canifixit

Also favours high end earners who would otherwise pay large tax bills. Get large loans on houses (even if you have the money) and offset losses against your tax. Then sit back and let capital gain earn your fortune. If the housing market goes in to free-fall then sell or pay of mortgages.
As usual the timing is everything.
Just glad U.K. Tax Office does'nt allow this sort of negative gearing.

thebears

I do remember in late 80's being a particularly difficult time for people on the Gold Coast. No jobs, high mortgages, low property values.

The low unemployment figures are a serious red herring over here - look at what is coming post the next elections with IR reform. Companies are just itching to outsource away from control of unions.

For the negative gearing - it is currently under taxation review, so watch this space.

jad n rich

Poms are always puzzled by australias negative gearing, if you ask an older aussie its because austrians never really expected a state pension, its asset tested at a very low level, have assets no pension.

The way most aussies build a pension is through investment property, and lets face it if you dont panic every time there is a rate rise dip economic blip, buying a house over a persons working life would in any country be worth a massive amount more than what they bought it for. That was aussies pensions, government was sympathtic and encouraged it.

New tax/super changes may see it changed but people say last time neg gearing was stopped a huge rental shortage developed rents needed to double or treble to encourage people to buy and let again so the gov brought it straight back in.

jad n rich

Land starts around $300,000+ for acerage (2 - 5) half hour to brisbane, good areas, much less if you are not so worried about the area. Going up in price of course if you came further in.

Sunshine coast, 15 mins from beach and CBD similar prices also starting aruond the $300,000.

If you find acerage closer to the beach, city, it goes up significantly from that of course.

BadgeIsBack

Very true. Some experts claim that it is important to have the loan structures to ride out the lows as well as the highs, and that as its the time you spend IN the market that makes you money, in this regard, it is 'always' a good time to buy investment property as long as you have equity, good financing and a means of paying the mortgage and costs. This does not apply to first time buyers or people with low equity of course.

People only really get in to trouble if they are forced to sell. The loan structure you get is as important as the market to a point.

Exile

Industry people will sometimes tell you that it's always a good time as they have vested interests. Buying just before a property crash is never really the best time. Trouble is, it's hard to know when a crash is coming.

temptininnit

That seems the way in the UK too, the press releases covered on the TV always add to the hysteria. Quotes telling us prices continue to rise make no mention of it being in London and south east only. The rest of the country follows blindly. Vendors get greedy and bump the price up more than similar properties in the area, estate agents quote high to meet vendors expectations and gain trade.

It's got to burst one day.

Luma

There are so many more people that are going to be moving to Perth as there was such a huge skills drive at the end of last year in the UK and in other countries so a lot of people have been granted their visas around now and will start arriving. Most people want to own a house if they can rather than rent so I don't see the house prices cooling as there is going to be a continuing high demand for houses.

tucs

Was talking to an estate agent on the phone and i asked him if the house prices were expected to drop, he told me that there is approx 4000 people arriving evry week in Perth alone. They all have to live somewhere, so rental and property prices are only going in one direction

NKSK version 2

You didn't expect him to say anything other than that did you?

temptininnit

I trust agents too!

touchingcloth

208,000 migrants to Perth a year? Yeh...right.

geordie downunder

I have no idea what the straw will be,I cannot predict the future and have no idea of each individuals financial circumstances.For me a rate of 10-11% would send me back to work full time probably,but I would be kicking and screaming.If asset values did not fall too much i would probably sell something,or convert shares to warrants to increase income.The other side of the coin is as asset values fall yields tend to rise,there may be a lot of high yield bargains going so it would depend on my cash flow situation at the time.Also a figure of 40% springs to mind (could be wrong) of mortgage payers,a lot of them will only have small mortgages and be near completion of payments,high interest rates mainly hit young people as it increases their costs,and old self funded retirees get an increase in income as the rates rise.

BadgeIsBack

Thing is though 'zulu, is that people claim to want the 70pc but then complain about it for years.....that's the final irony.

I can never understand the obession with bushfires - and I'm a fireman. If I may, I'll put it better - it would not determine whether I would move to a 'bush' area at all. I wouldn't turn down semi-rural living just because of a perceived fire risk.

If it happens you have insurance. It's highly unlikely you will die in one - you wouldn't need to stay awake over it - just a bit of preparation. Stay or leave early good enough for 90pc of people.

You'd have to be VERY unlucky to get caught in one, and then you need to take the right option(s).

geordie downunder

As far as I am aware the Buy to let system is the same,interest ,repairs etc are a tax deduction, a cost incurred in earning income (rent).The difference may be that tax avoidance is a national sport and has a huge marketing machine here to push it,if shite is advertised and repeated often enough it will be taken as great wisdom.If a business broker advertised a business as "wonderful opportunity,lose $30,000 every year and get $9,000 back from the tax man" do you think anybody would buy that business.In real estate speak "reduce your tax and become wealthy through negative gearing,seminar at etc",same shite different wording,of course people want to be wealthy,of course they want to pay less tax,they never realise they also have less money in the pocket every week.