If you’re mad, upset and feeling helpless about the fact that you’ll probably never get into the housing market, you’re not alone. Waleed Aly is with you.
On last night’s episode of The Project, Aly delivered a powerful six minute segment on negative gearing; breaking down what it is and who it’s affecting, all before taking a sledge hammer to government claims, and doing what no politician has ever done well – providing non-biased data to back up his analysis.
Of course he did. *Cough* Gold Logie *cough, cough* ahem, Gold Logie.
Top Comments
So apparently as part of Generation X my partner and I will never own our own home. Amazingly we do own our house (well, we have a mortgage) and we also have a few investment properties. I am 43 and my partner is 39. We both have uni degrees and have worked our entire life. So because we have investment properties we are apparently partially responsible for house prices being so expensive. There are two sides to every story, and as usual Waleed Aly only shows the side he is interested in. As part of Gen X there will undoubtedly be no pension for us. I doubt the compulsory superannuation will be enough to live off in the future. We can always put extra in our superannuation, but only so much before we are taxed for it. So, an investment property is a long term retirement strategy which will hopefully become positively geared at some point producing an income. If and when that happens tax will need to be paid on the rental return. It's all swings and roundabouts. You don't have to be wealthy to own an investment property. At the end of the day hard work and taking some calculated risks can pay off.
Brilliantly said!! That's exactly what this bloke does. Only shows 1 side of the story.
People seem to think that people that buy investment property's get them for free and live happily ever after from that point on.
I don't think they actually realize that for many, they are making sacrifices like new cars, holidays and the like the afford their rental property until such time as it starts to work for them.
I brought my first rental
Property at 22, and have since purchased 2
More. I am not driving around in a Ferrari or living in a beach front mansion.
I have worked hard all my life and an purely trying to enhance my opportunities later in life when the government has given away all of the money and made cuts to welfare. (To those that deserve it )
I could not agree more. I bought my first property at 24, my second at 29 and I am a single mum. I picked my market and I got great advice along the way. I can't help but think that the people crying I can't buy a house are trying to by an inner city property.
No one is saying it is wrong to own investment properties and making plans to be independent at retirement age, that surely is a good thing to do if you can, but that doesn't mean you should be able to claim multiple properties as a tax rebate, that is the point of this debate I think.
Couldn't agree with you more, but for every couple like you, there's another 100 couples who have slogged their guts out and will never be able to buy that first home, let alone an investment property.
Myself for example, I've worked every day of my working life - I'm 36 now and buying isn't an option for me (even though I'd be able to make repayments, which I'd rather do than pay someone else's "investment" every week), but because I wasn't lucky enough to find a partner early in life and have that double-income that most banks like to see, they won't really take a risk on a hardworking single. (ps I have a perfect credit rating, however, just 5 years ago, they still wanted a parent to co-sign a mortgage because I was of "child-bearing" age) WTF???
Is that chart the electorates with the negatively geared properties or the electorates with residents who own negatively geared properties?
What happens if you end negative gearing and house prices drop substantially. There will be thousands of home owners who now have negative equity on their homes. This means that they are stuck there and cannot move house for many years until they pay down a substantial portion of their mortgage.
Investors will likely still be inclined to target cheaper properties which will offer cash flow positive rent as opposed to negative.
Transitioning housing investment from negative gearing cannot be done on a whim because there are serious repercussions that need to be managed.
I guess that's one way of looking at it, but you are thinking worse case scenario, on the other hand if house prices slow but don't drop, that's not necessarily a bad thing. House prices have been rising out of control in Australia, and a slow down would allow more young people to enter the housing market.