‘ … we have to get the Tax Bludgers out of the market by doing away with negative gearing and also the DivImpCredrefund bludgers. Why should the many be paying the taxes of the few?’
OR put another way …
-House prices are primarily influenced by 2 things:
1. NG and CGT tax concessions. These are not only ridiculous in an overcooked property market, but also unaffordable given the high level of government debt approaching $1.4 trillion. Remove them and prices will not only plateau but fall back towards normality, and
2. Interest rates. Even a small increase in interest rates will see many defaults in the mortgage market leading to prices falling.
The real question is how long can the RBA continue playing games holding the official cash rate at 0.01% while the real rate of inflation on essential items is 5% p.a. (45% over the last decade).
The global bond market knows that inflation is rising, hence the higher yields which is normally followed by higher interest rates.
Then from another who perhaps has a vested interest in high immigration wrote:
‘One interesting thing is all those people wanting immigration stopped because it was causing the housing market to spiral out of control were wrong. And as for immigration taking our jobs, wrong again, as unemployment is (slightly) falling’
Which drew this response:
‘It’s not wrong. Just look around. Go to a physical auction and see the demographic makeup of the bidders.
Blind Freddie would tell that is a major factor. People forget we are twenty years into an immigration explosion.
The gates were opened back then, and now It’s a self-propelling momentum driven market.’
CAAN: How can this be disputed?
The Howard Government in the late 1990s enticed the Middle Class Chinese to invest in education and our real estate lured by ‘flexible citizenship’. This led to a housing boom in 2004!
AND … permanent migration of 70,000 p.a. was replaced with temporary migration through a large number of Visas including a range of investment visas, AND … family, parent, grandparent, guardian, student, PhD student, the 457 visa later replaced by the skilled work visa enabling these people to gain permanent residency esp. if they bought a ‘new home’!
Prior to the Pandemic there were 2.3 MILLION Visa holders in Australia of which 1.6 Million were visa workers!
Many from overseas were lured when they gained either student visas or work visas with the prospect of ‘permanent residency’. They were willing to work long hours and for low rates of pay!
There have been numerous reports about the exploitation of these people. They have come here in large numbers and this led to high unemployment and underemployment of Australians!
‘The one million Australians forgotten in the unemployment statistics’
-Why does this article not include the opinion of Prof Cameron Murray, an expert in property economics? He produces relevant, thoughtful and informative pieces on a semi-regular basis, and knows what he is talking about.
Given the very wide range of “forecasts” this article’s experts have produced and the uncertainty that they demonstrate, your readers might have been better served by an opinion piece informed by just one economist.
–Auctions … and/or pressure from Sales Negotiators …
‘If there are two people who want the same house then the prices will go up, if there is one or none the prices will stay the same or drop.’
-The “property boom” has resulted from every government in Australia ratcheting up house prices artificially over several decades by throwing cash at first home buyers.
This massive misallocation of capital, coupled with outrageous lending practices by banks, has created a potential economic disaster, which, once the slide in house prices begins, will lead to the banks ending up in difficulties again.
Intervention by the regulators could trip the collapse of this wobbly pile of debt. Other triggers could be current fall of payrolls induced by the egregious mismanagement of the SARS COV-2 epidemics in Australia.
And an eventual increase in interest rates for house mortgages is, in the long term, inevitable. It is simply a matter of which trigger is reached first to give an avalanche of foreclosures. The legal practices handling bankruptcies will become the new hot industries.
Whichever party in power at the APH will collect most of the opprobrium.
-Meanwhile we keep buying properties, keep renting them out and keep getting tax advantages whilst enjoying almost free money. Long may it continue.
–And there lies the reason why our future generations will largely be consigned to rent for most of their lives!
The exceptions will be those inheriting a large proportion of a house, or multiples thereof, and the highest-earning professionals.
Having a go from a base of $0 won’t be enough for most young people to enter the housing market.
‘Housing boom tipped to end this year’