'Property investors don't "provide" housing unless they build new homes.'

The opening line should be engraved in seventy-two point font on the office door of every housing minister so they can see it every day.
Posted by Lev, Tuesday, 1 July 2008 11:19:03 AM

Correct me if i'm wrong but; If an investor buys an established property, then rents the property out, the original owner of this property has to live somewhere. Quite often in a new house they have had built. So in essense, there has been a new dwelling built it is just that it is not being rented as the owner is living there.

Some new owners of apartments get vacant possession and then leave them vacant.Surely some fiscal measures can be adopted to ensure that vacant land, houses and apartments are rated or taxed more heavily than occupied ones.Quite a lot of homeless people would then have a place to call home.If this problem is not solved then Australia will descend into a third world situation.Vagabondage and squatting will then prevail.

I'm with you Cuphandle, we are going to have to start to sit on these councils. A large part of our problems are the "planners". Every time they put pen to paper, we get some damn fool regulation, which does nothing to improve our shires, or their livability, but does much to waste our money, or restrict our use of our own properties.

Like you, I'm an older retired bloke, glad to have lived most of my life in an earlier time, when we did not have very much, but could enjoy what we had.

You would have to be mad to even comtemplate a rental property today. Apart from councils, & governments, trying to send us broke, the law is now stacked against landlords to such an extent that there are half a dozen trashed houses,sitting empty in my area. The law prevented the owners from removing deadbeat tenants, before the properties were vandalised.

This is a good article as far as it goes and I agree with Gavin's suggestions.

However, the article inexplicably omits two critical factors: population growth and the adverse affect that more subdivisions and housing development will have on our environment. This has been written of in the article "Melbourne 2008: Life in a destruction zone" at http://candobetter.org/node/628

As I have argued on may other discussions on OLO and elsewhwere, population growth is the driver of housing hyper-inflation. Land speculators and property developers have lobbied for population growth for the precise purpose of driving up the value of their investment.

Now that they have succeeded to the point of putting homes impossibly beyond the means of anyone with a normal income, they would now have us believe they want to solve the problem and provide affordable housing to the masses once again. (I have written of this in "Brisbane's housing unaffordability crisis spun by ABC to promote property lobby interests" at http://candobetter.org/node/610) To solve the problem, they are demanding of local Governments that they bypass all of the checks and balances that have, in the past served to stop development getting completely out of control.

Local Governments which have been elected to stop overdevelopment such as the Sunshine Coast regional council and the Redland City Council are now being over-ruled by an autocratic Queensland state government in the pockets of developers.

If they succeed, virtually all of South East Queensland will be covered with concrete and asphalt and rural communities to the north and west such as at Wyaralong and the Mary Valley will have been destroyed in order to provide South East Queensland with water, and the habitats of Koalas, squirrel gliders, flying foxes, the Mary River Cod and the Mary River Cod will have been lost.

daggett

While I agree with you about the use of population growth to drive demand, I believe that you are discounting the effect of government restriction. Were restrictions eased, both the housing and rental affordability crises would quickly be smashed, ironically by the same small property investors that the author of this opinion piece has sought to vilify.

No, the affordability and rental crises are not about small investors being given the same concessions accorded to any commercial entity. What it is entirely about is the removal of development rights from the same small investors. These rights are arbitrarily and opaquely administered by local government under a system inherently prone to corruption. The result is that corrupt government office bearers and their cronies profit greatly at the expense of Australia's citizens and future.

In order to address the regular failings of local government, nothing less than a judicial review of its role in the development process is required. Articles blaming everything from mad speculators to working women to negative gearing are a bum steer, and an insult to the publics' intelligence.

From the article “For purposes of income tax and GST, it could have deemed every investment property to be earning an annual income of, say, 4 per cent of the assessed site value”

So, suppose I get a rental return of say 6% (not an unreasonable expectation on any property which has been owned for say 5 years or is bought at a discount) - do I pocket the extra 2% income without paying the GST or being levied income tax on it? That sounds like a very generous incentive to draw investment funds into the housing market.

How do I fare with CGT?

A discount on that too?

“The Senators cited two submissions suggesting that negative gearing be limited to new homes, and one submission suggesting that the concessional taxation of capital gains be similarly restricted. I made both suggestions nearly five years ago”

Yes well, what can I say, well lets ask

When do “new homes” become no longer “New”?

Why should two identical properties, possibly side by side in the same street and 'occupied' on the same day, be assessed for tax on different rules simply because one was bought originally by an investor and is deemed “New” and the other sold originally to an owner-occupier who went belly-up and was hence purchased by an investor but is not classified as “New”?

As to your suggestions of five years ago, maybe others also made suggestions which were supported by better argued and more compelling reasoning.

Cuphandle “there are a lot of people ( home owners ) who are going to be losing what they now own and have fully paid for!”

Yep my daughter and I are both looking for some at the present time. Provided one is reasonably cashed up, there is a growing opportunity to purchase mortgage snatch-backs (opportunities abound in the area where I live) and turn one-time owner occupied properties into additions to the rental stock.