House prices

The really irresponsible bit was allowing rates to go down to 0.1% or 0.25% in the first place. It's an historical aberration as well. It has fostered extreme risk taking and massive bubbles.

Further, Australia (and its businesses) have traditionally attracted capital from overseas - usually with a bit of a premium in the bearing interest rate. Capital that permits jobs and the chain of payments (90 days, most frustratingly, was my experience). Currently, we are behind the overseas rates, which is another imbalance.

Recession has been avoided for a generation, and as a result, the experience of dealing with one might be alien to some. Those who went through the Great Depression we know, buried cash in their backyards for decades afterward!

VJ, might have to bury it under my neighbours unit doorstep ;)

Haha Craig, there's a place near my house, just let me know what size hole I should dig?

Unemployment at 3 something, demand still red hot in the regions and bank lending rates have already been stress tested at 5% interest rates.

Cool your jets on that recession call boys.

We've still got >20% price growth in the last 12 months to lose - before we even get into correction territory.

There's a long, long way to go before anyone, investor, first home buyer etc etc gets into negative equity or we see fire sales.

Anyone who has been in the market for >3 years is laughing.

Govts of all persuasions in Aust will open up the immigration spigot to full if we get any generalised demand destruction in the broad economy.

The Ponzi will not be televised, the Ponzi will be live.

Oh, and Flollo, sorry I didn't respond to your posts before, that upbringing sounds amazing and I'd love to hear more.

Seriously though, there's some great points above. This isn't the same economic scenarios of the 80's or 2007. My gut says any rate rises will be used sparingly. At least I hope so.
And it will be the next government's fault.

Also record demand for Aus commodities and Ag products, with record export prices and gross values and the $AUD continuing to sit in the export sweet spot.

Apparently the rate at which the Banks stress test mortgages is 3 per cent since last October. Is that right ? Seems incredibly low. I read somehwere that the fix for high prices is higher prices - demand destruction in other words; I'm not sure I agree. Providing more affordable/social/community housing rather than using land for more privatised aged care homes might be a start but thats fraught with trouble too. Such a hard problem to solve, not just in Australia.

Correction - the stress test rates are here: https://www.ratecity.com.au/home-loans/mortgage-news/new-home-loan-stres...

freeride76 wrote:

Also record demand for Aus commodities and Ag products, with record export prices and gross values and the $AUD continuing to sit in the export sweet spot.

100%. I'm a believer we are in the roaring twenties again - certainly fits the pattern so far.

Demand drivers are huge.

My mate who works FIFO exploration for nickel/copper/gold just had his day rate doubled.

For anyone interested I recommend reading BHP's FY22 mid year outlook.

https://www.bhp.com/news/prospects/2022/02/bhps-economic-and-commodity-o...

Stok wrote:

There's too much money and demand for these places to really drop.

I think you're missing the point. There's no demand in a recession, let alone a depression!!!

freeride76 wrote:

There's a long, long way to go before anyone, investor, first home buyer etc etc gets into negative equity or we see fire sales.

Anyone who has been in the market for >3 years is laughing.

Hang on, what about all those people who bought in the last 2 years? They've bought at the top. And anyone outside of this time frame have very much used the equity in their home to buy another investment property. This is the great Australian trap that will cause a significant collapse. We're not talking about one family having one house here....we're talking multiple, and as I said, when the money dries up due to mortgage stress and inflation/cost of living, the first thing that will be fire sold will be the investment property. And I'm not even going to mention the trillions lost on the stock market and superannuation. People will be shitting themselves Steve. As others have said there are many generations not ever seen close to what is coming.

freeride76 wrote:

Also record demand for Aus commodities and Ag products, with record export prices and gross values and the $AUD continuing to sit in the export sweet spot.

USD will tank, bringing the AUD close to parity, thus making exports less attractive. And aint no coal gonna save us from this GFC this time round Steve!!!

freeride76 wrote:

Demand drivers are huge.

My mate who works FIFO exploration for nickel/copper/gold just had his day rate doubled.

This is called wages growth and yet another reason why RBA has to lift interest rates swiftly and significantly.

With donweather on this. I don’t want a full blown correction, a lot of innocents will be seriously harmed. On the other hand the problem isn’t fixed unless there is a full blown correction.

There is no ‘soft landing’ on this. No. Soft. Landing.

The option is continuing the Ponzi scheme, or getting off the Ponzi scheme.

Yes, Freeride, some very small sections of the community will get double pay rates as commodities rise (what was that, 10% drop in iron ore today?)

The absolute bulk of the community are not getting pay rises. Values in Byron Bay are not typical of what is happening in the rest of the economy.

Apologies if those sounds parochial, but if Sydney and Melbourne drop, we’re all on a slippery slope. The whole country goes down if Sydney and Melbourne drop.

We do make up nearly 40% of the Oz population. I know you all love to hate us, but what happens here happens everywhere.

Great discussion going on here at the moment - different sides being debated really well! It's what forums are for. Top stuff Don, Batfink, FR, Flollo, monkeyboy, Indo, Craig and WoL (and others!)

FR did win the 'what will housing do in Covid' contest... betting with the house (pun) on the Ponzi seems pretty logical. That was an uber-bullish BHP 1/2 yr report, btw

If I go back to monkeyboy's canadian link, here is an example from Victoria BC (a much bigger island it is on than I thought! Mt Washington got 4m of snow overnight when we were there... there's surf, apparently, too) of what happens to market sentiment when the rates rise:

"This note came on the weekend from a blog dog in Victoria – where the average property in March traded for $1.23 million, a 27% year/year hike. But that was last month. April’s cruel.

We listed our house in one of Victoria’s most coveted neighborhoods on April 14th, just before the Easter long-weekend. Lots of optimism to go around. The weeks just prior to listing saw no end to jammed appointments for visits, bidding wars, multiple overpriced or bully offers, and a one-week turnaround from listing-to-sale. In the areas we look at for comparables (up to $2.5M) there were multiple “Sold” per day. Suddenly, and just after the CB rate hike of 0.5% on April 13th, there are crickets. It’s all people talk about now. Only one “Sold” sign in the area since April 16th. We had hoped to catch a buyer with pre-approval from earlier this year when rates were much lower. People seeking mortgage approvals now are dealing with a new reality. And suddenly there’s so many more listings to consider.

For us – one very low offer, only seven visits in nine days, and a deluge of other new listings in the neighborhood. Optimism has been replaced with reality and dread. It’s official. The same shifting factors that affected the GTA market in March are finally here in Victoria. And it’s only just beginning…

In Ontario, ditto. Property values are falling commensurate with a doubling in mortgage rates. “Some people will stop paying their mortgages on time and have no ability to refinance or easily sell at a profit,” says mortgage broker/tweeter Ron Butler. “So Lenders will take action. 97% of the time in Ontario that means commencing Power of Sale legal actions. Big banks and institutional lenders initiate legal action after 90 days of arrears. With private lenders it may be as little as 10 days.” "

That's from greater fool. Couldn't possibly happen here?
Market is pricing in 10 Fed hikes this year (!) I'll sit with 'dogs and cats living together' for now.

batfink wrote:

Apologies if those sounds parochial, but if Sydney and Melbourne drop, we’re all on a slippery slope. The whole country goes down if Sydney and Melbourne drop.

We do make up nearly 40% of the Oz population. I know you all love to hate us, but what happens here happens everywhere.

That was us last time Batfink, over in the West. Sydney had topped (02 with Carr's land tax as coup de grace??) , Tassie had gone mental while I worked there 03, and then commodities took off while interest rates were rising.... from 02 (commods) to 04-07 (WA RE)... It trembled with the GFC. My take on the cycle anyway. $7 coffees, $12 morning tea in Karratha...

*** Bonus theory *** "When Mullets become widespread, Recession Follows"
Discuss.

Hmm sorry for the bad news every one but inflation will (largely) determine rate rises and its not pretty.

In the US its (inflation) really taken off (the FED is now seen as behind the curve = bad) and most are in the brace position, this will be similar to Australia, I hope this to be wrong but...

Just a reminder the current low interest rates position has never ever happen before may be those famous words, "this time will be different"
Hope everyone gets through.

In the same way as you only need one market segment to jump in order to preclude a boom, the reverse is also true.

Huge coastal migration caused the usually CBD-centric market to invert ie they suddenly became much dearer relative to other markets. What followed? ALL of the other markets caught up eg CBD apartments(!), mining towns, suburban enclaves, regional towns that haven’t moved in decades… the list goes on.

Once demand in one market segment falls off a cliff, every other market will eventually fall into line. This can be top-down ie high end props start selling at liquidation prices… the market below that finds relativity and so on. Alternatively, bottom-up. Lower socio-economic areas see a lot of people trying to cash out at once lest face neg equity or lose the only cream they’ve ever accrued (or mortgage stress puts them all in a bad place).

If you think about it - the main reason I would rush to buy a property today is because There’s a decent chance it will be dearer tomorrow. Once that sentiment leaves the market, it can be a steep slope.

It's already happened here - 6 months ago a house would be sold before hitting the market, or a week or two after. People got greedy in the new year and houses have been taken off the market after no offers, some relisted and still no offers. Noosa. Prices are stupid though, really stupid.

Yeah we need some distressed selling before we get price shifts. But same here on GC. A few have tried it on at silly prices and ended up withdrawing from market.

velocityjohnno wrote:

….
*** Bonus theory *** "When Mullets become widespread, Recession Follows"
Discuss.

Ooh yes, I think you have it VJ. Any view on the dirty bum fluff ‘tash thing? There must be some kind of karmic tax on that abomination.

On topic, things have definitely slowed here, but they still sell. Prices just not rising as quickly. The used vehicle market is another thing entirely, cars with 30k on the clock selling for $10k above the new car price because of wait times on supply of new stock. Flipping cars is now a thing.

*** Bonus theory *** "When Mullets become widespread, Recession Follows"
Discuss.

ahahahahah.

damn hard to argue with that one VJ!

"I don't think anything would really make much difference,” says indo

There is a swag of options that have been extensively discussed on this thread. No singular solution but collectively and targeted could help address the housing issue. Tax reform. Disincentives. Immigration levels, land banking and other macro economic measures that dissuade property investment to help suppress crazy price growth and allow people entry to secure shelter.
Supply may be an issue but there is also a land banking problem used by developers to manipulate further the supply demand issue for greater profit. You are aware of all these options as they have been discussed endlessly.

Or we can just continue to throw our hands up in the air and debate when a crash will happen. And if it happens watch the inequality chasm deepen. Blame the losers for their irresponsibility and worship the realestate industry as they drag dog shit all through your kids rentals on their upteenth inspection as they scramble to clean fingerprints off the light switches so as not to upset that bitch with her clipboard and cop another lecture on how to clean an exhaust fan while instructing you they will be back on Wednesday for another sale inspection which is the day of the kids soccer practice which means another house clean before the auction the following Saturday and there’s that new listing for rent the suburb over you need to get to along with half the neighbourhood who will be scrambling to compliment that spiv fuck with his clipboard all handling them glossy portfolios in hard copy complete with socials links. And goddamn that fibro knockdown in buttfuck nowhere just listed for $200k more than the nicer larger semi next door that sold last week. Need a smashed avo.

Actually folks, as I've been keeping low, I've missed the mullet thing until recently. I noticed a couple but now they are everywhere... Needless to say I was shocked! There was much discussion of tight black jeans, flannel, adidas rome's and winnie blue under jumper shoulders at ours...

https://www.news.com.au/lifestyle/parenting/school-life/trinity-college-...

https://www.9news.com.au/national/mullets-banned-at-waverley-high-school...

bless you WA, never change:

https://7news.com.au/politics/mark-mcgowan/mark-mcgowan-defends-mullets-...

and

https://www.dmarge.com/skullet

Evolution!

Really enjoying this... what better way to rebel at hipsters heading for middle age who are now your teachers! It's us & boomers all over again...

Kaiser great post above: it's when that shift in sentiment happens, and not until then. Saw that in WA in 2007, fear at GFC, suddenly newly developed looked silly going at double the sq m price of existing that it had been, lawsuits to get out of signed contracts etc

Interesting Canadian govt seems to be doing anti-property legislation??

Bonza, last paragraph was poetry. Yes, decline in price will hurt some, but continuation of what has been happening is currently hurting a lot of people.

I think we have the latest inflation report 11:30 am today, too... Market already set for a challenge after last night's NY session (note credit market)

https://www.zerohedge.com/markets/bonds-surged-bitcoin-purged-tesla-tank...

fear not: they are already predicting the easing after what seems to be approaching

(not much ammo to cut from if you only get to 2.5% tho)

velocityjohnno wrote:

That's from greater fool. Couldn't possibly happen here?
Market is pricing in 10 Fed hikes this year (!) I'll sit with 'dogs and cats living together' for now.

10 hikes in a year. That is very aggressive, do they anticipate 10 x 0.25% or something else?

Hey flollo, yes I think it's 10 x 0.25%. Market predicts (currently) a couple of cuts after this

All can change over time but that's how it's seen at present

Edit: I've also read views that it will come in 0.5% moves at the next couple/few. 4 May is the date they meet. There's mention of QT beginning too (Quantitative Tightening).

blackers wrote:

Any view on the dirty bum fluff ‘tash thing? There must be some kind of karmic tax on that abomination.

Yes blackers, there is. Been recently reading stories of doomed steam ships lost in storms early in the last century, and yes, the captains were rocking those oversized moustaches. Perhaps today's guys want to be ship captains? It was also the fate of Lord Kitchener - he of the famous 'I want you' WW1 poster fame, cruiser was torpedoed off the north coast of Scotland in a storm, he went to the bridge to be with the captain.

and a bonus on mullets in history:

"The look is hardly new — back in the 6th century, people were complaining about it. Here’s Byzantine scholar Procopius observing Roman charioteers: ‘The hair of their heads they cut off in front back to the temples, leaving the part behind to hang down to a very great length in a senseless fashion.’"

https://www.spectator.co.uk/article/the-hellish-return-of-the-mullet

So it's highly likely when we do the first manned missions to Alpha Centauri, sometime in the early 22nd century, one or more of the astronauts will be rocking a dirty mullet (Recession will follow throughout the home Solar System)

Haha way off topic of house prices, but I have commented to friends about the youth of today (16-25 yr olds approx) and the style they seem to all go for is 'I'm going to make myself look as bad as I can and I'll look cool'. So the shit fluff facial hair, mullets, op shop clothes that have no real style other than a mish mash of shitty, ill fitting items.

It's been happening for generations, but I've now finally become one of those that looks at the young and think, what the fuck are you wearing?! I guess I was always and still am a pretty basic jeans and tee kinda guy, all that fit 'normally', with a basic hair cut that doesn't draw attention.

Who knows, an epic house crash and the bum fluffers might become the next property moguls... doubt it though.

I've noticed a combo of the Caesar cut at the front and the mullet at the side and rear....signs of a double-dip recession?

It’s in:
2.1% last quarter,
5.1% over the year
Significantly higher than consensus

2 years ago the MSM was saying how good inflation is for us...never trust an economist :)

bonza wrote:

"I don't think anything would really make much difference,” says indo

There is a swag of options that have been extensively discussed on this thread. No singular solution but collectively and targeted could help address the housing issue. Tax reform. Disincentives. Immigration levels, land banking and other macro economic measures that dissuade property investment to help suppress crazy price growth and allow people entry to secure shelter.
Supply may be an issue but there is also a land banking problem used by developers to manipulate further the supply demand issue for greater profit. You are aware of all these options as they have been discussed endlessly.

Or we can just continue to throw our hands up in the air and debate when a crash will happen. And if it happens watch the inequality chasm deepen. Blame the losers for their irresponsibility and worship the realestate industry as they drag dog shit all through your kids rentals on their upteenth inspection as they scramble to clean fingerprints off the light switches so as not to upset that bitch with her clipboard and cop another lecture on how to clean an exhaust fan while instructing you they will be back on Wednesday for another sale inspection which is the day of the kids soccer practice which means another house clean before the auction the following Saturday and there’s that new listing for rent the suburb over you need to get to along with half the neighbourhood who will be scrambling to compliment that spiv fuck with his clipboard all handling them glossy portfolios in hard copy complete with socials links. And goddamn that fibro knockdown in buttfuck nowhere just listed for $200k more than the nicer larger semi next door that sold last week. Need a smashed avo.

Haha, that 2nd paragraph is funny. No, we don't need to do that. I'll throw something out here and see what people think.

Let's look at the basic theory first. Homeowners (there are subgroups; first homeowners, upsizers, downsizers, etc...) and investors (also subgroups; small mum and dad investors, bigger, want to have 100 houses investors, holiday home investors, etc...) form a demand for residential housing. Now, let's assume that the supply is static at 100. That 100 will be split between investors and homeowners (I think this split is around 70-30 but would need to double-check some sources). So obviously, in a limited supply space, there is competition between homeowners and investors. If investors have stronger buying power their share of a 100 would increase from let's say 30 to 40. Vice versa works as well, if homeowners have stronger buying power their share might increase from 70 to 80. In a perfect, theoretical world equilibrium will be achieved, and there will be balance in the market.

I think everyone understands the above. Now. let's make it a bit more complex and more relatable to real-life (the above is a pure theory that doesn't exist in real life). Neither supply nor demand is static so it's very important to measure 2 deltas - delta (change) in supply and delta (change) in demand. So, if a demand delta is higher than a supply delta (from a market equilibrium) prices will increase. Conversely, if a supply delta is higher than the demand delta prices will drop.

Now, a real strategist would list dozens of drivers on each side of the equation, here are a few examples:

Demand drivers - low-interest rates, easy access to credit, availability of real estate housing to global capital, household disposable income + many others. Please note that the drivers can also have a negative impact on demand if they are not favorable (high-interest rates, low disposable income, etc...)

Supply drivers - easy building approvals, low regulatory costs to develop, building public housing (yes, this is an important part of the supply), rezoning land from agricultural into residential + many more. And same as demand, these drivers can also have a negative impact on supply when not favorable (complex, expensive building approvals, lack of public housing, etc..)

The next step after this analysis is completed with real numbers is to create a strategy for future periods (forget about the past) and make a decision on which levers need to be pulled to deliver on that strategy. In an ideal world, we would like to see a clear and concise strategy from our governments, highlighting which levers will be pulled and when (especially in the elections year). I would like to see a 5-year strategy plan, but 10 would be even better.

Unfortunately, we don't live in an ideal world so we have a situation where levers themselves compete against each other. So, let's narrow it down to something we are all aware of and discuss frequently; first home owners grant and negative gearing. These 2 leavers are most discussed.

Investors will always defend negative gearing under their mantra that they provide rental stock on the supply side of the market. And that is correct, they do provide rental stock. But what is also correct (and the part of the discussion they are ignoring) is that a portion of those same renters would love to own their own home if circumstances would allow so they wouldn't be renters in the first place. It is highly likely they are priced out of the market by the same investors they are leasing a property from.

The government is (doing a mistake of trying to appeal to pretty much all the interests), unfortunately, fuelling both sides of the equation, creating high inflation of entry-level property as first homeowners (who are subsidised) fight with investors (who are also subsidised) particularly heavily in this area. Jump into the next bucket (let's say 20-30% above median value) and competition is much less. 2 levels up and it's significantly less (at 50%+ above median). This one is much more open to market forces.

So, after a long post here's a solution. If our goal is to increase homeownership we need to ditch negative gearing and channel funds into homeownership. Also, ditch the first homeowners grant and channel combined funds into a new program that specifically promotes property development for first homeowners. And what I mean by that is a property development where only those who don't own the property can buy one. Governance of this can be an extension arm of the public housing framework or something similar. Price of the property is pegged at market rate at the time of development commencement + max inflation until the time of settlement. This doesn't mean that government is out there building things themselves. They put the program together to which developers and finance institutions subscribe. Applicants apply, their case gets assessed, and if successful they secure a spot on the list. For example, Defence Housing has similar fundamentals as this proposed scheme https://dha.gov.au/. It's not quite the same but it is a precedent for what can be done.

There are schemes like this in other countries so it's nothing crazy. It won't solve the whole picture but it will take some heat off the entry-level market. Investors can still keep investing but with tax regulation aligned with any other business; if you make a loss you can carry it into the future and offset it against future profits. But you cannot offset it against your current salary. I would never target to invest in a business that loses me money. If I was to invest in property myself I would look for a positive cash flow and wouldn't care about negative gearing. It creates bad habits. Any short-term shocks to the rental market need to be offset by increasing the supply through public housing.

To summarise, our problem is the lack of an overarching strategy that clearly shows which levers are getting pulled when (some levers you don't have control of which makes planning extra important). In some cases, the government is putting one lever against the other which economically doesn't make sense (it might make sense politically). A combination of many is required but the goal needs to be clearly defined. If we want a nation of homeowners then the lever I mentioned above will contribute to that goal. If we want a nation of cheap and available rent then it would be a totally different game.

Finally, a long post but I'll close with a question - what kind of country do we want to live in?

bonza wrote:

"I don't think anything would really make much difference,” says indo

There is a swag of options that have been extensively discussed on this thread. No singular solution but collectively and targeted could help address the housing issue. Tax reform. Disincentives. Immigration levels, land banking and other macro economic measures that dissuade property investment to help suppress crazy price growth and allow people entry to secure shelter.
Supply may be an issue but there is also a land banking problem used by developers to manipulate further the supply demand issue for greater profit. You are aware of all these options as they have been discussed endlessly.

Or we can just continue to throw our hands up in the air and debate when a crash will happen. And if it happens watch the inequality chasm deepen. Blame the losers for their irresponsibility and worship the realestate industry as they drag dog shit all through your kids rentals on their upteenth inspection as they scramble to clean fingerprints off the light switches so as not to upset that bitch with her clipboard and cop another lecture on how to clean an exhaust fan while instructing you they will be back on Wednesday for another sale inspection which is the day of the kids soccer practice which means another house clean before the auction the following Saturday and there’s that new listing for rent the suburb over you need to get to along with half the neighbourhood who will be scrambling to compliment that spiv fuck with his clipboard all handling them glossy portfolios in hard copy complete with socials links. And goddamn that fibro knockdown in buttfuck nowhere just listed for $200k more than the nicer larger semi next door that sold last week. Need a smashed avo.

All these types of things may just reset things a little, but not really help much long term.

I posted this the other day but again its good for perspective to see how its not just an Australian problem, all, these countries tackle all these areas differently but still have the same issues. (yeah its 2021 but still)

The real problem is limited supply and increasing demand, nothing will change in the future, even when interest rates rise and prices fall, it wont make it any more affordable.

"House-price-to-income ratio in selected countries worldwide as of 3rd quarter 2021, by country"

https://www.statista.com/statistics/237529/price-to-income-ratio-of-hous...

Makes sense to me Flollo.

"All these types of things may just reset things a little, but not really help much long term."

so why do qualified commentators on various platforms keep recommending them?
why did labor take some of them (albeit piss weak - watered down versions) to the last election?
any why were they sent back to their corner by the electorate?

I liked that framework Flollo proposed better than the neg gear investors/FHB grant approach we currently have.

Dx3 wrote:

Haha way off topic of house prices, but I have commented to friends about the youth of today (16-25 yr olds approx) and the style they seem to all go for is 'I'm going to make myself look as bad as I can and I'll look cool'. So the shit fluff facial hair, mullets, op shop clothes that have no real style other than a mish mash of shitty, ill fitting items.

It's the best way to reclaim the culture as yours!

"I've noticed a combo of the Caesar cut at the front and the mullet at the side and rear....signs of a double-dip recession?"

Devastating, Chook.

OK I'll stop now. Back onto housing.

https://www.bnnbloomberg.ca/australia-s-surging-inflation-builds-case-fo...

"Swaps traders are now fully pricing in a 15-basis-point hike for next week’s RBA meeting that would lift the cash rate to 0.25%. The Australian dollar and three-year government bond yields also advanced."

ouch, before election - most economists think no, they won't, relayed in story.

"The result intensifies pressure on RBA policy makers to initiate rate liftoff, having been accused of falling behind the curve given global counterparts have already embarked on tightening. "

More house price porn - this from the USA (I cant find anything decent for AUS):

https://wolfstreet.com/2022/04/26/the-most-splendid-housing-bubbles-in-a...

RBA will want to see evidence of wage growth through economy.

They've been crystal clear on that over successive bulletins.

Absent that, tightening will be weak and transitory, same as 2012, last time we had a tightening cycle.

Don't forget, the RBA charter is two-fold: Inflation and employment.

That 2012 contraction brought about a short-lived correction in property prices (levelling off in some areas).
The last correction in 2017/18 was an artificial credit restriction around the Banking Royal Commission, also very short-lived.

Brilliant post Flollo. Vote #1 flollo for PM!!

Govts. Need to purchase large tracts of land and sell it as blocks to people in each region with no home for 200k max. each fully serviced. No developers, no agents, just a direct sale. It’s the only way the whole housing thing can be solved without costing the gov anything but an initial outlay. A good profit will actually be made by the govt. which can be put into social housing for the elderly disabled etc. After everyone has one home, the market price will balance itself again…..there’s one catch…you have to be happy for the people who get into the scheme even if you paid a lot more yourself….that’s life and we should be happy that everyone gets a home.

Some great points and ideas there flollo.

"If our goal is to increase homeownership we need to ditch negative gearing and channel funds into homeownership."

How well do you think a political party would fare if they suggested this as a policy, i.e ditch or even change/tweak negative gearing?

Yes we already know that answer. Actually the slight mention of 'negative gearing' would cause a(nother) meltdown from the media, Property Council and LNP. I like the sentiment, it makes sense, but unfortunately politics ain't about common sense.

What were your words FreeRide? Open the immigration spigots?
……”The 2021 Intergenerational Report has clearly signalled the government’s intention to quickly ramp up net migration to about 235,000 a year from 2024-25 – the fastest rate of increase in net migration in our history”
https://amp.smh.com.au/national/population-shock-where-the-truth-resides...

Let's remember in 85 Hawk with Paul Keating as treasurer negative gearing was scrapped and then in 87 Hawk actually brought it back in, which says all we need to know.

All getting rid of it does is reduce rental availability, creating higher rental prices.

Yeah sure in theory if combined with a scheme like Follo suggest, many become home owners instead of renters but im not convinced these schemes would work, you could just imagine the scams by people to get a house cheaper then latter sell at marker value.

Plus why would developers want to build places to sell at a lower price than market value???

Someone would need to pay the developers for that loss of revenue.