Simple question.... Is living in Oz better?

[Guest]

What does that have to do with it?

 

Negative gearing is where you make a loss on a property to reduce your tax. Done properly, the loss is only on paper, not in reality - because you can claim expenses for depreciation (i.e. wear and tear), which you don't actually spend, and in the meantime, you're making money because the value of the property is going up. That has no impact whatsoever on the tenant.

 

Some stupid people are so desperate not to pay tax that they buy property that makes a genuine loss - more fool them.

 

 

Not sure why you are trying to teach me about negative gearing. But the point is if they are negative gearing the renter isn't paying off the cost of owning. In theory if invested well the renter can be better off than the owner. In parts of Brisbane the house prices haven't moved in 6 years so would have been better off renting.

[Marisawright]

Not sure why you are trying to teach me about negative gearing. But the point is if they are negative gearing the renter isn't paying off the cost of owning. In theory if invested well the renter can be better off than the owner. In parts of Brisbane the house prices haven't moved in 6 years so would have been better off renting.

 

If negative gearing is done properly, then yes the renter is paying off the cost of owning. It's a matter of ensuring you buy a property with high depreciation costs, so that the negative gearing is achieved by paper costs not real ones. All my properties were in that category and although I made a loss as far as the taxman was concerned, in reality I was in profit.

 

I agree though, I used to have several spreadsheets which analysed whether it was better to rent property or own it. In general, they showed that unless you're sure you'll be living in a property for more than five years, you are better off renting and investing your money.

 

That was the case even when house prices were rising pretty well, so now I wonder what the result would be?

[Guest]

If negative gearing is done properly, then yes the renter is paying off the cost of owning. It's a matter of ensuring you buy a property with high depreciation costs, so that the negative gearing is achieved by paper costs not real ones. All my properties were in that category and although I made a loss as far as the taxman was concerned, in reality I was in profit.

 

I agree though, I used to have several spreadsheets which analysed whether it was better to rent property or own it. In general, they showed that unless you're sure you'll be living in a property for more than five years, you are better off renting and investing your money.

 

That was the case even when house prices were rising pretty well, so now I wonder what the result would be?

 

The thing is high depreciating houses will lose value unless the land prices go up which in booming markets is fine. A new house will always sell at a big premium to the older houses (same size) on a street. I certainly wouldn't want to be buying the new apartments flying up in Brisbane at the moment, can rent them very affordably.

[Parley]

This is all a total load of rubbish.

Most people rent because they can't afford to buy or they know they can rent a nicer place than they could buy.

 

Whether the landlord is negative gearing or positive gearing is irrelevant.

The overall market determines the rent in different suburbs.

[Guest]

This is all a total load of rubbish.

Most people rent because they can't afford to buy or they know they can rent a nicer place than they could buy.

Whether the landlord is negative gearing or positive gearing is irrelevant.

The overall market determines the rent in different suburbs.

 

Exactly. So just because someone owns somewhere doesn't mean they are better off as was implied way back

[starlight7]

I don't think they will get rid of negative gearing because there are too many ramifications. Not that I agree with it,I think it unjustly puts money in the pockets of the rich. Don't care if they are 'mum and dad' investors or not- they are rich. However- a massive amount of property would flood the market at low prices and a lot of investments in things like retirement funds would be hit. Even more overseas buyers would snap up the bargains and the new young buyers may or may not get a look in. More likely mainland Chinese investors would make a killing because this country hasn't managed to regulate foreign investments in any shape or form.

[Diane]

I don't think they will get rid of negative gearing because there are too many ramifications. Not that I agree with it,I think it unjustly puts money in the pockets of the rich. Don't care if they are 'mum and dad' investors or not- they are rich. However- a massive amount of property would flood the market at low prices and a lot of investments in things like retirement funds would be hit. Even more overseas buyers would snap up the bargains and the new young buyers may or may not get a look in. More likely mainland Chinese investors would make a killing because this country hasn't managed to regulate foreign investments in any shape or form.

 

As the talk is of grandfathering existing arrangements (i.e. only making new rules apply to properties bought after the rule comes into effect) how would property flood the market?

 

If you already have a negatively geared property, you are not going to offload it just in protest at not being able to buy any more, surely?

[Guest]

Negative gearing will die when interest rates rise and a load of people go bust.

[Pommy Jimbo]

This is all a total load of rubbish.

Most people rent because they can't afford to buy or they know they can rent a nicer place than they could buy.

 

Not sure this is the case any more. Most rentals I've seen in Sydney cost very nearly as much as a mortgage and are in poor condition because the landlord wants money for jam. Not easy to find good quality rentals without paying more than the mortgage would cost you. That's my experience anyway.

[Marisawright]

The thing is high depreciating houses will lose value unless the land prices go up which in booming markets is fine. A new house will always sell at a big premium to the older houses (same size) on a street. I certainly wouldn't want to be buying the new apartments flying up in Brisbane at the moment, can rent them very affordably.

 

That's often true, it takes a lot of effort to find a property that offers the right balance between depreciation, purchase cost, rental potential and appreciation potential. Which explains why I've owned only a few investment properties in my time - I have never been prepared to buy one where that balance wasn't right.

[Bibbs]

By the way thought Barcelona had the reputation of being one the most likely places to be mugged and robbed!!!?

 

It used to be like that. Not anymore.

 

Very visible Police activity now makes it quite safe.

 

Which is a shame, as it's also lost a bit of it's edge and vibe because of this.

[ali]

I am more content here than I was in the Uk. I travel more Km's to work - yet the journey is shorter, I work slightly more hours (40 as opposed to 37.5), but get an extra day off a month because of it so they're a bonus to me.

 

I think it's all about perspective to be honest

[VERYSTORMY]

We did almost all of our Asian holidays from the UK before we moved to Oz and found it was no more expensive than doing it from Oz - if anything cheaper. We will also be doing a lot of Europe trips now back in the UK. There are people I work with that head off for weekends in Europe every few weeks.

[Guest]

Skyscanner disagrees.

[JockinTas]

We did almost all of our Asian holidays from the UK before we moved to Oz and found it was no more expensive than doing it from Oz - if anything cheaper. We will also be doing a lot of Europe trips now back in the UK. There are people I work with that head off for weekends in Europe every few weeks.

 

Can't agree with you. My sister and I used to meet up in Thailand/Singapore/Vietnam. She flew from London and I flew from Sydney. Her airfares were far higher than mine. Last time we did it was 3 years ago. Maybe fares from the UK to Asia are cheaper now.

[tea4too]

Can't agree with you. My sister and I used to meet up in Thailand/Singapore/Vietnam. She flew from London and I flew from Sydney. Her airfares were far higher than mine. Last time we did it was 3 years ago. Maybe fares from the UK to Asia are cheaper now.

 

Genuine question – isn’t it difficult to work out what is cheaper/ more expensive when much depends on exchange rates, rates of salary for similar work and other such factors? For example if two newly qualified teacher’s, one working in Aus the other in the UK, decide to meet up in Asia and the holiday works out at 20% of teacher A’s monthly salary, and 25% of teacher B’s, it is irrelevant who actually paid the most in cash terms. Teacher A has the cheaper deal….I think, but my head hurts now :confused: and hopefully some one much better qualified will explain how it really works. T x

[Parley]

That is clutching at straws.

[VERYSTORMY]

Can't agree with you. My sister and I used to meet up in Thailand/Singapore/Vietnam. She flew from London and I flew from Sydney. Her airfares were far higher than mine. Last time we did it was 3 years ago. Maybe fares from the UK to Asia are cheaper now.

 

I have just had a look at expedia.co.uk and expedia.com.au - so same company. Plugged in the same hotel, which is one we have stayed at previously - The Anantara Koh Samui. For the same week - departing a week today. I chose flights from Sydney and London.

 

The UK holiday comes out at £932. From Australia, $2071. At todays exchange rate, £932 = $1832

[Guest]

Thought you lived in Perth? Though fantastically specific scenario. Who books a specific destination and hotel a week out? Nice tactical destination where none of the budget airlines fly direct to from Oz. You should be a politician....

[starlight7]

Perth factor? They pay more for just about everything it seems.

[Guest]

Perth factor? They pay more for just about everything it seems.

 

Perth dirt cheap to Malaysia, Bangkok, Bali etc

[Pommy Jimbo]

Think Perth's come down in price a bit since the mining bust.

[tea4too]

That is clutching at straws.

 

Not sure what you are referring to Parley but if it relates to my post, I wasn't attempting to clutch at anything other than how comparisons between two economies, thousands of miles apart, might be accurately measured... and I didn't pretend to know the answer, just asked a question with an example to clarify. But I'm guessing you don't know either?:wub: T x

[VERYSTORMY]

Thought you lived in Perth? Though fantastically specific scenario. Who books a specific destination and hotel a week out? Nice tactical destination where none of the budget airlines fly direct to from Oz. You should be a politician....

 

I left it at Sydney simply because it defaulted to there when I filled the form in and couldn't be bothered changing it after it had searched. I am sure Bali would be cheaper and I have never been, but my wife did and described it as Benidorm in Asia but with more drunks.

[dxboz]

Think Perth's come down in price a bit since the mining bust.

 

Would be great if it had but personally have not seen any evidence of this unfortunately