Oh dear... socialists think that can manipulate the market

[annielaurie]

Re: Oh dear... socialists think that can manipulate the market
by lisa jones on Wed Apr 20, 2011 11:59 am

What a load of rubbish! Just log in with your Sappho a/c and pretend you're normal FFS!

I agree! Sappho, get yer butt back in here and start posting again, okay?

[Jovial Monk]

“pretend you are normal” what a lovely clause. WTF wants real “normal” people, boring!

[lisa jones]

Yeah .. that's a line I use quite a lot in real life Mr Monk lol

[Leftwinger]

I have some correspondence every now and then with a Brisbane mortgage broker. Though we are on opposite sides of the debate, I respect his calm, rational approach to arguing. There’s no emotional outbursts or trash talk from him. However, there is one question that I don’t feel he has ever satisfactorily answered, giving brief dodging or brushing off–type answers – how much more can the average person keep paying for housing?

FINALLY!!!!

"I'm just interested in someone finally, clearly spelling out exactly how mortgage repayments as a percentage of the average household income will simply continue to increase significantly past where they are now so prices can continue to rise faster than real incomes.

At some point, large numbers of average people paying 50% plus of their income in debt repayments must begin to act as a drag on aggregate demand."


Well lefty - you asked for a simple reply - so here goes.

THEY WON'T.

House payments will now get more affordable, they have peaked as a proportion of household income.

Thank you for your candid response Peter. I know your livelyhood depends on selling mortgages and products based on them so I appreciate your honesty in the matter.

[Jovial Monk]

Hmmm so the market has peaked? Even a rate cut is possible I would think.

[Leftwinger]

Look out IQ - the "commie brownshirts" might be coming for your legendary investment property portfolio....

Talks test the water on negative gearing change April 21, 2011

THE Gillard government has sounded out unions over steps to cool Australia's housing market, with measures that range from a new sales tax for investors sitting on large property portfolios, to curbing the popular strategy of using negative gearing for multiple properties.

Senior federal Labor figures and key union backers are believed to have discussed the plan as a way to tackle housing affordability. Details of the proposals, which would apply to home owners with two or more investment properties, have not yet been developed. The talks come before a tax summit planned for later this year.

Negative gearing of investment properties has evolved over time into something of a sham - despite the insistence of the real eastate lobby, who badgered Keating after he intitially removed it until he eventually relented and reinstated it - it has been clearly demonstrated to do nothing for affordability or availability of supply. In fact, it has acted in the opposite direction.

If implemented, the moves would mark some of the biggest changes to property tax in nearly two decades, particularly in tackling the politically thorny issue of negative gearing, which provides billions of dollars of tax breaks to millions of Australians.

But to reduce political risk, the changes have been designed to target only the wealthiest property owners, leaving those with one investment property untouched.

One change believed to have been discussed is for owners of multiple investment properties to pay a levy of 4 per cent of sale price at the time of sale, on top of state-based taxes.

Another proposal is to scale back the negative gearing tax benefit from its 100 per cent benefit as the number of investment properties rise.

The proposals came as Mr Swan yesterday warned of a difficult budget against the backdrop of natural disasters and softer near-term economic conditions. He cautioned a return to boom conditions would stretch the economy's capacity over coming years, but without the revenue surge.

About 1.7 million property owners used negative gearing in the 2009 financial year, claiming rental losses as a tax offset. This generated a net rental loss of $6.5 billion for the financial year, Tax Office figures show.

They show about 1.19 million Australians own one investment property. About 294,000 have two investment properties, while those with three number 88,300.

Meanwhile, about 14,100 Australians have six or more investment properties, the figures show.

http://www.smh.com.au/national/talks-te ... 1doxq.html

I’m not sure to what extent leaving the owners of only one investment property untouched will have on the overall situation since they constitute the overwhelming majority. It may be part of a steady, progressive windown. But it’s only a proposal at this stage.
My own thoughts on the matter would be to let existing arrangements stand (to minimise disruption) but only allow further negative gearing on newly constructed dwellings. This might minimise the tendency of investors to overwhelmingly purchase existing dwellings, which does nothing positive for supply and merely ends up pushing up the price of older, cheaper dwellings that first-time buyers could have otherwise afforded.

Meanwhile.......

RESIDENTIAL land sales have tumbled to the lowest level in 16 years as the malaise besetting Melbourne's housing sector infects the deepest layers of the property market.

Data released yesterday by the Housing Industry Association sheds new light on the severity of the downturn in house building activity as prices for established homes turn south.

The volume of land sales nationally collapsed in the final months of 2010, down more than 40 per cent in the three months to December compared with the same quarter a year earlier.

It was the fifth consecutive quarter that sales declined as supply constraints and risk aversion among lenders and borrowers weighed drastically on the property development market. In Melbourne, sales have plummeted about 65 per cent from almost 6500 lots at the peak of the market in the September quarter of 2009.

About 2100 lots sold in the three months to December - the least for any quarter since 1995

http://www.heraldsun.com.au/business/la ... 6041208508
WE should remember that the US housing market did not all slump at once - it spread from city to city in an initially steady chain reaction.

[Leftwinger]

It pays to remember that a significant property price correction can have effects more far and wide reaching than on those directly involved in the industry or the investment property game...

Investors warned of 20% losses

THE frozen mortgage fund Equititrust has told furious investors in its income fund that they could lose up to 20 per cent of their investment because the value of property development sites has plunged.

The chief executive, David Kennedy, said he had told the group of mostly elderly investors that the ''worst case scenario'' for the $260 million fund was that it may only pay out 80¢ in the dollar when it is ''thawed'' later this year.

He offered cold comfort, telling BusinessDay that they would be better off than the tens of thousands of investors in the Gold Coast financial group MFS who received considerably less after it collapsed. Mr Kennedy is the former chief operating officer of MFS.

http://www.smh.com.au/business/investor ... 1dowv.html

I recall reading an email from a bank employee late last year, who had attended an investment seminar organised by his employer (one of the big 4). The seminar was given by an “investment guru” who was asked a number of questions regarding investing in residential property. His advice was very clear: “Stay away from it”.
Y’know, it’s kind of ironic that the banks retail arm was continuing to write out investment property loans hand over fist while the same banks investment arm was advising it’s own employees to not touch the game with a 20ft pole.
We have created a conundrum for ourselves – property prices have risen so high that they are struggling to go higher and must come down if the average person is to be once again able to reasonabley afford ownership of the roof over their head. Yet a sharp correction would be economically and socially destructive.
We never would have gotten to this point without a deregulated financial sector, greedily handing out loans to ordinary people of a size that would have been unthinkable when I first applied for a mortgage.

[Sangster]

It pays to remember that a significant property price correction can have effects more far and wide reaching than on those directly involved in the industry or the investment property game...

Investors warned of 20% losses

THE frozen mortgage fund Equititrust has told furious investors in its income fund that they could lose up to 20 per cent of their investment because the value of property development sites has plunged.

The chief executive, David Kennedy, said he had told the group of mostly elderly investors that the ''worst case scenario'' for the $260 million fund was that it may only pay out 80¢ in the dollar when it is ''thawed'' later this year.

He offered cold comfort, telling BusinessDay that they would be better off than the tens of thousands of investors in the Gold Coast financial group MFS who received considerably less after it collapsed. Mr Kennedy is the former chief operating officer of MFS.

http://www.smh.com.au/business/investor ... 1dowv.html

I recall reading an email from a bank employee late last year, who had attended an investment seminar organised by his employer (one of the big 4). The seminar was given by an “investment guru” who was asked a number of questions regarding investing in residential property. His advice was very clear: “Stay away from it”.
Y’know, it’s kind of ironic that the banks retail arm was continuing to write out investment property loans hand over fist while the same banks investment arm was advising it’s own employees to not touch the game with a 20ft pole.
We have created a conundrum for ourselves – property prices have risen so high that they are struggling to go higher and must come down if the average person is to be once again able to reasonabley afford ownership of the roof over their head. Yet a sharp correction would be economically and socially destructive.
We never would have gotten to this point without a deregulated financial sector, greedily handing out loans to ordinary people of a size that would have been unthinkable when I first applied for a mortgage.

Investment seminars are set up for dumb shits who barely earn the average income ($63,000?) and vote ALP.

[Leftwinger]

And the ignore function is set up so I don't have to read the pointless dribble of pitiful fuckwits such as yourself. Time to start using it I think.

[IQS.RLOW]

And the ignore function is set up so I don't have to read the pointless dribble of pitiful fuckwits such as yourself. Time to start using it I think.

Truth hurts, don't it...