I don't think it's a case wanting to reduce the price of all houses, but more a case of dropping the price of basic, entry level family homes so that both rental prices and purchase prices are kept low.

Just thinking out aloud; but if the return to investors for this entry level housing (price capped at say $500k) was shifted from being based on a capital gain, to being tax incentives and government rent subsidies over a short period of time (say 6 years of negative gearing, rental scheme subsidies and straight line depreciation of fitout); then it may become attractive for high income earners (in the upper tax brackets) to invest in entry level housing and then flip the house every 6 years for another new one because the incentives run out. This would keep the building industry busy and hopefully keep the housing market loaded up with a good supply of 6 year old family homes to make sure supply easily meets demand at a reasonable price. Just sayin

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saltiest1 said..

FormulaNova said..

Harrow said..
So, all this talk about housing affordability, and now that prices are finally easing a little, I see news that they are relaxing restrictions on interest-only investment loans to help prop up the price.

It goes to show you how delicate the balance must be after all this time allowing it to create a bubble. Its a shame they let it get this far in the first place.

You would hope that someone in government would have a strategy about this stuff, but it doesn't seem apparent.

Prices falling is not a good thing, but stopping them rising is probably the best way to reign in affordability without too much impact on the economy.

So how do you stop prices rising without a considerable fall then?

Answer that correctly and you deserve a medal.

You get rid of negative gearing on any new investments, and reduce stamp duty to reasonable levels.

You should be able to get a cheap apartment here if they give it the all clear.

www.abc.net.au/news/2018-12-24/sydney-opal-tower-cracking-building-evacuation/10666734



"The doors of the building were jammed and the police had to break through to help residents out.

Police were at the scene carrying heavy-duty equipment to knock down doors."

" One resident told Nine News he heard a "big bang" like something "snapped" inside the building."

It was designed by Australian architecture firm Bates Smart

I find it a little disconcerting that people assert that the government should be doing this or that.

The whole balls up is a result of government manipulation to start with. Difficult to imagine how more interference is going to fix it.

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Ian K said..
You should be able to get a cheap apartment here if they give it the all clear.

www.abc.net.au/news/2018-12-24/sydney-opal-tower-cracking-building-evacuation/10666734



"The doors of the building were jammed and the police had to break through to help residents out.

Police were at the scene carrying heavy-duty equipment to knock down doors."

" One resident told Nine News he heard a "big bang" like something "snapped" inside the building."

It was designed by Australian architecture firm Bates Smart

"Police confirmed the 34 storey Opal Tower had moved "1millimetre to 2millimetres""
So the Pisa tower builders still hold the record by a country mile.

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Mr Milk said..

Ian K said..
You should be able to get a cheap apartment here if they give it the all clear.

www.abc.net.au/news/2018-12-24/sydney-opal-tower-cracking-building-evacuation/10666734



"The doors of the building were jammed and the police had to break through to help residents out.

Police were at the scene carrying heavy-duty equipment to knock down doors."

" One resident told Nine News he heard a "big bang" like something "snapped" inside the building."

It was designed by Australian architecture firm Bates Smart

"Police confirmed the 34 storey Opal Tower had moved "1millimetre to 2millimetres""
So the Pisa tower builders still hold the record by a country mile.

Thermite?

The builder, architect and structural engineer will be pointing at each other.

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Main said..
The builder, architect and structural engineer will be pointing at each other.

possibly substandard reo steel ....1 June 2016 - Steel and Tube is revealed as the New Zealand importer of 1600 tonnes of substandard steel for use in four bridges on the $450 million Huntly Bypass, which forms part of the $2 billion big Waikato Expressway.

www.rnz.co.nz/news/national/332448/steel-yourself-a-brief-history-of-mesh-madness

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japie said..
I find it a little disconcerting that people assert that the government should be doing this or that.

The whole balls up is a result of government manipulation to start with. Difficult to imagine how more interference is going to fix it.

Most people nowadays think the government should fix all the problems we face even though it caused half of them in the first place.

"Someone ought to do something about that". That someone is the State. This is how we think.

If housing was left to the market, as just say the market takes care of something like bread, we would most probably have a ready supply of all sorts of housing for people on all sorts of income. Somehow despite lacking a Department of Bread, we have a lot of bread.

However when the State in its various guises can tell you how many people can live in your home or how wide the steps can be or how much you pay for your mortgage plus whom you can borrow from, people scratch their heads and wonder why the housing market is so crazy, so prone to booms & busts.

We hope if there is just one just one more page of housing laws, just another chapter to the banking Act, just a few more bilaws for property zoning. If we just get the right politicians in who make the right decisions, then we will solve all the problems. After all we all know what a disaster it would be if people were made responsible for their own decisions.

Select to expand quote

Harrow said..

saltiest1 said..

FormulaNova said..

Harrow said..
So, all this talk about housing affordability, and now that prices are finally easing a little, I see news that they are relaxing restrictions on interest-only investment loans to help prop up the price.

It goes to show you how delicate the balance must be after all this time allowing it to create a bubble. Its a shame they let it get this far in the first place.

You would hope that someone in government would have a strategy about this stuff, but it doesn't seem apparent.

Prices falling is not a good thing, but stopping them rising is probably the best way to reign in affordability without too much impact on the economy.

So how do you stop prices rising without a considerable fall then?

Answer that correctly and you deserve a medal.

You get rid of negative gearing on any new investments, and reduce stamp duty to reasonable levels.

WTF? Please explain? Reduce supply = lower prices? Sounds like you have been drinking labour coolaid.

If negative gearing is removed, then there is less incentive for investors, which lowers prices. What's the tricky bit?

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lortap said..

Harrow said..

saltiest1 said..

FormulaNova said..

Harrow said..
So, all this talk about housing affordability, and now that prices are finally easing a little, I see news that they are relaxing restrictions on interest-only investment loans to help prop up the price.

It goes to show you how delicate the balance must be after all this time allowing it to create a bubble. Its a shame they let it get this far in the first place.

You would hope that someone in government would have a strategy about this stuff, but it doesn't seem apparent.

Prices falling is not a good thing, but stopping them rising is probably the best way to reign in affordability without too much impact on the economy.

So how do you stop prices rising without a considerable fall then?

Answer that correctly and you deserve a medal.

You get rid of negative gearing on any new investments, and reduce stamp duty to reasonable levels.

WTF? Please explain? Reduce supply = lower prices? Sounds like you have been drinking labour coolaid.

Sounds like you don't understand that the high prices are from speculation and windfall capital gains. If they weren't why are the prices dropping now that its harder to get an investment loan?

Where have you been living if you haven't heard people talking about how they are going to get rich from investment properties?

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Mobydisc said..

japie said..
I find it a little disconcerting that people assert that the government should be doing this or that.

The whole balls up is a result of government manipulation to start with. Difficult to imagine how more interference is going to fix it.

Most people nowadays think the government should fix all the problems we face even though it caused half of them in the first place.

"Someone ought to do something about that". That someone is the State. This is how we think.

If housing was left to the market, as just say the market takes care of something like bread, we would most probably have a ready supply of all sorts of housing for people on all sorts of income. Somehow despite lacking a Department of Bread, we have a lot of bread.

However when the State in its various guises can tell you how many people can live in your home or how wide the steps can be or how much you pay for your mortgage plus whom you can borrow from, people scratch their heads and wonder why the housing market is so crazy, so prone to booms & busts.

We hope if there is just one just one more page of housing laws, just another chapter to the banking Act, just a few more bilaws for property zoning. If we just get the right politicians in who make the right decisions, then we will solve all the problems. After all we all know what a disaster it would be if people were made responsible for their own decisions.

As usual you are right on the nail.

I think that what people are struggling to come to terms with is that the "gubmint" is a tricky mechanism which gives the voters the illusion that they have a say in the way in which business is conducted whereas in reality the "gubmint's" priority is to ensure that the fruits of the voters hard labour is channelled into the pockets of the establishment.

Which is why houses are now so expensive. The interest paid on a house which in 1985 cost me $67,000 and recently sold for $325,000 all goes into the grubby pockets of the folk who manipulated the situation with a nice little bonus in government taxes in the form of rates and stamp duty as a pay off for the civil servants who stood by scratching their balls and telling lies to the voters.

Ha, don't get me started on stamp duty. It can cost over a year's salary to move house in Sydney now. Just because you own a house in Sydney doesn't mean you are rich or on a high income. For many it just means they happened to buy 20 or 30 years ago, before all the craziness, and when circumstance requires them to move across town, paying $150K in fees to buy and sell an equivalent property is insane and just not possible for most. That means many choose to stay were they are and add to the traffic chaos instead of moving closer to work when they change jobs,

Select to expand quote

Harrow said..
Ha, don't get me started on stamp duty. It can cost over a year's salary to move house in Sydney now. Just because you own a house in Sydney doesn't mean you are rich or on a high income. For many it just means they happened to buy 20 or 30 years ago, before all the craziness, and when circumstance requires them to move across town, paying $150K in fees to buy and sell an equivalent property is insane and just not possible for most. That means many choose to stay were they are and add to the traffic chaos instead of moving closer to work when they change jobs,

Couldn't agree more. People are stuck in houses that are too big, too small, or poorly located for their needs. Add to that mix the fact that many of those who bought late in the cycle could be in negative equity, and everything just jams up.

It's grossly inefficient and it also means that those who stay put are contributing very little to the state government coffers, and are being subsidised by those who buy a house, often out of necessity, all the while receiving no more benefit from the state government than those who contribute little or nothing.

I understand where you're coming from Moby and Japie, and yes overall the government may not be in control of the property market, but good fiscal policy from them may assist by removing speculators and investors from jacking up demand and therefore prices at the entry level of the property market.

Like I described above, if investors were motivated to invest in newly built homes by good tax breaks and government rental subsidies; and then were economically motivated to sell those properties after a set period of time (by the tax breaks and subsidies ending after a nominal time of say 6 years) to then invest in another newly built home (because that's where the returns are); then rents should be cheaper in government subsidised new houses, and the supply of 6 year old entry level family homes would also be increased for first home buyers to be able to purchase without investor demand to compete against.

We are only talking about manipulating the entry level family home portion of the market, not the market as a whole.

And yep, Harrow and AUS1111, the frictional expense of moving house is wild and most people never consider it. I always thought $50k was about normal, $150k is pretty scary.

Its also a driving factor in granny flats .
People whose family expands dont move to bigger houses they build granny flats .
Out west every second house now has a granny flat .
I don't know who came up with this idea but the streets just dont have enough spaces for the cars to be parked some streets every house has a granny flat.
Its totally chaos in those.

Hey actiomax, I think you'll find it's a local government town planning issue and some councils are getting right onto it now because like you say, they've dropped the ball in a lot of areas and allowed the granny flat revolution to occur.

Yes I realize its local councils.
But when its cheaper to build a granny flat than pay associated fees just to move let alone the extra cost of the upgraded house people stay & build them instead.
Probably get knocked back from councils for second story additions.
I would say the majority of granny flats have family living in them and are not actually rented out to granny's.

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actiomax said..
Yes I realize its local councils.
But when its cheaper to build a granny flat than pay associated fees just to move let alone the extra cost of the upgraded house people stay & build them instead.
Probably get knocked back from councils for second story additions.
I would say the majority of granny flats have family living in them and are not actually rented out to granny's.

The state government brought this in to improve housing affordability... yeah right, not exactly the way to go about it, but someone thought it was a good idea. Except the local governments who generally have no way to stop it as its a state planning instrument.

Granny flats can be done under complying development if they meet certain simple rules and don't require additional parking. You are right I think in that the process for a second storey addition is more complex unless you just happen to already have generous setbacks, and in Sydney the blocks usually aren't that big.

My street is packed with cars as the previous local governments seemed to have the crazy idea that by reducing the number of car spaces allocated to each apartment it would reduce the number of cars that people would own. Instead they park on the street, and the high prices mean that both the husband and wife work and probably have a car each. If there are more than two people living in the apartment, there are probably more cars too.

I think its a symptom of a lack of proper planning and allowing the price of housing to get out of control.

Select to expand quote

FormulaNova said..

actiomax said..
Yes I realize its local councils.
But when its cheaper to build a granny flat than pay associated fees just to move let alone the extra cost of the upgraded house people stay & build them instead.
Probably get knocked back from councils for second story additions.
I would say the majority of granny flats have family living in them and are not actually rented out to granny's.

The state government brought this in to improve housing affordability... yeah right, not exactly the way to go about it, but someone thought it was a good idea. Except the local governments who generally have no way to stop it as its a state planning instrument.

Granny flats can be done under complying development if they meet certain simple rules and don't require additional parking. You are right I think in that the process for a second storey addition is more complex unless you just happen to already have generous setbacks, and in Sydney the blocks usually aren't that big.

My street is packed with cars as the previous local governments seemed to have the crazy idea that by reducing the number of car spaces allocated to each apartment it would reduce the number of cars that people would own. Instead they park on the street, and the high prices mean that both the husband and wife work and probably have a car each. If there are more than two people living in the apartment, there are probably more cars too.

I think its a symptom of a lack of proper planning and allowing the price of housing to get out of control.

in many hi density places on the GC its 4 hour max parking between 8 till 5 , its a real concern for renters as most older units have limited parking , another issue is owners now hogging the visitors car park permanently .

Select to expand quote

bazz61 said..

FormulaNova said..

actiomax said..
Yes I realize its local councils.
But when its cheaper to build a granny flat than pay associated fees just to move let alone the extra cost of the upgraded house people stay & build them instead.
Probably get knocked back from councils for second story additions.
I would say the majority of granny flats have family living in them and are not actually rented out to granny's.

The state government brought this in to improve housing affordability... yeah right, not exactly the way to go about it, but someone thought it was a good idea. Except the local governments who generally have no way to stop it as its a state planning instrument.

Granny flats can be done under complying development if they meet certain simple rules and don't require additional parking. You are right I think in that the process for a second storey addition is more complex unless you just happen to already have generous setbacks, and in Sydney the blocks usually aren't that big.

My street is packed with cars as the previous local governments seemed to have the crazy idea that by reducing the number of car spaces allocated to each apartment it would reduce the number of cars that people would own. Instead they park on the street, and the high prices mean that both the husband and wife work and probably have a car each. If there are more than two people living in the apartment, there are probably more cars too.

I think its a symptom of a lack of proper planning and allowing the price of housing to get out of control.

in many hi density places on the GC its 4 hour max parking between 8 till 5 , its a real concern for renters as most older units have limited parking , another issue is owners now hogging the visitors car park permanently .

Any new development as a minimum number of carparks you need to provide. Its always significantly less than the ideal number. Problem is that basement carparking is expensive to build and the extra carparks cost more than you can sell them for.

This in turn means developers wont build them unless councils force them to. This will in turn push prices up higher because at the end of the day this is where extra costs end up.

I've written here somewhere before that I worked out roughly $100,000 of the cost of a $500,000 apartment is paid by the developer in various taxes such as fees and charges.

That's a lot of embedded costs that reflects Zero bricks and mortar.

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Mobydisc said..

japie said..
I find it a little disconcerting that people assert that the government should be doing this or that.

The whole balls up is a result of government manipulation to start with. Difficult to imagine how more interference is going to fix it.

Most people nowadays think the government should fix all the problems we face even though it caused half of them in the first place.

"Someone ought to do something about that". That someone is the State. This is how we think.

If housing was left to the market, as just say the market takes care of something like bread, we would most probably have a ready supply of all sorts of housing for people on all sorts of income. Somehow despite lacking a Department of Bread, we have a lot of bread.

However when the State in its various guises can tell you how many people can live in your home or how wide the steps can be or how much you pay for your mortgage plus whom you can borrow from, people scratch their heads and wonder why the housing market is so crazy, so prone to booms & busts.

We hope if there is just one just one more page of housing laws, just another chapter to the banking Act, just a few more bilaws for property zoning. If we just get the right politicians in who make the right decisions, then we will solve all the problems. After all we all know what a disaster it would be if people were made responsible for their own decisions.

With less government intervention, a real free market, we might get more Opal Towers.

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evlPanda said..

Mobydisc said..

japie said..
I find it a little disconcerting that people assert that the government should be doing this or that.

The whole balls up is a result of government manipulation to start with. Difficult to imagine how more interference is going to fix it.

Most people nowadays think the government should fix all the problems we face even though it caused half of them in the first place.

"Someone ought to do something about that". That someone is the State. This is how we think.

If housing was left to the market, as just say the market takes care of something like bread, we would most probably have a ready supply of all sorts of housing for people on all sorts of income. Somehow despite lacking a Department of Bread, we have a lot of bread.

However when the State in its various guises can tell you how many people can live in your home or how wide the steps can be or how much you pay for your mortgage plus whom you can borrow from, people scratch their heads and wonder why the housing market is so crazy, so prone to booms & busts.

We hope if there is just one just one more page of housing laws, just another chapter to the banking Act, just a few more bilaws for property zoning. If we just get the right politicians in who make the right decisions, then we will solve all the problems. After all we all know what a disaster it would be if people were made responsible for their own decisions.

With less government intervention, a real free market, we might get more Opal Towers.

A kiwi builder built it correct? If so then it will be cheap chineese reo used , an easy fix , company liquidates, tax payers pick up the tab .

Yeah, but the Opal Tower issue was more of an engineering/construction issue than a pricing/sale issue ................ but true, a cut throat housing market may lead to people cutting corners on engineering and construction in order to increase returns.

Bazz, that's why the GST laws changed for new property. The shadier construction firms were shutting up shop before remitting all the GST they'd collected on sales. Same again, taxpayers miss out on revenue.

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bazz61 said..

evlPanda said..

Mobydisc said..

japie said..
I find it a little disconcerting that people assert that the government should be doing this or that.

The whole balls up is a result of government manipulation to start with. Difficult to imagine how more interference is going to fix it.

Most people nowadays think the government should fix all the problems we face even though it caused half of them in the first place.

"Someone ought to do something about that". That someone is the State. This is how we think.

If housing was left to the market, as just say the market takes care of something like bread, we would most probably have a ready supply of all sorts of housing for people on all sorts of income. Somehow despite lacking a Department of Bread, we have a lot of bread.

However when the State in its various guises can tell you how many people can live in your home or how wide the steps can be or how much you pay for your mortgage plus whom you can borrow from, people scratch their heads and wonder why the housing market is so crazy, so prone to booms & busts.

We hope if there is just one just one more page of housing laws, just another chapter to the banking Act, just a few more bilaws for property zoning. If we just get the right politicians in who make the right decisions, then we will solve all the problems. After all we all know what a disaster it would be if people were made responsible for their own decisions.

With less government intervention, a real free market, we might get more Opal Towers.

A kiwi builder built it correct? If so then it will be cheap chineese reo used , an easy fix , company liquidates, tax payers pick up the tab .

More likely to be the precast subcontractor QA issues rather than a design issue. more likely to be the mix than the steel

I read the precast slabs have been ruled out .

Isn't that what's failed ?

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Harrow said..
Ha, don't get me started on stamp duty. It can cost over a year's salary to move house in Sydney now. Just because you own a house in Sydney doesn't mean you are rich or on a high income. For many it just means they happened to buy 20 or 30 years ago, before all the craziness, and when circumstance requires them to move across town, paying $150K in fees to buy and sell an equivalent property is insane and just not possible for most. That means many choose to stay were they are and add to the traffic chaos instead of moving closer to work when they change jobs,

Agreed.

Stamp duty is a highly damaging tax that state governments are addicted to.

Likewise, NG is a highly damaging tax perk property speculators are addicted to.

To add to the above, yes I'm a strong advocate of completely removing stamp duty on established property. Of course it should be paid once - by the developer subdividing land and as a job lot. This would be passed onto purchasers but at a much lower rate.

State governments could then raise revenue from land tax payable only by investors, second/third home owners and hobby farmers etc. The current land tax exemptions would be maintained.

GST would need to increase perhaps.