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9th March 2020, 10:40 AM
#1
Australian Housing Market.
Can anyone in Australia tell me how the lowering of interest rates is supposed to alleviate the housing market ? By lowering the bank interest rates you are forcing self funded retirees more than likely to become dependent on state and government pensions. It may enable mortgage rates to be more available , but to most it appears to be cutting off Paul to pay Peter.
Would it be more profitable all round to do as they usd to do in the UK and probably still do, to give tax concessions on interest on their own mortgages , or is this too hard for our politicians to understand.
It seems very obtuse to allow tax concessions on second and third or 2 or 3 dozen as the case may be, which we proudly call secondary gearing or something similar. Although this supposedly alleviates government for building so called council houses as the entrepreneurs make use of this system for rental properties and charge whatever the market will take. We have a large contingent of self funded retirees , I am not one of them, but I can see they are paying for the fact they were frugal throughout their working lives. JS
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9th March 2020, 11:09 AM
#2
Re: Australian Housing Market.
The tax relief on mortgages went years ago in UK John, interest rates here are at rock bottom, any money you have for rainy days gets diddly squat for interest. In my opinion the biggest problem here with housing is the pay out of housing allowance, so the rents are huge, and paid on benefit, so to encourage that person to go out to work, probably on low wages, the benefit of housing allowance stops, and they are worse off, as said my opinion only but housing allowance sucks, kt
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9th March 2020, 11:55 AM
#3
Re: Australian Housing Market.
Thanks Keith I am nearly 30 years out of. Date with the uk system. But in my time buying a house there the interest rates were about 8.5 percent but was allowed a tax rebate on this.Here in Australia you are allowed tax concessions only on other property’s that you don’t live in. Which used to keep the rental markets quite busy as was tax deductible all repairs and maintainance on those structures . Seems to me money is not meant to go around like it used to. Cheers JS
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9th March 2020, 07:30 PM
#4
Re: Australian Housing Market.
My first house, Los Angeles, Calif. I mortgaged it for 6.5% interest.* I sold it three years later and made 30% of the* sale price profit. *
I was transferred to Iran for 3.5 years, then transferred back to the US. and New York City, and bought a house in Connecticut.* Interest rate was 12%.*
I retired 5 years later, but I retained the house as my half of a divorce settlement.* I rented the house out while my new wife and I went walkabout and after paying the mortgage, insurance etc. still had income.
*
I sold the house 13 years later for a total of 18 years that I owned it and sold it for roughly three times the price I paid for it.*
My last home was in South Carolina.* I didn't do so good on that one, 6% mortgage interest, owning it for 23 years, but only made about 15% profit.
What it sort of told me was the great years of real estate being the vehicle to retirement profits for today's investor could be over.
Though mortgage rates are way low, insurance for a home owner, and R.E. taxes are high and growing higher.* Insurance rates are effected by claims and these fires that destroy whole townships as in California and perhaps Oz. adding flooding and more hurricanes than usual and that insurance companies are not in it to lose money, the rates go up.
Adding to this, people though living longer, have and are not having the same amount of children, births are down.* Many sections of the employment market no longer exist, whole industries have been lost, or retooled to use less employers.**
Immigrants used to be welcomed to do a lot of jobs that don't exist today.* Favorable countries to migrate to only want the very top, computer senior staff and simarlar types, or dirty hands workers, to do the necessary jobs* native workers wont do* The mid level jobs that were stepping stones for the immigrant are no longer there.
So these factors, population increased through births, restrictive imigration, and limited oportunities to move up which includes moving upward in homes along with advancement in career are stifling real estate and are reflected ultimately in the prices.
My bottom line is real estate is not the big profit maker it has been.* It's very tough for today's worker.* Pensions, or even long term employment, are becoming rarer than hen's teeth, Interest rates on savings are a joke, soon the banks will move in to negative rates and we will have to pay them to store our savings.
*
It has always been proposed, that stocks, bonds and mutual funds are the way to go.* Yes they are, if you have a crystal ball that tells you what company to invest in that will be around in 25 years or so.* And mutual funds have the same problem. they each have investment portfolios that specialize in different industries.
Good luck in picking to the up and coming.
Cheers Rodney
Sorry, no time to edit the bloody stars out Grrrrrr!
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9th March 2020, 07:49 PM
#5
Re: Australian Housing Market.
I think in many ways we deceive ourselves on what we *make * on the houses we live in, we live in a house for say ten years and make a perceived profit over what we paid for it. We don't usually count how much we spend on it for example, plus the house we go to buy afterwards has gone up by roughly the same percentage, and we all have to live somewhere. seems to me that you only make a decent amount of money on a house, if you have been left one in a will, kt
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10th March 2020, 12:06 AM
#6
Re: Australian Housing Market.
The only time I got a llow interest rate was working for John I Jacobs , if you were on contract with them they would loan you money at 4% so I changed over. However it only lasted 2 years as they went bust.however they gave you 12 months to redeem the mortgage. One of the reasons I have a soft spot as one of the best British company’s I worked for. JS
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10th March 2020, 04:28 AM
#7
Re: Australian Housing Market.
HI John.
The interest rates are based on the Sydney and Melbourne housing markets, and only in the influential suburbs. When Labour was going to stop Negative gearing, that is getting a tax break on all the houses you are renting out, out the screams were very loud, then when they decided they would stop the double tax taking by self retired pensioners with shares in the in the stock market, it was on for young and old. Now the screams can be heard in Canberra over the half % they are getting, they are not happy Jan. But don't worry, according to the Liberals they are the best money managers, so they wont be giving money to the people like Labour did in the 2000 disaster that puled us out of the Dunny.
Des
Last edited by Des Taff Jenkins; 10th March 2020 at 04:29 AM.
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10th March 2020, 05:11 AM
#8
Re: Australian Housing Market.
The house we now live in was at one time with interest rates at 18%.
But cuts of 0.25% when rates are so low anyway will have no beneficial effect on any thing apart from pushing up the price off housing in capital cities.
Negative gearing was abolished by the Hawke gov, but with in two years was back, lack of rentals as those who rented out sold up when the gearing went.
As for Rudd, the dud, his attempt at fixing things when the credit squeeze of 2008 did little for the economy.
Money given out was spent on items such as TV from overseas, or overseas holidays.
The Pink Bats scheme is still being rectified after all this time, and the school halls scheme was a disaster.
Henry was Reserve bank manager and he advised him to do this.
But after it all died down said that in hind sight giving tax relief or payroll tax relief to companies would have seen more kept in employment.
That is what I think the current lot will do. Hand outs do not always go to the right place.
Deeming rates will be cut, good news for those with super.
As for buying a house yes you need a deposit, but you must have a plan to save.
Not like two I know who spend about $20 a day on coffee and tell me they cannot save any money!!!!
Last edited by happy daze john in oz; 10th March 2020 at 05:13 AM.
Happy daze John in Oz.
Life is too short to blend in.
John Strange R737787
World Traveller
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10th March 2020, 11:14 AM
#9
Re: Australian Housing Market.
There has been much talk about the aspect of 'Negative Gearing' and that it is unfair to others who pay tax.
But this is how it is, if for instance you own a couple of investment properties and rent them out you are according to the Tax Office running a business.
Like any business you ae allowed to offset any loss against your income, that is exactly what the gearing does.
Happy daze John in Oz.
Life is too short to blend in.
John Strange R737787
World Traveller
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10th March 2020, 01:38 PM
#10
Re: Australian Housing Market.
Thats the same here John, but they come for the tax when you sell the property, kt
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