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The Forum > General Discussion > Pink Bats Royal Commision

Pink Bats Royal Commision

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There isn't a bubble. Prices exceeded affordability as traditionally defined.

While on the subject, Australian tenants and landlords should adopt the US approach where properties are leased 'bare bones' and the tenant equips and decorates to taste. A similar system works well for commercial property.

That will result in reduced management, maintenance and repair costs, fewer disputes and much cheaper rents, all for obvious reasons. It would also be fairer for good tenants, who inevitably shoulder the additional costs from tenants who damage property and/or default, which are common.

The change would allow owners to offer much longer leases to good tenants, again for obvious reasons. It would enable much simpler regulations and less administration by government tenancy authorities, who should aim to pass back savings to tenants, ie., a proportion of the interest they earn on the money market from tenants' bonds.

Returning to the RC, it has been adjourned until a date to be notified. Here is the site to watch,

http://www.homeinsulationroyalcommission.gov.au/Hearings/Pages/default.aspx
Posted by onthebeach, Thursday, 2 January 2014 10:10:17 AM
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Firstly I would like to wish all of you on OLO a very Happy New Year and trust we will all have fun blogging in 2014.

I am sorry this is off the topic but it seems relevant.

On the subject of negative gearing, I thought it was all done and dusted during the Hawke-Keating years, but correct me if I am wrong. I thought the Hawke Gov’t stopped the practice but Keating (as treasurer) was forced to re-introduce negative gearing because the rental market dried up and the poor were forced to pay rents that had risen out of proportion to inflation.

I would like to make a few points about negative gearing; it cannot go on forever. The ATO requires that there be “light at the end of the tunnel” and that the investment eventually makes a taxable profit. In real terms this means that the investment may be reviewed after about eight years and in extreme cases the avoided tax may be deemed by the ATO as due for collection.

Personally I prefer the local share market for my “other” investments. Most of us own our own homes and for many this is their first and largest investment. I like a 60:40 split between real estate and shares, so once we have started buying our own home, the next best investment is in shares. To play safe it is good to have a spread of investments and for most of us this is impossible with real- estate. How many of us can afford a diverse portfolio of real-estate, such as one bedroom units, a factory, a domestic dwelling or a shop in a variety of location’s? But with shares you can invest in AFIC or Argo and get a great spread operated by professionals with years of experience. If you invest in Argo or AFIC, any of the banks or Telstra you can get great returns without any outgoings such as repairs and maintenance, land tax or council rates and there is no stamp duty on the purchase price.

Once again, Happy New Year,

Geoffrey Kelley
Posted by geoffreykelley, Thursday, 2 January 2014 11:08:44 AM
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G Kelly I found your post spot on and agree totally.
Rechtub I knew what Susionline wrote read every post in any thread I get involved in
Great deal of talk about the effectiveness of that tax off set but it drive in part of housing sector and almost toatly our unit/flat market.
Over seas investors are buying as an investment in that market more than housing.
Forget what I write on the subject of housing bubble, even forget those who have been forced out of the Sydney rental market.
But at your peril find and read the experts views in investing and soon you will see an inevitable burst bubble will come.
Posted by Belly, Thursday, 2 January 2014 12:47:30 PM
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G Kelly, I agree to a point, however, for one to be successful in shares, you must approach them in the right way.

One of the downfalls of shares is that they are too easy to get out of, and as such, many investors realize a loss simply because their shares drop by say 20%.

I do however think you are more referring to managed funds, shares but in a different way.

As for turn g a profit, this ruling put an end to many scams like charter boats etc, as many were simply scams to allow owners to have a boat at the expense of the tax payer. In fact, I had one myself at one point.

The ruling also put a stop to what was commonly known as the queen street farmer. On five acres expecting to run a business in say fruit trees.



Belly, to me, for a housing bubble to burst, means all housing markets have to crash and I simply can't see this happening.

Sure, the Sydney unit market may crash, but only because of an event like over supply.

One thing about property is that while one market is suffering, there are usually others that are goimg gang busters.

Our biggest challenge in the next few years will be jobs.

As for opponents of negative gearing, all I can say is be careful what you wish for as you may not like what you get if you get your way and have it squashed.

Now as for the RC, bring it on I say as Mr Rudd must face up to his actions, actions that were directly linked to the deaths of four young innocents.
Posted by rehctub, Thursday, 2 January 2014 2:33:33 PM
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Geoffrey Kelley,

Yes, I agree with those facts.

What can be added is that governments have regularly tweaked investment property to take away any possibility of a return commensurate with the high risks of that form of investment.

John Howard also trimmed property owners in case any forum 'Progressive' is wondering.

I notice that no-one is concerned about unfair nasties like land tax.

The regulatory change risks are far too high for starters, and I am not referring simply to the negative gearing that is available to other forms of investment as well.
Posted by onthebeach, Thursday, 2 January 2014 3:20:06 PM
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OTB, you said that nobody mentioned land tax; be fair, I did say " returns without any outgoings such as repairs and maintenance, land tax or council rates and there is no stamp duty on the purchase price."

I would add that with equities if you need some cash you can quickly sell a few shares and get your capital within days, cf. property, you can't sell a bedroom!

Geoffrey Kelley
Posted by geoffreykelley, Thursday, 2 January 2014 7:19:30 PM
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