Two Year Royal Commission Into Housing In OZ Concludes Nothing

A waste of tax payers money. No suggestions at time to re look at the viability of continuing Negative Gearing (as called for by NSW Planning Minister, Rob Stokes) nor restoring Capital Gains Tax discount.

Avoidance of talk of introducing land tax. The Committee was headed by a Liberal MP David Coleman. Hardly 'independent'. Surely a non political entity could have headed such a Commission?

Meanwhile the rort continues.......

In contrast, last year's Senate inquiry produced a number of recommendations.

http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/Affordable_housing_2013/Report

The housing market in Oz strikes me as being really messed up, and there's way too much money chasing investment properties. It's not going to end well in Sydney and Melbourne.

In contrast, last year's Senate inquiry produced a number of recommendations.

 

http://www.aph.gov.au/Parliamentary_Business/Committees/Senate/Economics/Affordable_housing_2013/Report

 

The housing market in Oz strikes me as being really messed up, and there's way too much money chasing investment properties. It's not going to end well in Sydney and Melbourne.

Agreed.

The auction system, and how they just keep pushing up the prices during the auction. The majority of buyer are usually now investors or foreign buyers who can and will price out first time buyers. shocking.

On the market system, and owners now getting very greedy or just grouping up to sell to developers if they still have there mcmansion.

I have watched a few, and cannot believe it is not illegal how they work it. How many times can you call going once, going twice with no one making an offer, only the auctioneer making his own next bid to start the process again.

Foreign investors who just buy property and then leave it sitting empty.

The amount of properties I see in my suburb that are empty and some which should be condemned is astonishing.

What a joke. The LNP is completely f****d on this.issue

I despair at my country. Far from a laughing matter. Even back in the days of the early nineties when interest rates got to 18% people were far better off. Low interest rates have done little but allow people to take on insane debt.

The housing lobby has taken this country into a rather terrible place and even bets, I'd say, if we will survive it, without being a far diminished nation of banana republic status. (another of the awful Turnbull's policy though he omits the banana part of it)

On reflection a quick sample of how we got to the disaster that we have found ourselves in.

There was The First Home Buyers Grant. That was brought in by Johnny Howard and the Coalition.

Capital Gains Tax was halved.

First Time Builders Grants introduced.

Complete avoidance of any discussion of Land Tax as a revenue tax.

I think it was Rudd and Labor that eased back on foreign ownership restrictions. Those remaining are barely enforced. A complete joke. Foreigners can purchase property while a child goes to primary school. (recently lowered as it was uni students at one time) They are supposed to sell on leaving Australia to return home, but hardly enforced from how I understand it.

Not forgetting the media culture here captured and in turn subservient to real estate interests.

Desperation perhaps putting it too mildly.

See the desperation in Perth where right on cue, they conjured up another $5000 FHBuyers grant.. some noise in the back ground about loosing 'investment' value cause that would cause prices to drop on current stock, especially on account that 1000's more houses are for sale than normal, ditto rentals.

The pigs are starting to squeal and will get amusing when the banks stop lending into such a market.

ps, its nice to know that in Australia we have a 'Treasurer for real estate prices' (I think that's his official title) in the shape of Scott Morrison who in fact used to work for the so called property council of Australia (a private lobby group), gives you a nice warm fuzzy feeling as the little rodent Howard used to say.



The banks are, on the quiet, already tightening up on mortgage lending, they are starting to get a little twitchy.

It's only going to end one way and it won't be good , when you look at the root cause of the GFC back in 2008 you have to start questioning the ability of our polititions ,it's completely out of control and they don't know how to control it.History repeating its self they never learn remember well when it crashed in London back around 92 lots of people in negative equity and just handing keys back.

There will be some cheap property on the market when it does crash

It's only going to end one way and it won't be good , when you look at the root cause of the GFC back in 2008 you have to start questioning the ability of our polititions ,it's completely out of control and they don't know how to control it.History repeating its self they never learn remember well when it crashed in London back around 92 lots of people in negative equity and just handing keys back.

There will be some cheap property on the market when it does crash

Im probably being naive, but I don't understand how foreign investors can buy everything. When we looked into buying as non residents a few years ago, we were told that non residents had to buy new, and only a certain proportion of any new development could be sold to foreign investors? I am being naive aren't I.

Im probably being naive, but I don't understand how foreign investors can buy everything. When we looked into buying as non residents a few years ago, we were told that non residents had to buy new, and only a certain proportion of any new development could be sold to foreign investors? I am being naive aren't I.

There are are many rules and regulations and if the price is right they can get round it, you are correct in theory you can only buy new.

I did some work last year on property in Mosman , owner had sold to Chinese investor who had knocked on his door and offered 25% above market value its crazy. Like wise some people I know were selling and went with Chinese real estate agent record price for their property.

What struck about Australia is how blatantly big business sets the political agenda. In fact, most of the wealthiest Australians have made their fortunes due to political connections, rather than innovation.

Around half of all mortgage lending is made to investors, rather than homeowners. Changes to the tax laws, such as eliminating negative gearing, would harm that. There was a huge amount of lobbying by the real estate industry, which was effective given my opening point, and with 1.8 million property investors in Australia, there's a lot of votes of stake.

I don't know how much Chinese investors affect the Australian market. It's hard to tell someone who's emigrated and been granted PR or citizenship, from someone who's still based there. I also suspect that they're not as fabulously wealthy as claimed, most of the estimates suggest that there are 1.3 million millionaires over there, which is just slightly ahead of the million or so in Australia.

The thing is there aren't any easy solutions. If property prices fall to an affordable level, that would wipe out virtually every investor, would wreck the finances of a lot of people approaching retirement, and probably cause a financial crisis. If they stay where they are, the younger generations are increasingly locked out of home ownership.

I don't see any crash coming. Bear in mind Flag has been saying this every year for at least 5 years and has egg all over his face.

Migration is increasing and there is a need for more and more housing.

China also has a huge mass of wealthy middle class, so if they have the ability to buy assets they will.

Many want to live here too.

Remember how 2016 was the year that the housing bubble was going to burst.

well...

http://www.theage.com.au/business/the-economy/australias-new-five-speed-property-market-20170103-gtl4y0.html

You can never bet on a crash but conversely what is holding prices up is the following

Negative gearing which attracts speculators to the housing market.

1/2 price capital gains tax which attracts speculators also.

Open door policy to foreign buyers for money laundering and hiding purposes and where there are rules they are not policed.

Very low interest rates

Restrictive land banking where land is held by government cronies and drip fed to the market.

Very slack lending practices by the banks (regardless of what they and the press may say to the contrary) especially to speculators.

Yes we have high immigration which puts pressure on prices somewhat.

So all in all, a lot of government backed assistance to push up house prices for various vested interests and little or no concern for younger first time buyers or in fact those that want to save up and move up a bit, ie a very cruel and cynical part of Australian life and politics, in fact shows the same callousness as is applied to those in offshore detention centres with not a little amount of amusement thrown in for the entertainment factor amongst our erstwhile speculators and their morally corrupt politicians..

How many of these incentives aimed at the speculative side of price increases would in their absence precipitate a price crash? and for eg how much more money can real people throw at housing as a place to live? Jobs are not getting bigger and better and in fact on the whole are shrinking and becoming more unreliable (just look at Perth right now)

And as pertaining to this forum, why would a pom sell a perfectly good house in the UK, give up their job to come over here in order to pay more for housing etc? especially as it is in an unreal price warp whereby it could easily collapse back to sane prices, even more than the UK could by rights. The dream of the old days is long gone, cheap housing, good wages, are no longer there and a few extremely hot days do not make up for it.

You can never bet on a crash but conversely what is holding prices up is the following

Negative gearing which attracts speculators to the housing market.

1/2 price capital gains tax which attracts speculators also.

Open door policy to foreign buyers for money laundering and hiding purposes and where there are rules they are not policed.

Very low interest rates

Restrictive land banking where land is held by government cronies and drip fed to the market.

Very slack lending practices by the banks (regardless of what they and the press may say to the contrary) especially to speculators.

Yes we have high immigration which puts pressure on prices somewhat.

 

So all in all, a lot of government backed assistance to push up house prices for various vested interests and little or no concern for younger first time buyers or in fact those that want to save up and move up a bit, ie a very cruel and cynical part of Australian life and politics, in fact shows the same callousness as is applied to those in offshore detention centres with not a little amount of amusement thrown in for the entertainment factor amongst our erstwhile speculators and their morally corrupt politicians..

How many of these incentives aimed at the speculative side of price increases would in their absence precipitate a price crash? and for eg how much more money can real people throw at housing as a place to live? Jobs are not getting bigger and better and in fact on the whole are shrinking and becoming more unreliable (just look at Perth right now)

And as pertaining to this forum, why would a pom sell a perfectly good house in the UK, give up their job to come over here in order to pay more for housing etc? especially as it is in an unreal price warp whereby it could easily collapse back to sane prices, even more than the UK could by rights. The dream of the old days is long gone, cheap housing, good wages, are no longer there and a few extremely hot days do not make up for it.

Haha this insane Pom is planning to do just that. Having weathered several price boom and busts in the UK I know exactly how hard it can't hit when the market drops, luckily have avoided being hurt by recent crashes but did have a long period of "waiting it out" on a buy to let. It makes you very wary! As we are planning to join our family on a parents visa we will need somewhere to live, and clearly it makes no sense to go to all that trouble and then live a thousand miles away. We are thinking about doing what some Londoners do (prices are still ridiculous there) and renting in one place while buying in another. We would look for a holiday property to let out as the returns are greater and we could use it ourselves, and the gains would hopefully offset much of our rent. It would be interesting to know what the flaws are in this possible plan ... (Sensible) comments would be very welcome.

Haha this insane Pom is planning to do just that. Having weathered several price boom and busts in the UK I know exactly how hard it can't hit when the market drops, luckily have avoided being hurt by recent crashes but did have a long period of "waiting it out" on a buy to let. It makes you very wary! As we are planning to join our family on a parents visa we will need somewhere to live, and clearly it makes no sense to go to all that trouble and then live a thousand miles away. We are thinking about doing what some Londoners do (prices are still ridiculous there) and renting in one place while buying in another. We would look for a holiday property to let out as the returns are greater and we could use it ourselves, and the gains would hopefully offset much of our rent. It would be interesting to know what the flaws are in this possible plan ... (Sensible) comments would be very welcome.

Strangely enough we have just been looking in a place where that is the norm.. Was up in the Noosa area just north of Brisbane where many of the flats/townhouses etc are used for this very purpose, often the site management discourage people from living in them full time (max 3 months per year all up) and rent them out for you the rest of the year. Seems the area to be is anywhere near the river in Noosaville or in Noosa heads itself. The renters on the whole seem to be a better quality than you might get in say the Gold coast. Also this part of the world is one of the few in Australia where tourist come just about all year, some places only do business during Christmas/Easter/school holidays.

Don't know about value for money though, would have to do sums and check out what the occupancy levels are on average.

Strangely enough we have just been looking in a place where that is the norm.. Was up in the Noosa area just north of Brisbane where many of the flats/townhouses etc are used for this very purpose, often the site management discourage people from living in them full time (max 3 months per year all up) and rent them out for you the rest of the year. Seems the area to be is anywhere near the river in Noosaville or in Noosa heads itself. The renters on the whole seem to be a better quality than you might get in say the Gold coast. Also this part of the world is one of the few in Australia where tourist come just about all year, some places only do business during Christmas/Easter/school holidays.

Don't know about value for money though, would have to do sums and check out what the occupancy levels are on average.

Thanks, Steve99. I'll be looking more at Noosa, have visited but never thought of it for a holiday property as its too far from Sydney where we want to live. But if we were buying to let it wouldn't matter.

I don't see any crash coming. Bear in mind Flag has been saying this every year for at least 5 years and has egg all over his face.

There were a lot of people saying that demand would support house prices in Ireland, and that a crash couldn't happen there.

Here's a debate back in 2007 in which one economist reckoned property values would track earnings, the other reckoned that they were stupidly overpriced.

And here are a few quotes from an article in the Irish Independent from about the same time. They're from paragraphs picked out at random from the piece, but I've heard similar claims made about the Australian market.

The December Budget personal taxation measures and the doubling of mortgage interest relief for first time buyers, coupled with increased competition between financial institutions, has improved affordability, even allowing for the interest rate increases which now appear to be close to their peak. We are very lucky now to have interest rates of just 3.75-4 per cent. This is very low compared to the 10-16 per cent that prevailed in Ireland in previous decades.

As one who has been involved in the Irish property market for 40 years and has experienced every type of market scenario, I am totally convinced that the market is currently in good shape and that anyone buying now will do extremely well in the years ahead. There is no better investment than Irish property at present, and I believe that I will be proved right in this conviction.

Why do we allow scaremongers and doomsayers with unfounded pessimism and unbridled negativity dictate our thinking and blunt consumer confidence?

We all know how that one turned out...

Of course, Sydney's been booming since 2008, and made a whole lot of economists look very stupid over the past decade. Steve Keen predicted a 40% collapse in prices at the tail end of the GFC, and they've doubled since then.

Agreed.

 

The auction system, and how they just keep pushing up the prices during the auction. The majority of buyer are usually now investors or foreign buyers who can and will price out first time buyers. shocking.

On the market system, and owners now getting very greedy or just grouping up to sell to developers if they still have there mcmansion.

I have watched a few, and cannot believe it is not illegal how they work it. How many times can you call going once, going twice with no one making an offer, only the auctioneer making his own next bid to start the process again.

 

Foreign investors who just buy property and then leave it sitting empty.

 

The amount of properties I see in my suburb that are empty and some which should be condemned is astonishing.

If you buy at a auction, the last two bidders are a)You and b) Dummy bidder who may be in the audience disguised as a buyer or on the phone pretending to be a out of town buyer.. Once it gets to the point that the reserve (always well above the estimated price, and they have reasons for under-quoting before the sale) is passed then they play it by ear as to how far you will take it.. The foreign Chinese that are buying big in Melbourne and Sydney will always bid more than a local. They will also buy houses that by law that they are not supposed to will very few/no repercussions. This is how the government likes it. Just like London, a massive money laundering city.

They under-quote the potential price before an auction so that on Saturday (when most auctions occur) you will get a much bigger audience if people think this house to be auctioned is in their price range, also the agents want to lure potential buyers away from their REAgent competition doing the other auctions up the road. They dont mind playing mind-games with you or leaving you out of pocket with surveys etc.. If you think REAgents in the UK are bad, these parasites are on another planet, like the one Alien came from I think. :huh:

I only had to attend about 3 auctions before I decided I wasn't interested in buying via this method - I just hated the whole charade; the bullsh1t price guides with rampant underquoting, the artificially whipped up interest, the fake bids, the money you were expected to waste (on inspections etc) and risks you were expected to take as a buyer. A totally one-sided system in a warm to hot market

I made it crystal clear to agents that whilst we were serious buyers (showed them the size of deposit and pre-arranged finance etc), if the vendors of a property were insistent on taking it to auction, we wouldn't be interested or attending

I could get away with that in the market we were in, as most vendors would do private treaty deals during the auction campaign. But I attended a number of auctions for my sister in law in a market where they wouldn't - everything was going under the hammer (Sydney Inner West). In the end she got a house out of Location Location Location

There were a lot of people saying that demand would support house prices in Ireland, and that a crash couldn't happen there.

 

Here's a debate back in 2007 in which one economist reckoned property values would track earnings, the other reckoned that they were stupidly overpriced.

 

And here are a few quotes from an article in the Irish Independent from about the same time. They're from paragraphs picked out at random from the piece, but I've heard similar claims made about the Australian market.

 

The December Budget personal taxation measures and the doubling of mortgage interest relief for first time buyers, coupled with increased competition between financial institutions, has improved affordability, even allowing for the interest rate increases which now appear to be close to their peak. We are very lucky now to have interest rates of just 3.75-4 per cent. This is very low compared to the 10-16 per cent that prevailed in Ireland in previous decades.

 

 

As one who has been involved in the Irish property market for 40 years and has experienced every type of market scenario, I am totally convinced that the market is currently in good shape and that anyone buying now will do extremely well in the years ahead. There is no better investment than Irish property at present, and I believe that I will be proved right in this conviction.

 

Why do we allow scaremongers and doomsayers with unfounded pessimism and unbridled negativity dictate our thinking and blunt consumer confidence?

 

We all know how that one turned out...

 

Of course, Sydney's been booming since 2008, and made a whole lot of economists look very stupid over the past decade. Steve Keen predicted a 40% collapse in prices at the tail end of the GFC, and they've doubled since then.

We can see how it has progressed in Sydney/Melb/Australia however many people including Steve Keen did not know how far our highly esteemed politicians would go to prop the market up. Lets look at some of these props:

Negative gearing, which is a hand out to the already well housed who are into property speculating and works against first home buyers for eg when they are competing with Speculators. For non Aus people reading this, say you buy a BTL flat, take out a massive loan and the costs over a year are more than the flat makes in returns (This is done on purpose in most cases) Then whatever loss can be put against your main work or business income and thus push you down to maybe a lower tax bracket (they have several schemes for well off people to do this and not just with speculative housing)

Capital gains tax reduction 50% on speculative property held then sold after 12months

Massive immigration scheme which is playing havoc on infrastructure and housing just like in the UK.

Open market which is encouraged for foreign buyers (particularly China) to come in keep their money safe from their own government etc, also a speculative punt. This accounts for many 1000's per year

Very lax lending standards in which Australian banks now have the highest proportion in the world of their loans going to Mortgage debt! They too are more interested in the speculators than in housing for real people.

Low interest rates.

State governments are in charge residential land releases via some crony development companies and just like the UK, land banking with drip feed land release keeps prices very high.

Like the UK the media has a very big say in house price mania as real estate businesses pay so much advertising to the news papers and other news outlets. The majority of the population are also roped into the mania and 'wealth' creation of real estate.

First home buyer grants which have been introduced on and off for a couple of decades, each time causing a surge in prices. Big one on offer in Perth now that the Mining/building/employment boom is over.

And so it goes, one thing after another.. Which one of these many props has to break to kill the market? How can some of these people still feel lucky?

I say this is far worse than Ireland

As for the quote:

'Why do we allow scaremongers and doomsayers with unfounded pessimism and unbridled negativity dictate our thinking and blunt consumer confidence?''

The same talk here of course when anyone speaks up.

I say this is one massive bubble very much looking for a pin to pop it.

If you buy at a auction, the last two bidders are a)You and b) Dummy bidder who may be in the audience disguised as a buyer or on the phone pretending to be a out of town buyer.. Once it gets to the point that the reserve (always well above the estimated price, and they have reasons for under-quoting before the sale) is passed then they play it by ear as to how far you will take it.. The foreign Chinese that are buying big in Melbourne and Sydney will always bid more than a local. They will also buy houses that by law that they are not supposed to will very few/no repercussions. This is how the government likes it. Just like London, a massive money laundering city.

 

They under-quote the potential price before an auction so that on Saturday (when most auctions occur) you will get a much bigger audience if people think this house to be auctioned is in their price range, also the agents want to lure potential buyers away from their REAgent competition doing the other auctions up the road. They dont mind playing mind-games with you or leaving you out of pocket with surveys etc.. If you think REAgents in the UK are bad, these parasites are on another planet, like the one Alien came from I think. :huh:

We can see how it has progressed in Sydney/Melb/Australia however many people including Steve Keen did not know how far our highly esteemed politicians would go to prop the market up. Lets look at some of these props:

 

Negative gearing, which is a hand out to the already well housed who are into property speculating and works against first home buyers for eg when they are competing with Speculators. For non Aus people reading this, say you buy a BTL flat, take out a massive loan and the costs over a year are more than the flat makes in returns (This is done on purpose in most cases) Then whatever loss can be put against your main work or business income and thus push you down to maybe a lower tax bracket (they have several schemes for well off people to do this and not just with speculative housing)

 

Capital gains tax reduction 50% on speculative property held then sold after 12months

 

Massive immigration scheme which is playing havoc on infrastructure and housing just like in the UK.

 

Open market which is encouraged for foreign buyers (particularly China) to come in keep their money safe from their own government etc, also a speculative punt. This accounts for many 1000's per year

 

Very lax lending standards in which Australian banks now have the highest proportion in the world of their loans going to Mortgage debt! They too are more interested in the speculators than in housing for real people.

 

Low interest rates.

 

State governments are in charge residential land releases via some crony development companies and just like the UK, land banking with drip feed land release keeps prices very high.

 

Like the UK the media has a very big say in house price mania as real estate businesses pay so much advertising to the news papers and other news outlets. The majority of the population are also roped into the mania and 'wealth' creation of real estate.

 

First home buyer grants which have been introduced on and off for a couple of decades, each time causing a surge in prices. Big one on offer in Perth now that the Mining/building/employment boom is over.

 

And so it goes, one thing after another.. Which one of these many props has to break to kill the market? How can some of these people still feel lucky?

I say this is far worse than Ireland

 

As for the quote:

'Why do we allow scaremongers and doomsayers with unfounded pessimism and unbridled negativity dictate our thinking and blunt consumer confidence?''

 

The same talk here of course when anyone speaks up.

 

I say this is one massive bubble very much looking for a pin to pop it.