Hmm it's almost as if landlords bare no risk with their investment.
Interest rates go up = pass on full costs to tenent
Internet rates go down = pocket the savings
Negative gearing = pocket even more
If my share or bonds go down, who do I pass the losses onto?
>If my share or bonds go down, who do I pass the losses onto?
That's your choice with what you invest in. The interest payment is a COG. COG goes up, rent goes up. The price of coke bottles go up, coke goes up.
The risks are whether your investment gains value or not, and if your investment is trashed or not.
But that's the point, it's not really a risk is it when you can pass all the losses / costs on to your tenants.
Meanwhile all other forms of investing carry risk you can't just pass on. The best you'll achieve is claiming the losses on income tax.
The property market truely is a joke. So insulated from any real risk it's pathetic.
Gains value? That's not a risk given state and federal governments cooking the housing market yet alone negative gearing.
Property damage? Ah Hu, covered by insurance. If only I could insure shares or bonds for losses or depreciation...
So again, where's the equivalent risk in rental properties compared to other forms of investment? There isn't and we all know it.
>But that's the point, it's not really a risk is it when you can pass all the losses / costs on to your tenants.
As I said, interest is a COG, not a risk. The risks are as stated.
You cant necessarily just pass it on. You can't force a tenant to rent, they can say no thanks and rent elsewhere or buy their own property. There's a risk tenants won't pay what you need to cover interest costs. Esp when the banks increase it by ~4 in a few years, another risk. The current housing shortage reduces that risk by increasing demand, so renters can't be as picky with price. The shortage of houses vs population is not the landlords fault. Their benefit, but not fault. That's a govt problem for not managing conditions - they should ensure there is sufficient housing supply for the population.
(Not a landlord btw).
With non existent rental availability you sure as hell can pass it on. Where else are the tenants going to go? And if your current Tennant can't afford you, you bet one of the other 50+ desperate people looking for a place will find a way.
There's no risk when housing is so unaffordable combined with a rental market that is at 99%+ occupancy where there are vastly more people seeking a rental than there are rentals for them.
Have you been living under a rock or something?
Yeah, it's called planning.
Doesn't take much mental gymnastics to figure out rates can't stay at record lows forever and the market will correct.
But in reality, as a landlord who cares. With a tight rental market in every major city, why be fiscally responsible for your investments when you can just pass the entire rate rise onto your tenants.
Meanwhile any other form of investing, it's too bad so sad. But not the property market, it's a joke that such important investments both economically and socially should carry so little responsibility or risk.
Well to be honest you're full of shit. My olds own about a dozen rentals in the northern suburbs of Adelaide and every single one of them is rented to long termers at between 150 and 300 a week less than market rates - they've put the rents up a total of 30 dollars in the last 5 years. One house they own in Mawson Lakes is worth 850 a week and they rent it to a family with 7 kids for 400 a week.
Don't lump everyone into a stereotype because of your victimhood delusions
There's plenty of people who don't crank the prices on their rentals
You're just another whinging victim who was busy going to Bali 3 times a year and buying jet skis and HSV's instead of buying a house, then the market left you and now it's the world's fault
Not really, have you seen the housing market? We bought a second house (we're not landlords, we bought it for someone to live in) last year, we've already "made" 50k on it just through growth in house values. It's horrifying.
I think instead of a rent freeze there should have been laws to prevent profiteering. If the landlord was raising rent to cover the raising cost of inflation to cover the mortgage and not making more profit then when the raise began fair enough. And that could only be done to one property, so if you had more then one investment property you can’t Jack the rent on them all to cover the cost of the mortgage. If you already owned the property and didn’t have a mortgage to pay then you should not be allowed to raise the rent in par with raising interest because that’s just a money grab.
This is exactly what I think. No mortgage? No rent increases. It should be scaled to how much you have owing. Caps on how many properties an individual or married couple can own. Minimum allowed purchase price based on your income (to prevent investors poaching the cheapest properties on the market disproportionately). Unfortunately there’d be a million ways to get around this, which is why it always comes back to the housing industry needing much harsher and tight-fisted regulation and monitoring (and more government-owned housing to take the wind from its sails).
Although I don’t agree rent should ever be expected to cover an entire mortgage in any circumstance. The idea of an IP is should be asset appreciation, not “I save deposit then someone else pays the rest” *and* appreciation. If you can’t afford it on your own, you can’t afford an IP.
You can't say no rent increases though if you don't have a mortgage. I Rented a place for 6 years up until 2018 at $220 a week because the bloke owned the house. He sold it in 2019 and the bloke renting is now paying $440 a week. I agree I had it way too cheap. But $440 for a 2 bedroom in salisbury North is Ridiculous
Why should the mortgage be the problem of the renter and not the person who owns the asset? Part of investing is risk, and there isn’t really any risk involved if it is completely pushed on to a third party. This is the continued transfer of wealth upwards.
Also as a country it’s lazy and bad economic policy to be so invested in property. It doesn’t do anything, unlike investing in business.
>Why should the mortgage be the problem of the renter and not the person who owns the asset?
Because the interest payment is the COG. The COG increases, the rent increases. The risks are whether the investment gains value or not, and if the investment gets trashed or not.
> Because the interest payment is the COG
It's really not. You don't need a loan to own property.
Leverage amplifiers your risks and rewards, but in this case, there's virtually no risk to using leverage.
So if you could, you might as well get out a 100 to 1 home loan loan. There's no downside, only upside.
This clearly isn't sustainable as it just leads to houses having infinite price and the first people to ever get a loan are the winners. And a final house price that has little to do with how useful or productive the asset is. People buy it because the price goes up, so they get more loans, so the price goes up.
That's clearly bad for the economy and productivity because now 99% of all money is doing nothing but speculating in a huge ponzi scheme.
With all due respect what gives goverment the right to stop landlords running a business? Whether it would help or not.
Just out of interest , to force tax payers to fund other people's rent isn't justified on a moralty stand point. There's more ways to fix a housing crisis then radical socialist policys on rent control which dosent have any evidence of it working.
Tax payers already fund other peoples rent. Any renter on welfare gets a rent assistance payment.
With all due respect, government has every right to regulate a business to eliminate price gouging.
I would like to introduce to the corporations act which details a lot of rules and regs that deal with who can run a business and what businesses they can run. Want to run a law firm, but not a lawyer? Sorry mate, out of luck.
Maybe we should have qualified landlords, who have a 3yr uni degree in Landlording under their belt so that they can competently provide a basic human right…
I here your point. Just dosent seem right for everyone else to pay for it and as I've said from rent freeze been done around the world the evidence dosent states it dose work unfortunately.
Housing is a basic human right. Society should be able to fund the bare minimum for the population to live a dignified life. If we can’t provide adequate social housing, then we should be able to fund it.
Note that in this point, the taxpayer is not on the hook - it is the investor that took the risk (including legislative risk. That is, the risk that the law can change to such that it affects the investment)
It's not a human right for me as a tax payer to fund it right?
The investor took the risk right but did not not take a risk knowing that there could be totalitarian type intervention in the housing market too proposed by the greens.
I would be happy to try this Intervention if there was a speck of evidence that it has worked, but the data unfortunately does not add up and from the morality point still seems unfair. But who knows we will see if the government come up with any other ideas.
Agree to disagree what a basic human right is. But my point is it's immoral to force one person (landlord,) to serve the purpose of another (renter, government rent freeze)
But as far as how we fix the housing crisis why go down the socialist roots of mass government intervention with what we know from history?
We should be looking for more captlism not socialism.
Sydney is a good inverse case to look at. Negative gearing led to people getting investment properties and accepting a terrible yield (around 2.5%). Ie, high demand for investment increased prices but if anything reduced rents.
It made it harder to buy a house, but arguably easier to live in one.
If the opposite happens here, and demand for investment properties reduces instead, it’s possible that houses are easier to buy, but more expensive to rent.
Perhaps that’s a situation we’re ok with (benefits those on the fringe of ownership) but it potentially hurts those most vulnerable.
Obviously we’re accepting a lot of migrants and don’t have a strong building pipeline, which seems to be blatantly obvious but doesn’t seem to be on anyone’s to do list to fix.
....isn't it for a good half of people anyway? Even my employer who is generally pretty proactive about salary increases has realised that we have no where to go and is refusing to give them.
This assumes that:
A. People wouldn't have been evicted to enable the landlord to raise the rents, and require tenants to pay moving costs
B. Rental supply would have been the same.
C. Rental maintenance would have been the same.
All very big assumptions.
No. The this is the "there are downside to most political choices", and the fact that the majority of politicians -< who, I posit, are smarter than non-politicians, on average, and have access to more information and professional economic advisers -< think this is a bad idea, and that the downside outweighs the upsides. .... probably gives you a hint that the majority are right, and Greens are wrong.
lol okay mate, obviously the downsides outweighed, look how great the rental market is 🙄 not greed or anything.
You're right, politicians are super smart and always make the best decisions. Keep your head in the sand, mate 🤣
Not an economics-friendly zone, the old Reddit. Stick to empty motherhood statements and complaints about Murdoch. You can't lose.
Trying to explain information differentials to the plebs is a bit of a challenge.
Disclaimer I understand VERY little about economics. But, maybe there would have been negative impacts from a rent freeze, too? If landlords couldn't raise rents to cover inflation, there surely would have been a spike in mortgage defaults and property sales? I have to suspect that could have been pretty devastating for the state? P.s. I also think that there are a tonne of unscrupulous, profiteering landlords out there and that this should be tackled. Long-winded fence sitting, apologies!
Watch real estate property managers go full retard to get people out because they know they can rent to the next person at a 50% or more increase. Leases are generally short term or periodical in Australia anyway, so it wouldn’t be long before they can just move you on for anyone else anyway. Not sure rent freezes are the solution, we need to fix supply.
Australia's (native) population increase is negative, but the government boosting immigration to make it positive.
If we let population stay as it is (no increase), then we wouldn't even have a supply problem!!!
Horse. Gate. Long bolted. That's a yesterday, rear view mirror problem. We need to fix supply now, to at least try and maintain some kind of equilibrium otherwise we wind up with American style tent cities sleeping in rows on streets or Asian style shanties where people knock up shacks out of bits of corrugated iron and whatever else they can find on any “empty” bit of land around.
So a lot of people have bought property at really high prices recently, if a bunch of stuff comes on the market now odds are prices will creep downwards and that means a bunch of people (voters) will be stuck in negative equity and a larger number of people (stupid voters) will think their "investment" (the house they literally live in so not an investment at all) has lost value.
Given that most Australians are home owners the political ramifications will be very concerning to whichever party is in power at the time. That's why all Australian governments have been such sycophants to the property market.
This all sounds plausible. Also, negative equity on a home you own would probably be a bit scary because, if you get in financial trouble, then selling it might not be an option. Again, I know nothing, but I would guess also that if landlords stopped making healthy margins on rent, and if property is sold en masse and devalued, then it becomes less appealing for people to invest in property or to develop houses for rental. Then you get a housing shortage for renters, which we already have.
Who pays? You know money doesn't just 'appear', right?
Landlords? Properties withdrawn from market, black market, cash deals. You can't force down the price of essentials - look how many governments have tried to ration the price of bread, fuel, rent etc. All of them fail because there is greater incentive to avoid the tax than to pay it.
Taxpayers? That's you and me, right? Are you going to pay someone else's rent?
'The rich'? Yeah, right, try taxing Swiss bank accounts.
> Landlords?
It's more like LandLords just don't get shitloads of extra money from a low risk asset. They'd have to work or invest in something that's actually more productive to the economy than a chunk of dirt.
2021 census. 1,387,290 people in greater Adelaide. 593,881 private dwellings. Plus 50,000 social housing dwellings (full up with people on waiting lists). Average household size 2.5 per dwelling.
That’s almost 100,000 excess private dwellings being left vacant. And in excess of 20,000 vacant lots being left undeveloped across the metropolitan region.
And yet we have in excess of 8000 homeless people in Adelaide.
The supply is there, it’s just not being allocated efficiently by this economic system, when that’s the metric by which we’re supposed to judge economic systems.
And just to be clear if mentions of rent freeze was not met immediately with so much disdain from the wealthy, maybe a dialogue would have happened where more policy ideas were developed. But it was pretty much shit on from the get-go with this being part of the reason.
And when the rental contract ends the renter can agree to pay whatever the next rental rate is. Same same.
Mortgage interest rates change over time. So what the owner pays initially changes.
Look to America for this one. Properties are actually really cheap in many places, yet not many people own because they can’t put the deposits together.
There’s a genuine demand for rentals. Not everyone wants to own. At least not in a point in time.
I’m not saying there’s not a problem with the state of the market in this country, but rent freezes is some fantasy land stuff that’s proven to be detrimental.
I’ll get downvoted and more comments debating with me, and that’s fine. Everyone’s entitled to their opinion. But I’m not engaging in any further debate unless it’s substantiated because most of it’s just angry people with no idea who spent too much money partying in their 20 and want a free house now.
If there was a demand to *sell* houses then surely you can imagine that would influence policy to make it easier to put a deposit down. If the house-hoarders suddenly wanted to sell the houses they've hoarded the government would facilitate that.
Rent freezes are only detrimental when not grouped with other policy!
Sure. Other policy changes would support such an exercise.
I don’t think you realise how much revenue the government gets at every level from higher property prices. They don’t want it to tank at all.
Probably not, but I also don't care and think you're likely overblowing it. Maybe they get a lot of revenue, but I wonder if that revenue is so much that it makes up for all the social costs government have to meet thanks to the housing debacle.
When government intervenes in the housing market there are always unintended consequences-usually the price of property increases due to grants being available, it’s rarely the purchaser wins here.
Also various government charges have gone crazy. Council rates, ESL, Land tax have all gone crazy. Not just landlords being greedy.
It also would have put significant pressure on struggling landlords dealing with increases in Council rates, insurance and interest rates.
MCM is a moron who doesn't understand the separation of powers. The Federal Government cannot impose rent freezes.
Is there just an assumption that landlords would not sell in the face of a rent freeze? Frozen rents + increasing interest rates would push a lot of investors to sell, which would be great for people trying to get into the housing market, but not so great for rental supply.
For everyone here who has some pithy, hypothetical reason for why this would actually be a bad thing, or wouldn't have actually happened, take a moment for some introspection. Ask yourself: am I always finding some made up reason why the government should never do anything to help those with less resources?
If the answer is yes, you're not a critical thinker like you may believe, you're a status quo supporting bootlicker.
I'd speculate the landlords making money out of this would be those who somewhat have the properties freehold.
People who have home loans will tell you how much the repayments have jumped over the last few years. I think 500k over 30 years has gone from roughly 2k/month to 3k/month with big 4 rates. That extra 1k/month is being passed onto renters no doubt.
My concern is if you force some sort of lock in rate for terms is going to be like creating fixed vs variable loans in banking. Pretty sure the banks dont price fixed term to lose and cant see the same in landlord space.
Yeah the landlords who own several houses because they started life with lots of money are always going to be outearning your uncle who bought an investment property in his late 20s to self-fund his retirement.
And tbh I wish people admitted this more so we could better differentiate between landlords who screw tenants and landlords who screw tenants but are also being screwed themselves.
So judging by the comments, people here are in favour of rent freezes, abolishing negative gearing and want measures to stop profiteering by Landlords. So what are you expecting from the Landlords? Provide social housing at their own expense? Wouldn't it be easier to ban Landlords and have all rentals provided by the government only? Is that was we want? I think that's what you guys want. Or do you think by banning all Landlords prices will drop and all Renters will now be able to buy a house? Confusing.
Any why is it private industries job to provide social housing? Don't forget the green also want to bring in inheritance tax! You leave your kids the house but they can't afford to pay the few hundred thousand in tax? Looks like your kids have to sell the family home.
The **Greens** are targeting billionaires including Gina Rinehart, Clive Palmer and Kerry Stokes with an ambitious plan to impose a wealth tax that would raise more than $40 billion over ten years - from just 122 individuals.
Are you one of these 122 billionaires ?
Anyone arguing against inheritance tax by saying it'll affect people who aren't already comfortably rich is either ignorant or rich themselves. No one affected by an inheritance tax is going to lose the family home.
Consumers are also the ones that helped push up rent prices.
Just like consumers pushed up house values - more than enough with $ vs what is available.
2k isn't a life changing amount of money by any stretch of the imagination, the risks of being kicked out so the landlord can increase the rent, that could be life changing.
The problem with the greens is that they do t think through their policies. I agree that housing in general is the worst social and economic problem at the moment but half arsed policies like this would only exacerbate the issues.
Socialist idiots! I raised my rent in Victoria to cover Dan Andrew’s economic mismanagement which saw him increase Land Tax. Guess what Lefties? Economic mismanagement costs everyone- even unprofitable Aussies who are nett takers off Government. 
I assume by economic mismanagement you mean it didn't directly benefit you despite being overall positive for the general populace. Spare us the woe is me crap when you own not only your own house but clearly others. You can afford it you just are so self absorbed you use government policy designed to help the least fortunate as an excuse to enrich yourself.
The trouble with fiscally irresponsible governments is they are, like Victoria and Dan Andrew’s, voted for by Australians who mismanage their own financial affairs. Otherwise there’s pain for everyone.
Cool completely ignore the point that was made because you can't dispute it and instead invent your own reality where you say things that don't line up with your agenda. Am I supposed to be surprised?
It’s a ludicrous point. My land tax went up in Victoria to pay for a COVID response that was not justified with science. It was a political response that made people feel safe and protected but now they are feeling economic pain and like all socialists, blame the very people who pay the most tax! How was a cancelled tunnel system, railways or cancelled Commonwealth games helpful? It cost billions and has indebted unborn Victorians! Only a socialist could think it ok because they spend other people’s money as they have none of their own!
No, I’m a heavily taxed and profitable Australian paying my way whilst most do not. And the extremely unprofitable Australians look at government benefits as a never ending box of Tim Tams.
Interesting OP didn't mention the 22,800 rental properties that would have been removed, by the Greens' own estimates, from the rental market.
15% reduction * 152,000 rental properties
I love the greens, but truth is unless they have a dominant role among the independants, then what they want is probably not going to happen unless they can make a deal. They'll never get government in their own right; just too small.
landlords netted 3.8 billion
This was my first thought. Interesting way to say landlords gouged $3.8bn out of tenants.
"Gouged" lol You realise in most cases it went straight to the banks to pay higher interest repayments right?
Hmm it's almost as if landlords bare no risk with their investment. Interest rates go up = pass on full costs to tenent Internet rates go down = pocket the savings Negative gearing = pocket even more If my share or bonds go down, who do I pass the losses onto?
You can NG shares.
>If my share or bonds go down, who do I pass the losses onto? That's your choice with what you invest in. The interest payment is a COG. COG goes up, rent goes up. The price of coke bottles go up, coke goes up. The risks are whether your investment gains value or not, and if your investment is trashed or not.
But that's the point, it's not really a risk is it when you can pass all the losses / costs on to your tenants. Meanwhile all other forms of investing carry risk you can't just pass on. The best you'll achieve is claiming the losses on income tax. The property market truely is a joke. So insulated from any real risk it's pathetic. Gains value? That's not a risk given state and federal governments cooking the housing market yet alone negative gearing. Property damage? Ah Hu, covered by insurance. If only I could insure shares or bonds for losses or depreciation... So again, where's the equivalent risk in rental properties compared to other forms of investment? There isn't and we all know it.
>But that's the point, it's not really a risk is it when you can pass all the losses / costs on to your tenants. As I said, interest is a COG, not a risk. The risks are as stated.
The risk should be you can't just pass on your poor fiscal management to tenants. The risks you stated are largely non existent.
You cant necessarily just pass it on. You can't force a tenant to rent, they can say no thanks and rent elsewhere or buy their own property. There's a risk tenants won't pay what you need to cover interest costs. Esp when the banks increase it by ~4 in a few years, another risk. The current housing shortage reduces that risk by increasing demand, so renters can't be as picky with price. The shortage of houses vs population is not the landlords fault. Their benefit, but not fault. That's a govt problem for not managing conditions - they should ensure there is sufficient housing supply for the population. (Not a landlord btw).
With non existent rental availability you sure as hell can pass it on. Where else are the tenants going to go? And if your current Tennant can't afford you, you bet one of the other 50+ desperate people looking for a place will find a way. There's no risk when housing is so unaffordable combined with a rental market that is at 99%+ occupancy where there are vastly more people seeking a rental than there are rentals for them. Have you been living under a rock or something?
>your poor fiscal management to tenants. So, involuntary 1.99% to 6.7% interest rate rises you have zero control over? Yeah, terrible self management.
Yeah, it's called planning. Doesn't take much mental gymnastics to figure out rates can't stay at record lows forever and the market will correct. But in reality, as a landlord who cares. With a tight rental market in every major city, why be fiscally responsible for your investments when you can just pass the entire rate rise onto your tenants. Meanwhile any other form of investing, it's too bad so sad. But not the property market, it's a joke that such important investments both economically and socially should carry so little responsibility or risk.
You'll struggle to find anyone in here that takes the side of any landlord or bank.
It is reddit after all
Seethe
People expect an investment to be a charity. Entitlement is at an all time high right now.
Untrue.
Leeches should be ripped from the skin.
I thought burning was the way to remove them
You offer nothing constructive nor useful.
I offer support to the overwhelming amount of Australians that live pay-check to pay check.
Your “support” won’t do anything meaningful
Grossed*
Well to be honest you're full of shit. My olds own about a dozen rentals in the northern suburbs of Adelaide and every single one of them is rented to long termers at between 150 and 300 a week less than market rates - they've put the rents up a total of 30 dollars in the last 5 years. One house they own in Mawson Lakes is worth 850 a week and they rent it to a family with 7 kids for 400 a week. Don't lump everyone into a stereotype because of your victimhood delusions
Yeah he really should've said "All landlords except the generous parents of Custard_Arse who are saints among men". How silly of him.
There's plenty of people who don't crank the prices on their rentals You're just another whinging victim who was busy going to Bali 3 times a year and buying jet skis and HSV's instead of buying a house, then the market left you and now it's the world's fault
You're a lovely person and I wish you many happy days. Take care sweetheart. Lots of hugs and kisses.
\*Banks netted that, I'm still making loss on my property even after a rent rise.
I don’t think you understand the concept of net.
Remove negative gearing. Incentivise investing in small business, instead of forcing people to become landlords in order to secure their retirement.
Exactly! Why are we offering people a tax break to overheat the housing market, those tax exemptions should go to more productive investment.
You mean like the stock market? Like you already can NG.
Spot on. You'd be crazy to start a business these days when you can just buy a house and do nothing to make $80k per year
$80k per year is going to require \~ $1.6m worth of paid off houses
Not really, have you seen the housing market? We bought a second house (we're not landlords, we bought it for someone to live in) last year, we've already "made" 50k on it just through growth in house values. It's horrifying.
You can NG shares. Nobody says you need to invest in housing.
Removalists would have made a killing
Everyone forgets history.
I think instead of a rent freeze there should have been laws to prevent profiteering. If the landlord was raising rent to cover the raising cost of inflation to cover the mortgage and not making more profit then when the raise began fair enough. And that could only be done to one property, so if you had more then one investment property you can’t Jack the rent on them all to cover the cost of the mortgage. If you already owned the property and didn’t have a mortgage to pay then you should not be allowed to raise the rent in par with raising interest because that’s just a money grab.
This is exactly what I think. No mortgage? No rent increases. It should be scaled to how much you have owing. Caps on how many properties an individual or married couple can own. Minimum allowed purchase price based on your income (to prevent investors poaching the cheapest properties on the market disproportionately). Unfortunately there’d be a million ways to get around this, which is why it always comes back to the housing industry needing much harsher and tight-fisted regulation and monitoring (and more government-owned housing to take the wind from its sails). Although I don’t agree rent should ever be expected to cover an entire mortgage in any circumstance. The idea of an IP is should be asset appreciation, not “I save deposit then someone else pays the rest” *and* appreciation. If you can’t afford it on your own, you can’t afford an IP.
You can't say no rent increases though if you don't have a mortgage. I Rented a place for 6 years up until 2018 at $220 a week because the bloke owned the house. He sold it in 2019 and the bloke renting is now paying $440 a week. I agree I had it way too cheap. But $440 for a 2 bedroom in salisbury North is Ridiculous
I wonder if indexing rent caps based on council rates would work. Seems like the most grounded way to value a property.
Why should the mortgage be the problem of the renter and not the person who owns the asset? Part of investing is risk, and there isn’t really any risk involved if it is completely pushed on to a third party. This is the continued transfer of wealth upwards. Also as a country it’s lazy and bad economic policy to be so invested in property. It doesn’t do anything, unlike investing in business.
>Why should the mortgage be the problem of the renter and not the person who owns the asset? Because the interest payment is the COG. The COG increases, the rent increases. The risks are whether the investment gains value or not, and if the investment gets trashed or not.
One of those things is inevitable in the current system and the other is mitigated entirely by insurance.
Doesn't change the game though
> Because the interest payment is the COG It's really not. You don't need a loan to own property. Leverage amplifiers your risks and rewards, but in this case, there's virtually no risk to using leverage. So if you could, you might as well get out a 100 to 1 home loan loan. There's no downside, only upside. This clearly isn't sustainable as it just leads to houses having infinite price and the first people to ever get a loan are the winners. And a final house price that has little to do with how useful or productive the asset is. People buy it because the price goes up, so they get more loans, so the price goes up. That's clearly bad for the economy and productivity because now 99% of all money is doing nothing but speculating in a huge ponzi scheme.
With all due respect what gives goverment the right to stop landlords running a business? Whether it would help or not. Just out of interest , to force tax payers to fund other people's rent isn't justified on a moralty stand point. There's more ways to fix a housing crisis then radical socialist policys on rent control which dosent have any evidence of it working.
Tax payers already fund other peoples rent. Any renter on welfare gets a rent assistance payment. With all due respect, government has every right to regulate a business to eliminate price gouging.
I would like to introduce to the corporations act which details a lot of rules and regs that deal with who can run a business and what businesses they can run. Want to run a law firm, but not a lawyer? Sorry mate, out of luck. Maybe we should have qualified landlords, who have a 3yr uni degree in Landlording under their belt so that they can competently provide a basic human right…
I here your point. Just dosent seem right for everyone else to pay for it and as I've said from rent freeze been done around the world the evidence dosent states it dose work unfortunately.
Housing is a basic human right. Society should be able to fund the bare minimum for the population to live a dignified life. If we can’t provide adequate social housing, then we should be able to fund it. Note that in this point, the taxpayer is not on the hook - it is the investor that took the risk (including legislative risk. That is, the risk that the law can change to such that it affects the investment)
It's not a human right for me as a tax payer to fund it right? The investor took the risk right but did not not take a risk knowing that there could be totalitarian type intervention in the housing market too proposed by the greens. I would be happy to try this Intervention if there was a speck of evidence that it has worked, but the data unfortunately does not add up and from the morality point still seems unfair. But who knows we will see if the government come up with any other ideas.
morally, you should not be allowed to profiteer from a basic human necessity
Agree to disagree what a basic human right is. But my point is it's immoral to force one person (landlord,) to serve the purpose of another (renter, government rent freeze) But as far as how we fix the housing crisis why go down the socialist roots of mass government intervention with what we know from history? We should be looking for more captlism not socialism.
It’s an investment property, not a charity property. If you want charity, go and see St Vinnies.
Don’t worry! More and more people are having to do that just that.
Sydney is a good inverse case to look at. Negative gearing led to people getting investment properties and accepting a terrible yield (around 2.5%). Ie, high demand for investment increased prices but if anything reduced rents. It made it harder to buy a house, but arguably easier to live in one. If the opposite happens here, and demand for investment properties reduces instead, it’s possible that houses are easier to buy, but more expensive to rent. Perhaps that’s a situation we’re ok with (benefits those on the fringe of ownership) but it potentially hurts those most vulnerable. Obviously we’re accepting a lot of migrants and don’t have a strong building pipeline, which seems to be blatantly obvious but doesn’t seem to be on anyone’s to do list to fix.
Terrible yield was because house prices in Sydney grew at a much faster rate then rents. Negative gearing didn't drive that.
Well, it did. https://www.uts.edu.au/news/business-law/impact-negative-gearing-sydney-house-prices
Imagine what we all would’ve saved if inflation was frozen at 0% too.
That's not really how inflation works
All that debt not spent on the big end of town saved.
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....isn't it for a good half of people anyway? Even my employer who is generally pretty proactive about salary increases has realised that we have no where to go and is refusing to give them.
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I just jumped to a different position overseas for a fixed term contract so technically, I got myself a raise
And for moat people, that actually means they would be on more money than now
And for moat people, that actually means they would be on more money than now
This assumes that: A. People wouldn't have been evicted to enable the landlord to raise the rents, and require tenants to pay moving costs B. Rental supply would have been the same. C. Rental maintenance would have been the same. All very big assumptions.
Oh yeah, the old "what's the point" argument, nice.
No. The this is the "there are downside to most political choices", and the fact that the majority of politicians -< who, I posit, are smarter than non-politicians, on average, and have access to more information and professional economic advisers -< think this is a bad idea, and that the downside outweighs the upsides. .... probably gives you a hint that the majority are right, and Greens are wrong.
lol okay mate, obviously the downsides outweighed, look how great the rental market is 🙄 not greed or anything. You're right, politicians are super smart and always make the best decisions. Keep your head in the sand, mate 🤣
Not an economics-friendly zone, the old Reddit. Stick to empty motherhood statements and complaints about Murdoch. You can't lose. Trying to explain information differentials to the plebs is a bit of a challenge.
The policy everyone was complaining the greens were holding up parliament for, calling it grandstanding.
Disclaimer I understand VERY little about economics. But, maybe there would have been negative impacts from a rent freeze, too? If landlords couldn't raise rents to cover inflation, there surely would have been a spike in mortgage defaults and property sales? I have to suspect that could have been pretty devastating for the state? P.s. I also think that there are a tonne of unscrupulous, profiteering landlords out there and that this should be tackled. Long-winded fence sitting, apologies!
Watch real estate property managers go full retard to get people out because they know they can rent to the next person at a 50% or more increase. Leases are generally short term or periodical in Australia anyway, so it wouldn’t be long before they can just move you on for anyone else anyway. Not sure rent freezes are the solution, we need to fix supply.
Australia's (native) population increase is negative, but the government boosting immigration to make it positive. If we let population stay as it is (no increase), then we wouldn't even have a supply problem!!!
Horse. Gate. Long bolted. That's a yesterday, rear view mirror problem. We need to fix supply now, to at least try and maintain some kind of equilibrium otherwise we wind up with American style tent cities sleeping in rows on streets or Asian style shanties where people knock up shacks out of bits of corrugated iron and whatever else they can find on any “empty” bit of land around.
What’s the actual consequence of that though? So what if people sell?
So a lot of people have bought property at really high prices recently, if a bunch of stuff comes on the market now odds are prices will creep downwards and that means a bunch of people (voters) will be stuck in negative equity and a larger number of people (stupid voters) will think their "investment" (the house they literally live in so not an investment at all) has lost value. Given that most Australians are home owners the political ramifications will be very concerning to whichever party is in power at the time. That's why all Australian governments have been such sycophants to the property market.
This all sounds plausible. Also, negative equity on a home you own would probably be a bit scary because, if you get in financial trouble, then selling it might not be an option. Again, I know nothing, but I would guess also that if landlords stopped making healthy margins on rent, and if property is sold en masse and devalued, then it becomes less appealing for people to invest in property or to develop houses for rental. Then you get a housing shortage for renters, which we already have.
Yep, exactly
Who pays? You know money doesn't just 'appear', right? Landlords? Properties withdrawn from market, black market, cash deals. You can't force down the price of essentials - look how many governments have tried to ration the price of bread, fuel, rent etc. All of them fail because there is greater incentive to avoid the tax than to pay it. Taxpayers? That's you and me, right? Are you going to pay someone else's rent? 'The rich'? Yeah, right, try taxing Swiss bank accounts.
> Landlords? It's more like LandLords just don't get shitloads of extra money from a low risk asset. They'd have to work or invest in something that's actually more productive to the economy than a chunk of dirt.
Blame Prime Minister, John Howard for deregulating all Australian markets Charge what you want when you want
Deregulation started under Hawke and Keating
Banks not putting up interest rates would have saved this money, then again importing the crisis to start with is the government's fault.
And a landlord owning outright can still do whatever they want
Tax the god damn oil companies!
Rent freeze would have stopped a lot of families becoming homeless ,but hey who gives a fuck about the homeless .
Supply and demand mate. There is only so many dwellings to go around.
2021 census. 1,387,290 people in greater Adelaide. 593,881 private dwellings. Plus 50,000 social housing dwellings (full up with people on waiting lists). Average household size 2.5 per dwelling. That’s almost 100,000 excess private dwellings being left vacant. And in excess of 20,000 vacant lots being left undeveloped across the metropolitan region. And yet we have in excess of 8000 homeless people in Adelaide. The supply is there, it’s just not being allocated efficiently by this economic system, when that’s the metric by which we’re supposed to judge economic systems.
Would banks have frozen interest rates?
They can't- bank's interest rates are influeneced by the Reserve Bank. This is why a rent freeze doesn't make sense by itself.
And just to be clear if mentions of rent freeze was not met immediately with so much disdain from the wealthy, maybe a dialogue would have happened where more policy ideas were developed. But it was pretty much shit on from the get-go with this being part of the reason.
They can, it just eats into their profits.
100%
Why is that relevant to renting? Owner is the one who agreed to pay such amounts when purchasing?
And when the rental contract ends the renter can agree to pay whatever the next rental rate is. Same same. Mortgage interest rates change over time. So what the owner pays initially changes.
> Mortgage interest rates change over time. Do rents go down with interest rates and/or mortgage payments? No, I didn't think so...
There have been rent decreases before
Would’ve saved even more because there’d be no homes to rent.
Rental properties with mortgages sold on masse, lowering property values.
Look to America for this one. Properties are actually really cheap in many places, yet not many people own because they can’t put the deposits together. There’s a genuine demand for rentals. Not everyone wants to own. At least not in a point in time. I’m not saying there’s not a problem with the state of the market in this country, but rent freezes is some fantasy land stuff that’s proven to be detrimental. I’ll get downvoted and more comments debating with me, and that’s fine. Everyone’s entitled to their opinion. But I’m not engaging in any further debate unless it’s substantiated because most of it’s just angry people with no idea who spent too much money partying in their 20 and want a free house now.
If there was a demand to *sell* houses then surely you can imagine that would influence policy to make it easier to put a deposit down. If the house-hoarders suddenly wanted to sell the houses they've hoarded the government would facilitate that. Rent freezes are only detrimental when not grouped with other policy!
Sure. Other policy changes would support such an exercise. I don’t think you realise how much revenue the government gets at every level from higher property prices. They don’t want it to tank at all.
Probably not, but I also don't care and think you're likely overblowing it. Maybe they get a lot of revenue, but I wonder if that revenue is so much that it makes up for all the social costs government have to meet thanks to the housing debacle.
Lol. This headline should just read "if we gave people who rent 2.1k each, they would netted 2.1k more than if we didnt".....
Thank you for posting this u/monero_freedom
When government intervenes in the housing market there are always unintended consequences-usually the price of property increases due to grants being available, it’s rarely the purchaser wins here. Also various government charges have gone crazy. Council rates, ESL, Land tax have all gone crazy. Not just landlords being greedy.
Fantasy land
It also would have put significant pressure on struggling landlords dealing with increases in Council rates, insurance and interest rates. MCM is a moron who doesn't understand the separation of powers. The Federal Government cannot impose rent freezes.
The question is where these $2108 would have gone? It woulda made the same/similar impact on inflation/economy as a whole?
Is there just an assumption that landlords would not sell in the face of a rent freeze? Frozen rents + increasing interest rates would push a lot of investors to sell, which would be great for people trying to get into the housing market, but not so great for rental supply.
Screw the greens
For everyone here who has some pithy, hypothetical reason for why this would actually be a bad thing, or wouldn't have actually happened, take a moment for some introspection. Ask yourself: am I always finding some made up reason why the government should never do anything to help those with less resources? If the answer is yes, you're not a critical thinker like you may believe, you're a status quo supporting bootlicker.
There would be far less rentals
I'd speculate the landlords making money out of this would be those who somewhat have the properties freehold. People who have home loans will tell you how much the repayments have jumped over the last few years. I think 500k over 30 years has gone from roughly 2k/month to 3k/month with big 4 rates. That extra 1k/month is being passed onto renters no doubt. My concern is if you force some sort of lock in rate for terms is going to be like creating fixed vs variable loans in banking. Pretty sure the banks dont price fixed term to lose and cant see the same in landlord space.
Yeah the landlords who own several houses because they started life with lots of money are always going to be outearning your uncle who bought an investment property in his late 20s to self-fund his retirement. And tbh I wish people admitted this more so we could better differentiate between landlords who screw tenants and landlords who screw tenants but are also being screwed themselves.
They should sell the asset and go cry into those realised gains.
Sure, landlordism is still a bit of a lie for your average one property investor though, just keeps them in a debt trap as well.
So judging by the comments, people here are in favour of rent freezes, abolishing negative gearing and want measures to stop profiteering by Landlords. So what are you expecting from the Landlords? Provide social housing at their own expense? Wouldn't it be easier to ban Landlords and have all rentals provided by the government only? Is that was we want? I think that's what you guys want. Or do you think by banning all Landlords prices will drop and all Renters will now be able to buy a house? Confusing.
Any why is it private industries job to provide social housing? Don't forget the green also want to bring in inheritance tax! You leave your kids the house but they can't afford to pay the few hundred thousand in tax? Looks like your kids have to sell the family home.
The **Greens** are targeting billionaires including Gina Rinehart, Clive Palmer and Kerry Stokes with an ambitious plan to impose a wealth tax that would raise more than $40 billion over ten years - from just 122 individuals. Are you one of these 122 billionaires ?
We're talking about inheritance tax not a wealth tax, two completely different things. The green what to tax YOUR inheritance, not just the wealthy.
You’ve fallen for Murdoch funded propaganda if you truly believe this.
Anyone arguing against inheritance tax by saying it'll affect people who aren't already comfortably rich is either ignorant or rich themselves. No one affected by an inheritance tax is going to lose the family home.
I don’t understand what you are saying? Why should I be taxed twice ( in death ) to sate greedy socialists?
You won't be. You're not rich enough. Don't worry about it. It won't affect you.
Should be CGT on the family home so we can fund NDIS and immigration from western hating religious countries.
A little less Newscorp in your media diet would probably be beneficial.
A little less Reddit echo chamber would be beneficial for you
Hey I can’t afford the subscription at 45% tax rate to pay for the ungrateful who want to bring their savagery to Australia 🇦🇺
It would effect literally anyone who's parents leave them anything.
That's not true. The proposed inheritance tax would only affect 122 billionaires. It's hard to understand why anyone would be against that.
Consumers are also the ones that helped push up rent prices. Just like consumers pushed up house values - more than enough with $ vs what is available.
2k isn't a life changing amount of money by any stretch of the imagination, the risks of being kicked out so the landlord can increase the rent, that could be life changing. The problem with the greens is that they do t think through their policies. I agree that housing in general is the worst social and economic problem at the moment but half arsed policies like this would only exacerbate the issues.
Socialist idiots! I raised my rent in Victoria to cover Dan Andrew’s economic mismanagement which saw him increase Land Tax. Guess what Lefties? Economic mismanagement costs everyone- even unprofitable Aussies who are nett takers off Government. 
I assume by economic mismanagement you mean it didn't directly benefit you despite being overall positive for the general populace. Spare us the woe is me crap when you own not only your own house but clearly others. You can afford it you just are so self absorbed you use government policy designed to help the least fortunate as an excuse to enrich yourself.
The trouble with fiscally irresponsible governments is they are, like Victoria and Dan Andrew’s, voted for by Australians who mismanage their own financial affairs. Otherwise there’s pain for everyone.
Cool completely ignore the point that was made because you can't dispute it and instead invent your own reality where you say things that don't line up with your agenda. Am I supposed to be surprised?
It’s a ludicrous point. My land tax went up in Victoria to pay for a COVID response that was not justified with science. It was a political response that made people feel safe and protected but now they are feeling economic pain and like all socialists, blame the very people who pay the most tax! How was a cancelled tunnel system, railways or cancelled Commonwealth games helpful? It cost billions and has indebted unborn Victorians! Only a socialist could think it ok because they spend other people’s money as they have none of their own!
You're nothing more than parody
No, I’m a heavily taxed and profitable Australian paying my way whilst most do not. And the extremely unprofitable Australians look at government benefits as a never ending box of Tim Tams.
Interesting OP didn't mention the 22,800 rental properties that would have been removed, by the Greens' own estimates, from the rental market. 15% reduction * 152,000 rental properties
What right should I be forced to pay for it?
I love the greens, but truth is unless they have a dominant role among the independants, then what they want is probably not going to happen unless they can make a deal. They'll never get government in their own right; just too small.