12-12-2021, 10:25 AM
I seem to remember the Housing Corp loans were 3% when normal loans were up to and even over 20% (my first mortgage was 15.65%). Recently we've had mortgages at an all time low, so even the Housing corp loans that seemed like "nothing" back then were high by our recent standards. But of course they are increasing again now.
"A carefully applied CGT could start the process, if it was targeted at investors with more than reasonable holdings". How does a CGT targeted at investors have any impact on anything? Investors don't sell, apart from those currently bailing out because of the law changes that make it harder and more expensive to be investors. And maybe the occasional one wanting to clear mortgages - again, more common now because the supposedly neutral reserve bank has imposed lending rules that mean investors are now required to pay off loans they would otherwise have continued interest only.
"So now it is time to recoup the capital gains?". The ongoing disincentive in being a landlord combined with the current high capital gains at the moment do make that a very attractive option for some. Care still needs to be taken though - those who want their properties to be retirement income can still lose. Once a property is sold it never makes you any further income. Sell too soon and you could still run out of money in old age. The GRI that comes from your lifetime of paying tax isn't really that great a return and although there seems a lot to be gained by the current high prices, everything is relative. People selling now need a plan for what they are doing next or they might find themselves needing to rent.
For younger people starting out, yes, it is harder at the moment than it used to be, but it's not insurmountable. Looking at articles in the media over the last few months, the proportion of first home buyers has been increasing, and their average age of about 35 has been steady over the last few years. Those who really want to can find a way. Those who spend all their money frivolously don't. Frivolously doesn't mean the odd coffee or cafe lunch, it's those who buy 2-3 coffees, plus pies and filled rolls for smoko and lunch every day. Who drive a car that's more expensive than practical. Who drink alcohol and take drugs. Etc. Yes, they should have fun, but also need to be able to plan for the future which is what seems to be lacking. It's called delayed gratification and kids learn it at about 5 years old. Seems some of them lose it when they get to 20.
"A carefully applied CGT could start the process, if it was targeted at investors with more than reasonable holdings". How does a CGT targeted at investors have any impact on anything? Investors don't sell, apart from those currently bailing out because of the law changes that make it harder and more expensive to be investors. And maybe the occasional one wanting to clear mortgages - again, more common now because the supposedly neutral reserve bank has imposed lending rules that mean investors are now required to pay off loans they would otherwise have continued interest only.
"So now it is time to recoup the capital gains?". The ongoing disincentive in being a landlord combined with the current high capital gains at the moment do make that a very attractive option for some. Care still needs to be taken though - those who want their properties to be retirement income can still lose. Once a property is sold it never makes you any further income. Sell too soon and you could still run out of money in old age. The GRI that comes from your lifetime of paying tax isn't really that great a return and although there seems a lot to be gained by the current high prices, everything is relative. People selling now need a plan for what they are doing next or they might find themselves needing to rent.
For younger people starting out, yes, it is harder at the moment than it used to be, but it's not insurmountable. Looking at articles in the media over the last few months, the proportion of first home buyers has been increasing, and their average age of about 35 has been steady over the last few years. Those who really want to can find a way. Those who spend all their money frivolously don't. Frivolously doesn't mean the odd coffee or cafe lunch, it's those who buy 2-3 coffees, plus pies and filled rolls for smoko and lunch every day. Who drive a car that's more expensive than practical. Who drink alcohol and take drugs. Etc. Yes, they should have fun, but also need to be able to plan for the future which is what seems to be lacking. It's called delayed gratification and kids learn it at about 5 years old. Seems some of them lose it when they get to 20.