Neither side of politics wants to talk about housing affordability. Rather, they would rather ramp up immigration levels and also allow non-residents to buy up Australian property at unprecedented levels. Young Australians are literally being priced out of the market by foreigners.

when I see cafes charging $6 coffees, bars charging $6 beers and restuarants charging $40 main courses full of aspiring first time home buyers you realise that things are not as simplistic as you might think. Added to this the bogan buses filled daily to Phuket, Bali and other places and you realise why many can't afford to pay for the 4 bedroom mansion or trendy inner city apartment that they desire so much but aren't prepared to make to many sacrifices to obtain. Strange world that we live in. Doing away with negative gearing is bound to create a huge rental shortage in capital cities which is often ignored.

Choosing to live on a tight budget for a few years and make a few sacrifices does not seem to be in the picture for many spoilt from day one of birth.

There is a reason for this, Foyle.

>>How many wage plugs in Australia know that anyone whose only income is franked dividends pays no tax.<<

Here's the definition:

"Definition of 'Franked Dividend': An arrangement in Australia that eliminates the double taxation of dividends. Dividends are dispersed with tax imputations attached to them. The shareholder is able to reduce the tax paid on the dividend by an amount equal to the tax imputation credits. Basically, taxation of dividends has been partially paid by the company issuing the dividend... Essentially, the company pays a portion of the tax that you would owe if the dividend was unfranked."

As for your example - "someone grossing $120,000 per annum in franked dividends" - have a think about how much capital would need to be tied up in those investments, in order to get that level of franked dividend.

Try a few examples first, and take a look at the dividend history for the past five years. That's a mountain of cash tied up, right there.

@runner, Saturday, 14 June 2014 1:52:27 PM

Pithy and spot on.

runner

When is the last time you bought a house? 1970?

This whole mess could have been averted if banks were told to insist on a 20-25% deposit. Now our houses are 40% over valued.

The biggest correction of all time will happen soon, so prepare well as our banks have enormous derivative exposure and assets that are way over valued.