Dick explains housing affordability

14/08/2017 – Sydney Morning Herald
11/08/2017 – Australian Financial Review
10/08/2017 – Manly Daily
11/08/2017 – West Australian
10/08/2017 – The Australian

Comments

  1. Why don’t you stand up for federal election? “You will have my vote.”

  2. Canada went one further and stopped non-resident overseas buyers buying in to Canadian residential real estate, prices in Vancouver tumbled and became much more affordable for local residents. NZ will soon follow. Australia? The Ponzi scheme will tumble, eventually! Economic law of gravity: that which goes up comes down again! True also, generous capital gains tax concessions didn’t help, let alone the massive immigration rate.

    Negative gearing was the least impactful, we’ve had it for over 100 years, it’s not pushing up prices where there’s no demand (country Australia) and neg. gearing is standard business tax policy. Labor’s do little answer won’t chop prices by much either, it’s about as helpful as chopping the carbon charge from power bills was. When will the gimmicks and lies wars stop?

    Only cutting demand (high immigration) and stopping foreign investors speculating on local residential property will have real effects. Labor’s answer fiddles at the edges and is just ideologically directed at left leaning voters to distract from real answers.

  3. The confusion over the effects of negative gearing obscures the real issue, which is the overly generous capital gains tax discount. Investors who negatively gear make an annual loss which is diminished but not eliminated by the annual tax deduction against other income. They continue to tolerate the reduced loss each year while they wait for a capital gain. The huge increase in negative gearing followed the introduction of a fifty percent capital gains tax discount for holding the asset for only one year. Previously the capital gains tax discount was the inflation rate each year. With inflation averaging less than three percent a year, a discount of fifty percent in the first year is overly generous and rewards short-term speculation like buying off the plan units. A fairer solution would be a discount of five per cent for each year the asset was held with a cap of fifty percent after ten years, which would reward long term investing.

    1. Really good point. Have you read my Dick Smith Fair Go Housing Affordability document, see it here
      I think we tried to make the point that the negative gearing is not the only issue but it is also the generous capital gains tax discount.

      Thanks for your important post.

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