The Forum > General Discussion > Welcome back Malcom, not before time i might add.
Welcome back Malcom, not before time i might add.
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$230,000 for a brand new 6 star energy rated 3 bed-roomed house, raised ceilings in the living area and a built in garage. An expected rent of $310 to $330 and within 45 minutes train ride to the Melbourne CBD. The area is the focus of a revitalisation project by the state government where sizable number of the rundown large housing commission blocks were split into 3 titles. The land is markedly cheaper, no stamp duty on the house, and only three building companies chosen out of those who tendered so economies of scale are realised. While you and I might bemoan the lack of a big front yard there is still plenty of space in the rear, although this generation don't seem as into gardens as ours was.
There is a new school, new childcare facilities, a new medical centre and a host of other civic improvements.
Is there a risk this will not work, that the turnaround in the suburb not be realised? Of course. Few investments are risk free. But that is why you do your research. Many don't.
You still haven't answered my question though.
Why should other Australians subsidise those who instead pay inflated prices for existing houses, well above the expected returns, who are banking on the increase in capital gain on the property. You and I have both owned businesses. Would you ever purchase a going concern knowing you would be making a loss over the next 10 years in the hope you would get more than what you paid for it plus inflation? No. Would you expect the government to finance such an investment? No. So why do you make an exception for a housing bubble?
Now I'm willing to see a subsidy to produce a social good. Providing new housing stock and work for our building sector could be argued is a social good. Extending that subsidy for existing purchases is not.
Come on mate, you think a bit about issues and normally take a fairly hardnosed practical approach. Why the seeming blind spot on this one?