Vic wrote Yesterday at 3:03pm:
You know what p#sses me off about Professors and other know alls? They are not the desperate middle and lower classes trying to buy a home. They are not the ones who will do two or three jobs to make the mortgage, they are not the ones so desperate to get a house that they will lie on every form to get the loan. People ARE buying - they must be - every ex housing commission home in a town near where I live is sold within a week - all around the 550 - 650K mark. Houses that are 50 or 60 years old, but refurbished. The swanky places - sure - big downturn - but houses are still being sold
Cheese Grater Face Dave Hughes and a few Millionaires are losing negative gearing, something the majority of Australians do NOT have. Barring any further c3ckups by Albanese, Labor will poop it in
The market has already given its answer. The banks report that loan applications have fallen sharply since the budget. Investors have pulled back hardest, first home buyers not far behind. Prices are falling in Sydney and Melbourne. The Governor of the Reserve Bank has conceded that the market has softened faster than the Bank expected, and her chief economist has said plainly that the Bank will not be riding to the rescue.
Look at where the money has gone, because it tells you everything. Despite a slump, investors are still buying new houses, which keep the tax break. They have all but stopped buying established ones, which do not. That is not a market adjusting to a small change. That is a market walking away.
Of the two changes, it is the end of negative gearing that does the damage. Paul Keating tried the same thing once before. He restored it twenty-six months later.
Which brings us to the promise the whole scheme now rests upon.
We are asked to believe that new houses will keep negative gearing and the discount for good. This one carve-out, we are told, is permanent. Consider what it is. It is the last shelter left standing. It is therefore the obvious thing to knock down when the money runs short.
It is defended by a shrinking band of investors, since every grandfathered owner who sells takes his protection with him. And it is guaranteed by the same men who guaranteed the thing it replaced, in the same words, from the same seat in the same chamber. I would not buy a house on the strength of it. Judging by their behaviour, nor will anybody else.
There is a further unfairness, and it runs the opposite way to the rhetoric. A landlord who owns several properties can still set his losses against the rent from the others. He carries on much as before. A landlord who owns one has nothing to set them against. He must wait, perhaps for decades, until he sells. Large trusts and superannuation funds escape the changes entirely. A reform sold as levelling the ground for first home buyers has quietly levelled it inside the investor class as well, in favour of those who already have most.
And where prices are stopped from falling, the cost lands on tenants. Not two dollars a week.
Meanwhile, the fifty thousand keep paying. Interest rates have risen three times. Their arrears are running at nearly double the rate of other borrowers. In this country a mortgage follows you. A borrower who owes more than his house is worth cannot post the keys back to the bank and walk away. He goes on paying, year after year, for something worth less than he paid.
Behind him stands the taxpayer, who guaranteed the loan, on a market the Commonwealth then set out to bring down.
The bottom line is simple. The market has to clear. It can only do so through lower prices or higher rents, and probably through both. Which of the two does more of the work is a question about supply, and about politics. But it will be one or the other. The fifty thousand are exposed to the first. Every renter in the country is exposed to the second. There is no third way out.
They were told, fifty times, that there would be no need for one.ibidThe professors are not suffering personally. But you don't have to be suffering from a fatal disease to be a profesor of medicine. The same way you do not have to personally suffer from government idiocies to be able to point out such idiocies.
Albo survived the last election against the odds, largely thanks to the even greater ineptitude of the Coalistion over the last 10+ years. If he survives again it will be for the same reason,
not because he or his band merits it.