Well, negative gearing should only ever apply to brand new housing and for just three-five years; which would result in more supply and turnover?

Ditto foreign investors, who should be limited to new apartments?

There should be a congestion tax, but only on enterprise located in capital cities; rather than commuters forced to go there to work or conduct commercial enterprise! (parking fees are already through the roof) However, excluded if located very adjacent to a rail line?

And outer suburbs must have more rail adjacent parking towers.

I mean if it were cheaper to park your car there for the day or 12-14 hours, and use the train rather than pay inner-city parking fees, and lock horns with a commute done at walking pace!

Most would chose the less costly and time consuming option!

Besides, trains can also serve outer suburbs, should any enterprise choose to relocate in order to save taxes, which could be ramped up, with increasing congestion.

I mean, it's only city centric commercial enterprise that creates all these population pressures/unaffordable house prices to begin with, along with greedy developers and pollies, without any other ideas?

Like say rolling out rapid rail, financed by the sale of thirty year self terminating bonds!

Which could be fully recovered by the later sale of resumed rural and newly rezoned urban land, along parts of mile wide corridors?

Six or seven of those resumed as alternative future routes, would enable plenty of new government land, released in a timely manner, which would also put downward pressure on house prices, preferably before the expanding bubble explodes!

And these new rail adjacent centres would ensure, the tracks would remain viable/earn a handsome return!

Exploding housing markets serve very few, save greedy gobble them all up, cashed up investors! Ah so Grasshopper?

As for rents going up?

It's hard to increase something already operating at max or in the red zone!

And a mindless recipe to just drive their customers further and further out; which can only ever exacerbate existing problems!
Rhrosty.

Hi Rhosty, if you only want negative gearing allowed for new houses, that would dramatically cut the number of rentals available.

How would that affect the price of rentals do you think?
Would you expect the Government to supply more housing for the rental market in today's 'budget emergency'?

Housing and building construction are one of the few areas where investment is possible, since manufactures are going. The more we put energy into pulling down good houses in order to build McMansions, the better for our GDP. Which shows how silly it is to put GDP as a measure of our wealth.
A holistic discussion of housing needs to take this into consideration too.

Rhrosty and suzyonline - it is fairly easy to substitute between old and new housing (and apartments). So restrictions on one will rapidly affect the other. For example, anyone with enough cash can buy an old house and convert it into a new one.
Rhrosty - a congestion tax is a good idea won't help housing affordability if there aren't enough houses being built in the centre of cities.

Ozideas - GDP isn't a measure of wealth, it is a (fairly flawed) measure of the change in wealth. The ABS measures wealth in the publication Australian System of National Accounts. The latest is here: http://www.abs.gov.au/AUSSTATS/abs@.nsf/allprimarymainfeatures/110953FFA28D4E52CA2572110002FF03?opendocument

Hi Susan, I believe negative gearing has simply allowed far more investors than is healthy for the rental market; and has created an environment where first home buyers are priced out of a market, which is full of depreciating structures. More home owners means less demand for rental properties!

And were we not lead by the woolly headed and or the unscrupulous, land rationing would cease and be replaced with something much more rational.

Currently, as much a 70% of some state's populations, is crammed (tinned people) into already overcrowded capitals, with the remaining 30% doing it tough for want of viable population numbers.

And would we but create the conditions as already outlined, to effectively reverse those population trends, rentals would have no other choice than come way way down!

Yes we can cope with our current immigration numbers, just not in already overcrowded capital cities.

Yes and given we build those very rapid rail links, there's a case for building government owned high rise accommodation along side the tracks; and allow good quality tenants an option to buy their well looked after premises, after say 5 years and with part of their accrued rent acting as their deposit?

That would get them off of the rental merry-go-round; and started as property owners.

Those towers could be multifaceted, with commercial operators occupying the first 2-4 floors, inclusive of Kindies or creches; the average or below average income tenants, the next 10-15 floors, and the highest levels/penthouses etc, occupied by the well heeled?

Which would prevent them becoming ghettos populated by the poor and or, career crims.

But rather places that allow the unemployed/underemployed, to mix daily, with potential employers?

And future intending owners taking pride in their building! And heaven help those who don't!
Cheers, Rhrosty.

Micheal P; I was referring to brand new never lived in housing, not recently renovated older structures; some of which would be forcibly renovated due to the mandated removal of asbestos!

And given its widespread use in established housing, a logical reason to buy brand spanking new.

And there's significant differences between apartments and housing.

Apartments share the cost of the land, are invariably concrete structures, and therefore cost far less to build per unit, and last longer than timber, bricks and mortar housing.

I mean, prestressed concrete reaches its full strength at around 80 years!

And far better use of limited government money; and tailor made for 30 year self terminating bonds, as the superannuation friendly financing medium!

Given, those and eastern seaboard rapid rail, guaranteed to make a substantial profit over the longer term.

Imagine, the tower would pay itself inside/over thirty years, and the remaining fifty good years, would be almost pure profit; and able to be reinvested in similar long term profitable projects! Ditto rapid rail!

And one can only imagine how high rents, rail fates or average incomes will be by then!

All that's lacking in that scenario, is governments with enough long term future vision, to bring them into fruition!
Rhrosty.

Michael I think you have had too long in government & large NGOs, & are therefor missing the obvious point.

We have to get all public servants the hell out of CBDs. With modern communications there is no reason that the bulk of bureaucrats, & yes even economic advisors, can not be moved to the outer suburbs.

You suggest some reward for private companies moving out, but why not public servants. Thumb your nose at the property council, & build office space for them out to the periphery. Much commercial, & particularly high end retail will follow them, & the current offices can be converted to inner city apartments for the chattering class that actually like living in them.

These simple steps solve much of the peak hour traffic congestion, along with a lot of the housing costs. I had a lot of Brisbane people working for me in a company located in the northern Gold Coast, as commuting was easier than to anywhere in Brisbane, going against the traffic.

Then get the planners, [& council & government charges], the hell out of development, & let property owners actually do what they want with their own property. The glut of building blocks would lower housing prices dramatically.

Just remember it all starts with getting bureaucrats out of the city centres.

Correction: Rail fates should read rail fares or rates. Apologies for the fat fingers and the automatic self correcting program.

Thank heavens it's not Singaporean english. I mean what would the program correct (fleight lates) fl-eight elates into?
Rhrosty.

Hasbeen - I did mention transport as an option: reducing demand for housing near the city and increasing it on the outskirts.
A better idea is telecommuting which would allow people to work from anywhere, including completely outside cities.

I ponder this scenario:
a) If part of the problem with the high cost of housing in oz is due to investors taking advantage of negative gearing and.......
b) If most of those investors are asset rich baby boomers and....
c) If most young folk can't break into the housing market because houses are too expensive what happens when........
d) the said asset rich folk want to sell their houses...
e) who is going to have the equity to buy those houses as most of the young folk have been spending all their money on high rents?
Is it then that the price of housing will plummett because there'll be lots of houses on the market and nobody with the money to buy them?
As a cusp baby boomer with a 16 year old son I grieve for our young folk who can't afford to have their own home. What a sad reflection on a generation of folk raised by those who lived through the great depression and had nothing! You've feathered your superannuation portfolios now START GIVING BACK

The solution is very, very simple. Take away a very broad and non-targeted tax break that really only benefits the banks bottom line in the long term, and replace it with a program that targets specific areas of the building industry needing tax breaks which can quickly alleviate market demand for rental housing. For example only provide this sort of market interference, ie market subsidization program for wealthy people to purchase second hand rental market properties, with a program that is only available to developers and builders of new housing.

Alternatively demand that rental and second house owners that want tax breaks to justify the tax break with a ratio spend on upgrades against the purchase price of the house.

A simple formula I apply to government subsidy is by replacing one commodity with another. In this instance try replacing a private motor vehicle with the house. Would it be wise or necessary for the government to provide tax breaks for people to purchase a second hand car so that the car then then be used to enable wealthy people to make an income from poor people so they can retire comfortably? While the poor people on low incomes are subject to the market forces in diametric burden imposed by a squeezed rental market eg tight rental market? rents go skyhigh and poor carry the burden, while mortgaged owners and banks reap profit and aren't exposed negatively by the market flunctuations thereby also ensuring the poor new entrants into the hosing market are effectively brickwalled by government subsidy and greed of lazy investors that are cash rich and motivated by the fear of losing wealth through the normal business functions involving production or investment in innovation and productivity.....

Try and float that one through parliment. lol

Negative gearing is merely deductability in an investment, to remove it is to permit the government to start picking winners again which is assured to be a fiasco. This stupidity would assuredly spread to other investments with a cascading, slow rolling disaster.

The problem IS government intervention in not releasing land and trying to force people to live in "Ticky Tacky boxes" which truly are Units that the Great and Good wouldn't touch with a 12.194 metre pole.

Price rises in Inner Sydney is also separately driven by the huge quadrilateral economic asset that is the Airport, Sydney CBD (damaged by Clover) and the 2 Unis.