Here we go again, politicians trying to “fix” something which can better be left alone.
All that does is lower the market rate which means theres less incentive to invest in rental property. Rents should be going up now. With housing in a down turn theres more demand for rental properties so rents need to rise Also investors have to cope with higher interest rates . Its just the normal building cycle, a few years ago units were going up everywhere in my street. Theres not much happening know but you can bet it won't be long before we see more pooping up.Under the scheme, investors can claim a tax credit of $6000 a year for 10 years for new properties that are rented at 20 per cent below the market rate.
Besides, the Commonwealth government already subsidies rental properties by allowing negative gearing, I like to know how much that costs.
On a related matter, the Daily Telegraph had this story on the front page today. One day they are running stories on the lack of affordable housing, the next day its the problem of a real estate “landslide”. The two seem to counter each other.
One day they are running stories on the lack of affordable housing, the next day its the problem of a real estate “landslide”. The two seem to counter each other.
ReplyDeleteI think this might be to do with the 'two-speed economy' (whatever that term means!) in real estate. Premium property is still going great and rich folks can still afford it, but the low-end has been going great is now creating problems for the not so well off.
I'm still advocating lowering stamp duty, decreasing building regulations and red tape, and releasing and re-zoning land to allow more housing to be built. Other than your market based approach i.e. rents go up so more people invest in property, what do you think the government should do to help the not so well off end of town?
G'day,
ReplyDeleteI'm not sure theres much the federal government can do, besides releasing any spare land they have. The affordablity crisis is caused by state governments restricting the supply of land. Landcom was started by the Wran government with the noble aim of releasing affordable land for new home buyers, now it money making machine for the State gov. I'll post something on this soon.
ta
Ralph