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Social Market Solutions: Affordable Housing

A crisis of unaffordable housing and rental levels afflicts Australian metropolitan and regional cities. Negative gearing taxation rewards are decreasing housing affordability, particularly at the lower-income levels of the housing market. Do strategies exist to fix this affordability mess? Denis Bright reports.

The desperate problem of housing affordability is well publicized in the mainstream media. The electorate would welcome more focus on the solutions to this impasse which might require a reappraisal of the ideal of a house in leafy suburbs at great commuting distance from work and educational institutions.

As portrayed by the director Bobby Cohen, Sam Mendes and Scott Rudin in Revolutionary Road (2008), Frank and April Wheeler could not cope with the demands of life in suburbanized Connecticut in the 1950s when life was still very affordable in this hypothetical movie set away from the real politics of the McCarthy Era.

Are our leaders aware of the toxic mix of unaffordable housing prices and rental levels at a time when real wages of lower income workers are now in decline in the new social realities of urban Australia?

The Demographia Index of median housing prices as a multiple of median income levels housing prices in some locations with overseas examples is all too familiar.

With median home prices in Sydney now running at over 12 years of median salaries, the financial challenges are almost impossible as shown by the latest saga of the Demographia Index (ABC News Online 7 November 2016).

The Demographia Index in action

As much of this subsidized negative gearing investment goes to the middle and upper ends of the housing market, generous taxation concession do little to to extend the housing and rental supply curves for lower income families.

Without a progressive paradigm change at the lower end of the property market, property investors are keen to buy up every available workers’ cottage and habitable packing shed.

Former whistle stops on the way north to the Sunshine Coast north of Brisbane will be recycled into new outer suburbs in the 2020s.

This interactive and innovative real estate web site talks up the benefits of investing in Elimbah in the twilight zone between the urban sprawl from the Brisbane Metropolitan Region and the Sunshine Coast.

Federal taxation concessions to the tune of $11 billion to support negative gearing could be better spent to support lower income families.

As investments in strategically located communities like Elimbah became a haven for property investors, the prospects for affordable houses and rental levels for lower income families are somewhat diminished. Median housing prices of $545,000 and rental levels of $450/week are hardly affordable at close to 60 kilometres north of Brisbane’s CBD.

Replacing Australia’s current housing model with Singapore’s regulated housing market would not be an acceptable policy change here because of the widespread attachment to market fueled diversity in the property market. Ninety (90) per cent of residents live in public housing (Singapore Housing and Development Board Online 2017).

Pragmatic policy options do exist to ease Australians out of their reliance on the market for the delivery of housing and related community development options such as public transport, sporting and cultural networks. This does not mean a return to the public housing suburbs which were available for the first post-1945 generation and the changes might attract bipartisan support.

In South Australia, Elizabeth certainly delivered affordable housing and rental options through the integrated state planning models of the SA Housing Trust (ifech Media Online 2016).

Rentals were available for a few dollars a week near permanent jobs which could be the envy of a new generation of Australians.

The South Australian Government retains an Affordable Homes Programme.

Properties available are largely newly built houses, house-and-land packages, and former public housing properties which are all available for less than $370,000. Applications are means-tested and available only to first home buyers (https://affordablehomes.sa.gov.au/).

Former public sector houses still have a respectable commercial value in Elizabeth and adjacent Salisbury as shown in a recent Ray White advertisement.

On Brisbane’s Southside, in Coopers Plains, global real estate giant Colliers International is redeveloping former public house estates. This has attracted an investment of $600 million in town houses for sale or rent.

Demolishing former public housing estates adds to housing supply problem at the lower end of the housing market. For such corporate giants, recycling these former public housing estates is just another niche in the wider property market of inner city home units, office complexes and industrial estates.

There is scant evidence that market forces alone can deliver such outcomes. It is hardly the fault of property developers if the current negative gearing system is oriented towards the middle and upper ends of the housing market.

State governments have the policy capacity to steer property developers in more positive directions by rebuilding an affordable social market in housing and community development. Current housing prices are moving in radically different directions.

The price for units developed by Colliers International at Killara on Sydney’s North Shore Line commences at $1.050 million for units without garage space. Units in Collier International’s Mary Lane in Brisbane with one car space are priced from $830,000 for a two bedroom apartment.

The opportunism shown by political leaders in negative gearing property investments should be a cause for real concern:

Almost one in two federal politicians own an investment property, according to an analysis of their registers of interests.

The publicly available forms show that at least 97 federal members and senators, or their partners, own an investment property.

A handful own more than 10, while 50 MPs own more than two investment properties.

But as all sides of politics debate the merits of negative gearing – how many federal politicians are negative gearing their own investment properties?

Consolidating Remnants of the Australian Social Market in Housing

Just some of the $11 billion that is currently being allocated by the federal LNP to negative gearing taxation concessions could provide the initial seed capital for housing funds in the states and territories. Additional investment could be encouraged from the Australian and overseas corporate sectors as commercial and public relations priorities.

Such integrated development packages could be provided through public-private partnerships with the housing funds at minimal cost to the government sector.

Hedge-fund investments in corporatized public sector housing funds at national, state or territory levels could provide immense advantages to business corporations and entrepreneurs from adjacent Asian markets in particular. The appeal of investment in a stable economy with a strong currency could be irresistible in the context of current global financial volatility.

For Australian corporations, the prestige in being involved in delivering integrated development projects with a quota of affordable housing units might have immense public relations value. Corporate logos were clearly visible on the recyclable bags offered to support the recent Clean Up Australia Day. Why not extend this to support for affordable housing and community development strategies?

Although the housing components of the Central Park Development Project on Sydney’s Broadway are directed largely to the upper end of the housing market, the capacity of developers to recycle similar residential and industrial land near transport hubs is worth more consideration as an achievable option through new private-public partnerships.

Even without these social market structures, co-operation between the Ipswich City Council and major construction firm Sekisui House is delivering new communities in the Ripley Valley within the constraints of existing market-oriented housing models.

The $1.5 billion Ripley Town Centre is leading the way in smart and sustainable design, by re-imagining how a community interacts with its surrounds. Once complete, the world-class destination will be a shining example of urban construction living harmoniously with nature, featuring tree-lined streets and laneways, parklands, leafy walkways, green rooftops and so much more. But it’s not just nature that will feel the benefit of this sprawling 25-hectare precinct.

This style of development has its limitations as the preferred housing supply curve usually favours commercial priorities without the infusion of government-sponsored social housing priorities.

In the case of the West Village Project in Inner Brisbane, the Queensland Government has intervened to reduce the intensity of development which was approved under the Brisbane City Council Plan to modify the intensity of redevelopment.

Policy steering mechanisms should have been available to widen housing affordability levels in this project (ABC News Online 7 November 2016).

Property developer Sekisui House has responded predictably with a restatement of the financial advantages of its local construction projects to the Queensland economy.

Japanese development giant Seki­sui House is forging ahead with $3.7 billion of works in southeast Queensland, including its controversial Brisbane and Sunshine Coast developments.

The Tokyo and Osaka-listed company — among the world’s biggest residential builders — is set to launch its $800 million West Village mixed-use development in Brisbane’s West End and is ­pursuing its $900m hotel and residential complex at Yaroomba Beach, near Coolum on the Sunshine Coast. It is also beginning construction of its $1.5bn ­Ipswich development, Ripley Valley Town Centre, with the appointment of Hutchinson Builders for the $40m retail first stage Largely absent from the current debate over the future of West Village is the up-market nature of the housing options.

Progressive future housing funds can assist in adding new diversity to the outcomes of integrated property developments without compromising the profitability of the entire projects.

The best defence against the high levels of support for One Nation in disadvantaged outer metropolitan, regional and and rural electorates at the forthcoming Queensland state election is surely to offer solutions to real affordability problems at a time when wage rates and employment levels are being systematically eroded by the federal LNP.

 

Denis Bright (pictured) is a registered teacher and a member of the Media, Entertainment and Arts Alliance (MEAA). Denis has recent postgraduate qualifications in journalism, public policy and international relations. He is interested in promoting discussion about progressive pragmatic public policies compatible with contemporary globalization.

 

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73 comments

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  1. Freethinker

    By my personal experience ( and perhaps the experience of many) one of the big problems that I have found it is the red tape and rules by the local councils regarding double occupancy.
    Another barrier and struggle for many is the building codes for those that would like to build a tiny house not only in Australia but world wide.
    Some read about this is here: https://en.wikipedia.org/wiki/Tiny_house_movement.
    http://www.heraldsun.com.au/news/special-features/in-depth/living-small-the-tiny-house-movement-grows-in-australia/news-story/435d87004a787c5c60be8471b6f2b3f3

    Not only the council put a lot of barriers to have an extra small dwelling in the back yard in large blocks but also the neighbor have the power to stop the proposed building.

    This can help a lot in house affordability and IMO it is time that the state and federal governments look into this problem.

  2. Gavin

    The LNP has no intention to make housing affordable, ever – the local rep for Goldman Sachs the rep for the Property Council of Australia are seeing to it.

    Each time someone becomes a home owner that is one less renter – how is that fair in the eye’s of investors?

    Government is all over the housing unaffordability issue:
    – Negative gearing for existing homes provides no construction jobs;
    – CGT discount is an ATO freebie for the wealthier among us and is clearly inflationary;
    – Allowing students and temporary residents to buy existing homes creates unnecessary competition;
    – Irresponsible bank lending should be the subject of a Royal Commission;
    – 2nd tranche of Anti-Money Laundering legislation has been on hold for 10 years now;
    – Land-banking and vacant dwelling syndrome is alive and well and impacting the broader economy;
    – APRA mandated land inflation at 10 per cent at the same time the CPI is about 2 per cent;
    – SMSFs being allowed to borrow has put the whole super industry at risk, etc.

    I no longer believe anything that comes out of the mouth of the Treasurer, he’s got an agenda.
    Finding ways to further enrich investors is what the LNP does.

  3. Carol Taylor

    Freethinker, as a former Shire Councillor, we had to consider many aspects when approving housing, one being was the infrastructure sufficient to cope with the sharp increase in population density, the roads, the drainage, recreational facilities, schools. How might the wellbeing of existing rate payers be effected by things such as parking and noise. Would the development set a precedent which would effect the overall amenity of the area.

    Neighbors do not have specific powers to stop developments going ahead but they do have the right to lodge objections. Usually a extra small dwelling in the backyard would receive approval as it would come under the category of a “granny flat”. This is most Councils and don’t know of any exceptions, at least in Victoria.

  4. Freethinker

    Carol, I respect your background and opinion about the subject but I can telling you that all that considerations that you are mention not necessary are applied in many new developments in NSW, Qld and Tasmania.
    It appears to me that the points to take into consideration are overlooked depending of the influence of the developer.
    There are hundreds of developments in SW of Sydney that do not have recreation facilities and the well being of the taxpayers come second.
    Noise it is not taken into consideration when a big traffic artery is in the planning ( North Ryde and close suburbs come to my mind.
    Sewerage and topography also come to my mind in Qld where development was done in areas subjects to floods or even more dangerous where the sewerage pop up on the streets after heavy rain.
    I have experienced that so I base my opinion in facts.
    Objections by neighbors have stopped extension when the proposed improvement can affect their views as one example.

  5. silkworm

    “There are hundreds of developments in SW of Sydney that do not have recreation facilities and the well being of the taxpayers come second.”

    What about the wellbeing of the non-taxpayers?

  6. silkworm

    “How might the wellbeing of existing rate payers be effected by things such as parking and noise.”

    What about the wellbeing of all residents, rate-paying or not?

  7. The Forgotten People

    The Forgotten People in this society are the all-important underpaid service workers across urban and regional Australia. Elites in One Nation and the LNP have no interest in solutions to housing affordability problems. and want to depress their wages even further. Our prime minister represents Point Piper and postcode 2027 but not the nation.

  8. Kronomex

    Affordable Housing? AFFORDABLE HOUSING?? We can’t have the common little oik off the street buy houses! It would destroy, ruin, wreck our chances to buy even more investment properties which we rent out and negative gear. How dare the peasants have dreams above their stations!

  9. Shona

    Every run-down worker’s cottage and disused farm shed is now a target for first time investors. Even the old fire station in Mareeba, North Queensland is being auctioned for development as rental units. Thank the LNP for your latest negative gearing option in a town near you.

  10. Deanna Jones

    Kronomex, hell yes, and fancy interfering with the big fat landlord’s right to exploit one of the most basic of all human needs, that of shelter.

  11. Freethinker

    Forget about the big fat landlords, home owners living in homes over $600000 are going the first to complain if cheap houses are built near by because they will say that will affect the value of their houses.
    The battle of the classes, the disunity of the people it is what the ones at the top like and use for their own benefit.

  12. Jasper

    Thanks for this fair coverage of affordability and the idea of involvement of the corporate sector / partnerships with government seeking solutions.

  13. king1394

    Being from the Wingecarribee area, now listed at number 7 for un-affordability, I have observed that there is a pattern that is related to having a lot of property buyers awash with money, alongside very poor understanding of the place they are buying into. They sell a horrid two bedroom shack in Pymble say, and head down here with $1000000 in their pockets. They check the real estate agents and find a five-bedroom two bathroom etc etc. on a half acre block for $750000, they don’t stop to think. That same house came on the market a few years before at half that price. An agent of my acquaintance says they buy the first place they see, thinking they are getting a bargain.
    It’s reached the point where a poky old two-bed weatherboard on a miniscule block sells for $500,000. Prices here have doubled in the last few years. Annoyingly, once they move in, the next thing they do is start complaining about everything from the lack of exotic shopping experiences to the smell of cows and the noise made by native birds in the morning. And they let their lifestyle properties get covered with thistles and blackberries, and become harbours for foxes and rabbits.
    My daughter has just bought in Cowra. The same thing is happening there, even though they are a long way from Sydney. A substantial 4-bed house in Cowra seems extremely cheap at $220,000 but the price of such a house has jumped $40,000 in the last year because ‘Sydney investors’ are out there bargain hunting.
    At some point it will stop, and these ‘investors’ who have overpaid so much will find themselves out of pocket. It’s clear that the Government must act or the alternative will be chaos.

  14. Nathan

    I don’t think there is a single solution or answer to the housing affordability conundrum. The article puts forward some great ideas about partnerships between government and the corporate sector. Reducing red tape and fostering partnerships to deliver appropriate housing development in the right locations where there is access to transport and employment is a must for affordability as well as the sustainability of our communities. Other incentives such as fast-tracked assessment of development, reduced infrastructure charges and yeild bonuses for design excellence could be other ways of promoting affordability and quality housing development in priority areas.

  15. Leila Smith

    Well written & timely article Denis. We need to provide for all levels of society and housing/ shelter is basic to our needs inamhealthnas well as a social context. Yes there does need to be different but socially acceptable types of housing for all,our citizens and should not beyond anyone who is able to contribute either financially to society or not. What we do to enhance the lives of the most vulnerable in our society reflects on all of us.

  16. Egalitarian

    Australians have definitely lost it; as we now have a massive wealth differential. Homelessness, Poverty and crime is increasing.

    If this government doesn’t get rid of Negative Gearing on established housing we should all head to Canberra and protest outside parliament until they do something.They are rotten to the core this mob.

  17. nurses1968

    Negative Gearing is not all bad but it could do with some tightening of the system.
    Negative Gearing has allowed me to purchase my first investment property and it and another I intend to purchase in future along with my super will ensure that I am totally self funded in my retirement when the time comes

  18. Egalitarian

    nurses1968 Well I am really happy for you though its out control and whole housing issue is making life a pure misery for many.House prices have gone up by 20% in Sydney since the last Election despite Turnbull fear projections.

    Negative Gearing should apply to new houses only.Plus reestablish Capital gains to 1996 rate. It’s all pure greed selfishness driving it all.

  19. nurses1968

    Egalitarian
    I pointed out here on AIMN a couple of months ago where I saw the problem.Peoples expectations.
    I went with my boss who is a 5th generation property investor to 2 auctions.The first an ex Housing Dept home, renovated and a nice little property, There were 12 people there almost all of whom I was informed were investors . The later one,in a fashionable suburb, a 2 storey, pool 4br, 2 b etc had about 100 mostly young families and was around the $700,000
    I purchased the former which will be rented at a reasonable rate to likely a family as reasonable priced rentals {as per my employers experience} will attract over 100 rental applications and are in short supply in the Illawarra
    Expectations of some seem a bit too high for a first home.

  20. Egalitarian

    That is a big judgement on these people.Like most people you make societal judgment about them as apposed to a Big Picture view by connecting the dots as to what is causing this rise in prices.It’s like The Great Australian Gold Rush. It’s a Ponzi scheme 101.

  21. nurses1968

    Egalitarian
    I made the judgement {well my employer did as they have been in the since the late 1940s and she has run the show for the last 20 years so has experience on her side} For your information they don’t negative gear as they do not finance property purchases from outside sources and they do develop and are into diversity The latest being Early Learning Centres

  22. Egalitarian

    So your comment is someone else’s thoughts not yours? So why make it.It’s just a lazy flippant comment. And we are having a conversation not your boss.It’s like me saying “all nurses are loose” well according to my doctor anyway.

  23. nurses1968

    Egalitarian
    Don’t twist it.
    It was an observation 12 at one auction {mostly investors as they were known by my employer and she mentioned it }
    “The later one,in a fashionable suburb, a 2 storey, pool 4br, 2 b etc had about 100 mostly young families and was around the $700,000”
    my observation as it is difficult to mistake mum dad and a couple of kids x 50

    p.s no longer a nurse it didn’t pay well enough and hours were shockers and the system crumbling

  24. Egalitarian

    There is no twist you said it. “Expectations of some seem a bit too high for a first home”. You stated a judgement of someone else’s thoughts as if they were your own.Just swallow it.

  25. nurses1968

    What would your interpretation be of the 2 scenarios then?

  26. Gavin

    Egalitarian “If this government doesn’t get rid of Negative Gearing on established housing we should all head to Canberra and protest outside parliament until they do something.”

    I was thinking along these lines. Shelter is a basic need.

    Yet politicians are making policies that impact housing affordability based on a single agenda of increasing the value of their property portfolios 10%+ each year.

    What I think might work is to stage widespread community protest in the name of affordable shelter on a nominated day each year until policy reversals happen. It has taken almost 20 years of self-centerd decision making to get to this point. Changing policies to level the playing field of home buying is unlikely to happen in one year. Canberra need not be the focus, in fact, just like International Women’s Day, stage it everywhere.

    If a few speculators find the idea of young families starting out in life being able to buy an affordable home not to their liking they can see a counselor or similar.

    MSM’s delay and scare tactics can be quashed by revealing any conflict of interest in this matter. That is, publish a list of how many investment properties are held by which media celebrities (including editors, producers, etc).

    I’m not against investors, we need them as there is a need for rental properties in general.
    What I’m for is treating potential home-buyers starting out in life (or starting out again in the case of some people – divorce, loss of business, etc) in a more fair manner.
    At the moment all advantage sits with investors and that’s not on.

    Something to aim at: Declaring the Right to Affordable Shelter Day 2017

  27. nurses1968

    Egalitarian
    It seems the “observations” are borne out by Industry leaders

    A former Westpac chairman and chief executive of building products group Boral says the lofty expectations of a new generation of house buyers have helped push real estate values to high levels, as they demand what was previously regarded as luxuries such as ensuite bathrooms and home theatres.
    http://www.smh.com.au/business/do-australian-house-buyers-expect-too-much-too-soon-20160609-gpfnus.html

    Industry boss says first home buyer expectations are too high
    Aussie Home Loans CEO James Symond said consumer expectations may also be preventing a lot of FHBs from entering the market.

    “Yes, prices are high and it can be difficult for FHBs. However, their expectations are partly what also keeps some of these buyers from thinking they can secure the right property,” he said.

    “Today the bar has been raised and with it, many FHB expectations. They want to live where they want to live.”

    Tim Brown, Yellow Brick Road’s CEO of lending, echoed Mr Symonds’ view on the expectations of the contemporary FHB.

    “Most of this generation’s expectations are probably higher than previous generations because they want everything now,” he said.

    “Today, as FHBs, they’re expecting to live well above their means and they all want to live in the city.”
    http://www.realestatebusiness.com.au/breaking-news/10491-industry-boss-says-first-home-buyer-expectations-are-too-high

  28. Harquebus

    It requires a lot of energy and creates a lot of pollution making steel, concrete and bricks. Market solutions to housing affordability can not compensate for diminishing energy returns.
    If we abandoned growth, we could save ourselves a fortune and help the environment.
    Cheers.

  29. silkworm

    Nurses, you belong in the Liberal Party.

  30. Egalitarian

    Nurses.I don’t care what these so called experts think and neither should you. Do some real research and stop quoting the usual suspects. Your shooting the victims regardless where they want to live.The world has change since u were changing bedpans

  31. nurses1968

    Egalitarian
    you make a lot of assumptions
    Nursing is an honourable profession and yes I did change bedpans
    Is that below you?

    silkwormMarch 7, 2017 at 11:52 am

    “Nurses, you belong in the Liberal Party.”
    And why would that be?

  32. Freethinker

    I hope that this blog/forum do not turn up like other sites where participating members start talking about other members instead of concentrating in the topics.
    It would be a shame because the standards in this site are very high not only on the quality of articles and their authors but also the constructive comments by the members.
    Please, keep it that way.
    PS: my comment it is not address to any person in particular, it is only as a result of the later trend.
    Have a nice day.

  33. Roswell

    Well said, Freethinker.

    I’d like to think that most people who comment on this site are mature enough and respectful enough to refrain from personal attacks.

    It’s hard to refrain at times, I know, and I have been guilty in the past. However, we should all heed your wise words.

  34. Egalitarian

    nurses1968. I also think Nursing is an extremely honourable profession.I think you should read my words carefully. You need to look at the Big Picture regarding housing.Until you look at that you are only repeating mantra’s.

  35. Egalitarian

    Gavin Something to aim at: Declaring the Right to Affordable Shelter Day 2017 Great Idea Gavin

  36. Egalitarian

    Freethinker, Roswell, Nothing wrong with a robust discussion every now and then.

  37. nurses1968

    Egalitarian
    I made a simple observation and a comment about Negative Gearing, agree or disagree it’s up to you but I have no intention getting bogged down reading about Housing affordability.
    It is not high on my priority list, mine was simply a comment to a line in the article and an observation

  38. Egalitarian

    No comment; as I waive my head.

  39. Rubio@Coast

    Labor needs to take up this issue with a vengeance. It will bring the heartland back as in 1993 when Paul Keating won the impossible election.

  40. Paul

    Thanks for the article Denis!

    This is a very serious issue. The government needs some independent think tanks working on a sustainable solution to this matter.

    If this situation is left to run its course, it will end in disaster. There will reach a tipping point when people realise the real value of the infrastructure they are purchasing, and at that time, if there is a big gap between original price paid and reality – things will become very difficult. This housing market in Australia is not sustainable and the bubble talk is very real.

    I like the idea of the South Australian affordable housing program and would welcome an increase in first home owners grant and inclusion of allowing this to be used on exisiting dwellings not just new ones.

  41. Deanna Jones

    Nurses:
    “Negative Gearing has allowed me to purchase my first investment property and it and another I intend to purchase in future along with my super will ensure that I am totally self funded in my retirement when the time comes”

    How lovely. And on how many others backs will you have crawled by then? I think the ‘time’ you are expecting to ‘come’ is ironically becoming far and far less a reality the more you and other selfish people like you continue to buy into the bullshit and behave accordingly.

  42. The Forgotten People

    Thanks Paul: Always speak up for the Forgotten People. Australia is becoming a very unequal society with some many families facing casual employment instead of real work.

  43. nurses1968

    Deanna Jones
    “And on how many others backs will you have crawled by then?”

    You do talk shit 😀

  44. Matters Not

    Deanna Jones wrote:

    And on how many others backs will you have crawled (over?) by then … you and other selfish people … and behave accordingly

    nurses1968 is perhaps advised (religiously):

    If thou wilt be perfect, go and sell that thou hast, and give to the poor, and thou shalt have treasure in heaven

    nurses1968, become a personal economic martyr in the here and now just like Deanna Jones (apparently) advocates. That’s the way forward. Heaven awaits.

  45. nurses1968

    Matters Not
    I understand and would accept your advice but not guaranteed admission as I’m an atheist and what’s to say I wouldn’t get a cloud to share with Deanna in the hereafter?
    I’ll avoid that and take my chances with the bloke down stairs. It would be much more acceptable that the shared abode I mentioned

  46. Sam

    People should watch movie The Big Short, Re subprime mortgages

  47. Roswell

    If nurses1968 has an investment property then good on her.

    It’s not as though she has a block of flats deliberately left vacant to write off. It’s not as though she’s a politician who, with 15 investment properties, opposes changes to negative gearing.

    She’s simply trying to invest in her future. Not everybody can, and I accept there might be resentment from those who can’t.

    If a future government removed negative gearing I wouldn’t mind betting that Nurses will still keep the property.

    Go for it, Nurses, get as many as you can. You’ve worked hard for it.

  48. nurses1968

    Roswell
    When I got out of Nursing and started my new job it was pointed out to me that my Super would NEVER be enough for me to fund my own retirement, It is only the generations now who will have the opportunity to have Super deducted from day one of employment to retirement age that may build up that .
    To a lot of commenters on AIMN going by their ages stated at times, Super didn’t start till well into their working lives and from memory started at 3%.
    Now that I am in a financial position to invest in an investment property it seemed the smartest way to go and I can assure you the property and the next will be rented at a fair below market rate of rental
    I stated in my first comment before the flaming started
    “Negative Gearing is not all bad but it could do with some tightening of the system”
    I have also purchased the property where there is a huge demand for affordable rental properties
    They complain about the “glass ceiling” but when a female tries to better herself and play in the big pond the attacks start
    Thank you at least for understanding my position.

  49. Matters Not

    Sam, yes The Big Short is a very interesting movie. Says much about the US – which is vastly different to arrangements here. There, if the bank takes over your house (because you aren’t paying off the mortgage) – and then sells it at a loss, the bank wears that loss. The former owner simply walks away. Certainly, no house BUT no debt.

    Here, they can take over your house – sell it at a loss BUT in Australia the former owner of the house still wears the debt. Here the banks don’t let you simply walk away. They’ll chase you to the grave. And beyond.

  50. Freethinker

    Roswell, why a person that worked all his life cannot have empty properties as an investment for hi/her retirement and not willing to rent them because possible damage caused by tenants.
    Why he cannot sacrifice his spare time to earn more money to maintain that empty houses?
    You cannot discriminate between investors.
    My comment it is not against nurses1968.

  51. Jerry

    Nurses: I think some comments are just asking you to think outside the square; as it is not just about yourself.As the current conditions are very unfair as they are inflating house prices.

  52. nurses1968

    Jerry
    I was commenting on one particular part of the article, negative gearing and pointing out it isn’t totally bad
    my initial comment was
    ““Negative Gearing is not all bad but it could do with some tightening of the system”
    Negative gearing has
    a- assisted me in securing my retirement
    b- provided affordable rental in a market and region where it is sorely needed

  53. Jan

    Yes; N I do wish you well on your retirement but you did have a go at all the families and the little kiddies. Cheerio

  54. nurses1968

    Jan
    “but you did have a go at all the families and the little kiddies”

    Where?

  55. Roswell

    No offence meant towards you, Freethinker.

  56. Jan

    Nurses Look up you’ll see. You must take ownership of your comments.

  57. jimhaz

    [“Negative Gearing has allowed me to purchase my first investment property and it and another I intend to purchase in future along with my super will ensure that I am totally self funded in my retirement when the time comes”]

    But without NG would prices have inflated so much in the first place?

    I suspect not, thus your loan would be lower and less losses through high interest payments would have made NG irrelevant – though it seems Howards capital gains reduction is a more significant cause for inflation than NG.

  58. Sam

    Jimhaz Plus they get the 50% off CG just after 12 months,it should go back to where it was in 1996 or at the very least they should have to wait 3 years to get any discount. That means they have bought a home not just an investment.

  59. Freethinker

    No Roswell, I have not taken any offence, I just asked the question for which I do not expect from any an easy answer from anyone .
    It is a complex issue which one way or other will affect some and benefit others.

  60. nurses1968

    Jan
    if you mean ““The later one,in a fashionable suburb, a 2 storey, pool 4br, 2 b etc had about 100 mostly young families and was around the $700,000”
    my observation as it is difficult to mistake mum dad and a couple of kids x 50”

    surely you jest ?

  61. nurses1968

    jimhaz

    “But without NG would prices have inflated so much in the first place?
    I suspect not, ”

    Who knows, you are only assuming
    I got the property at a very good price so I can only guess. You can go on assuming
    I assume not but we’ll never know

  62. Freethinker

    Which hope we can have with politicians in power like this?
    Docklands to get 1,500 new apartments, but still no plans for school
    http://www.abc.net.au/news/2017-03-08/docklands-development-to-feature-five-high-rises-six-parks/8335716

    Carol replied to one of my comments here, quote: Freethinker, as a former Shire Councillor, we had to consider many aspects when approving housing, one being was the infrastructure sufficient to cope with the sharp increase in population density, the roads, the drainage, recreational facilities, schools. End of Quote

    This reinforce my previous expressed view about some of the solutions to increase accommodation in Australia.

  63. Jan

    I think you owe those families an opology

  64. nurses1968

    Jan
    For what?

  65. Freethinker

    Jan, with all the respects you are wrong, nurses is not doing anything unethical or illegal and I am bet that any of the tenants that are in the properties that nurse own, if they have the same opportunity also they will invest in Real Estate.

    If you feel so strong about the ethical issues, have you investigated the companies and organizations that you are supporting by purchasing their products or using their services?
    Are you 100% that the profits of these companies and organizations is obtained in an ethical way.?
    What about the politicians or party that you have voted?
    Look into that, from the financial institution that you are dealing to the retail shop where you are purchasing goods before ask an individual that acting within the law to ask for apologies.

  66. Roswell

    Jan, that is just plain ridiculous.

  67. Pat

    I see one multinational real estate site is able to target every town & village in Australia to assist the canny investor. The best buys are of course in towns and villages with high unemployment. Perhaps a progressive government will one day target youth unemployment & training programs with zeal

  68. Abdul

    Let us work towards strategies that assist people to buy a house or a unit. I think that educating high students about budgeting and saving for a deposit could be the answer.

  69. Maree

    Denis, thanks for your article. A complex issue for Australian society in our changing times.

  70. nurses1968

    I think one of the greatest killers is the interest rates over the period of the mortgage
    I assisted one of my employers tenants look into purchasing their first home.
    A modest 3 bedroom home for $350,000,
    Now I’m not experienced at this and my employers are off at IWD activities so will wait for their expertise but fugures provided for the $350,000 loan were

    Monthly repayments
    $ 1,987.26
    Total cost of loan
    $ 715,414.14
    Total interest payable
    $ 365,414.14

    given we have a cash rate of 1.5%
    A Government finance Institution or the like for First Home buyers would seem a goer if ever a Party had the ticker to do it

  71. Michael Taylor

    Nurses, I don’t know if this is exact or not, but apparently every dollar extra you pay off your principle, you save yourself three dollars in interest (over a 25 year term).

    Another trick is to pay your mortgage fortnightly instead of monthly. That cuts a heap off your interest bill as well.

  72. Egalitarian

    Nurses 1968 Interest rates have never been lower.It’s the price of the homes that are over valued.Its simple and they will come a tumbling down.

  73. Rubio@Coast

    Social market capitalism can offer real solutions for implementation after the next state, federal or local elections.

    I am surprised that these concepts are not widely discussed in Australia which pioneered Medicare and the Pharmaceutical Benefits Scheme over the British national health model.

    Compulsory superannuation is also a social market process and even Third Party Insurance for drivers. These social market concepts are all very mainstream and suitable for a society which does not like too much government regulation.

    This is capitalism with a human face and a helping hand.

    The Deep South changes offered by One Nation are appalling in comparison if not neo-nazi in style.

    Australians are so desperate for change but Labor is afraid to act upon what could give them a hundred seats at the next federal election.

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