circle is all! years ago agents would say "dont go to auction" now they say do, because people get carried away. im still shocked what we got for our old house, fair enough if someone wanted to build 2-3 townhouses, ideal position, 800 square metres, side lane for access, but a couple bought it to live in! madness!! but good for us!
what is really not helping is overseas investors. they go nuts at auctions they seem to have unlimited funds.
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You cant fix stupid, turns out you cant quarantine it either! |
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Morrigu
Joined: 11 Aug 2001
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| David wrote: | | Morrigu wrote: | | Some knob will buy boxes like that and rent them out and claim it all - they need to do away with negative gearing! |
Exactly! If you want to know why property prices have skyrocketed, this is at least one factor |
Correct it's a con albeit a legal one at this stage and the current conditions enabling foreign investment that results in so many properties being left empty needs to be seriously addressed!
"New property developments are bursting out of the ground across Australia, particularly in Victoria and New South Wales. Australia has more than two million landlords yet despite the boom in new properties up for grabs, thousands are sitting empty. In Sydney alone, some 80,000 properties are vacant.
According to property tax specialist Shukri Barbara, many foreign investors who have bought properties outright reap more benefits by leaving them empty.
"If you don't have a need for cash, and all you're doing is sinking your funds into an asset, then in the current economic environment in Australia, particularly in Sydney and Melbourne, the markets are thriving and the values are thriving because of low interest rates,"
Negative gearing a property is possible when your rental expenses exceed your rental income. Those expenses come from items like loan interest, maintenance costs, strata fees, rates and taxes and insurance.
People who negatively gear expect the house value to appreciate; that by taking a loss now, the house will sell for more than what they bought it for.
If a home is left empty by choice and there is no rental income coming in, then you are unable to get a tax deduction from the government.
Mr Barbara said if the property stood empty while you had it listed with a real estate agent in the process of looking for a tenant, all the expenses would be allowed for a tax deduction. While the rental property remains vacant, the owners are still able to negatively gear that property
If your holiday house is purely there for you to enjoy, then you can't claim it as a tax deduction, Mr Barbara said. However, if you make it available for short-term rentals and have it listed with an agent, then you are allowed to apportion the expenses for those periods.
For example, if you stay in your beachside house for two weeks and rent it out to other holidaymakers for the rest of the year then you can claim a tax deduction on those 50 weeks.
Deductions against rental income
* Interest and loan account fees on loans to finance investment properties
* Property management expenses e.g. body corporate fees, cleaning, gardening
* Rates and taxes
* Legal and Property agent costs
* Administration expenses including stationery to maintain rental records
* Travel to inspect the rental property or to collect the rent
* Insurance
* Repairs and maintenance associated with renting out the property
http://www.abc.net.au/news/2016-11-24/can-you-negatively-gear-an-empty-house/8054166
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“The greatness of a nation and its moral progress can be judged by the way its animals are treated.” |
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Pies4shaw
pies4shaw
Joined: 08 Oct 2007
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| David wrote: | | Morrigu wrote: | ^ yeah but it's your home not just a house or a $$$ thing. I wouldn't give you two bob for something without a yard and I would need to commit the better half if he didn't have a shed or two to work and fart around in!!
Some knob will buy boxes like that and rent them out and claim it all - they need to do away with negative gearing! |
Exactly! If you want to know why property prices have skyrocketed, this is at least one factor not the only one, by any stretch, but the fact is that we live in an artificially inflated market.
For point of comparison, I had a look at how much our place (a medium-sized house in Hampton with a huge backyard; 856 square metres in total) sold for when it last changed hands in 1989: a little under $180,000. Compare this to the house next door, which is slightly smaller and, judging by the brickwork and design, was built by the same people around the same time: it sold in 2012 for $905,000.
And, indeed, property estimates of our place now have it at around $1.5 million. That would be an increase of over 8 times the price in just 27 years.
Some of that can be accounted for by inflation. But are you earning 8 times as much now as you were in 1989? Has the general cost of living decreased in real terms to make up for this?
Prices didn't need to skyrocket to this extent, but it's no mystery why they have. Successive governments have consistently stuck with policies that benefited developers over home-owners; that encouraged anyone with financial means to buy a second house as an investment while big developers (from here or overseas) bought as much as they possibly could while benefiting from every tax break available. That's the paradigm now, and it's going to take a lot to turn it around.
So, when you look at a property development that may not seem to make sense on a cost/benefit analysis, you have to remember that the developers may be able to claim every cent of that cost back at the end of the financial year, leaving them with only profits. Who wouldn't jump at that opportunity?
It all makes absolute sense if you forget what houses are actually for: that is, homes for people to live in. Unfortunately, that concept seems to be going the way of the dinosaurs. The reality now, instead, is empty 'investment' houses and a nation of renters. |
Back in the mid-1980s, before the stock market crash and the realisation of any long-term impacts of the changes to the negative-gearing laws, those of us working in housing market research used to say that, as a rule of thumb, housing prices tended to double about every decade over the long term. Applying that basic proposition, it's no particular surprise that a house that was worth x almost 30 years ago is now worth 8x. That's about what I'd expect.
The general limit on the growth of housing prices is not so much the rate of increase in incomes over time but rather the absolute limit on access to credit.
There plainly is a "price bubble" at present but it looks to me to be related to (driving a truck through some very intricate corners) continuing high demand (driven by local population growth and foreign investor demand, with government policy throwing fuel on the fire because the "health" of the domestic economy is predicated on continuing strong spending on construction) and historically low interest-rates. In the late 80s, the interest rate for purchasing owner-occupied housing was, on average, of the order of 15%. Now it's around 4%. Because people have little experience of decline in housing prices, they tend to take the view that it doesn't much matter what they pay for a property, the growth in the price will take care of the debt. That works while prices increase.
When I bought my present main residence in 2005, I was struck by the very low rents (measured, I hasten to add, as a proportion of the capital value of the properties, rather than the affordability of the rent) being obtained for fine houses in the inner-city. It occurred to me then that, with rents so low, it would be a good idea to sell our old house and rent for a while. In fact, rents have continued to fall as a proportion of property values since that time and, without having done any mathematical assessment, I suspect that they are probably at historically low levels measured as a percentage of the capital value of the property. Of course, renters actually pay the rent they are charged and get no long-term return for what they pay, whereas purchasers (whatever ridiculous price the bank agrees to let them pay for their house) do. Since 70% of Australians still own property and taxation revenues are so heavily dependent upon the structural "health" of housing prices, government policies aren't going to alter in this sector any time soon.
I mention, in the interests of transparency, that I do not negative-gear any property, nor have I ever done that. Nor do I pretend to rent my holiday house for tax reasons. Thus, everything I say here might be incorrect but at least it isn't self-serving. |
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