The Politics Thread 2024

[gerg]

The discontent continues to grow with high immigration in a broken housing market.

Don’t think it matters that it’s catching up COVID years. We didn’t build the infrastructure in those years either.

Think this is the biggest risk to Labor re-election.

I think the immigration lever is the low hanging fruit which the government can pull to send a signal and it may have a modest impact.

But really, the issues with our housing market are multidimensional and it would be super disingenuous to pretend (not saying you are necessarily) that a temporary increase in immigration intake is the source of all our woes. Woes which are now rightly viewed as an intergenerational equity issue.

People who laud the man really won’t want to hear it, but the one dude who really boned the country in terms of housing affordability and generational equity was John Winston Howard.

Pretty much the moment his government made the CGT changes in 1999 the house prices line on the graph said adios to the income line on the graph, and it has been getting aggressively worse over time.

There are of course other compounding factors such as successive governments refusal to meaningfully invest in social and affordable housing supply. But yeah, look no further than 1999 for the seminal moment in the current crisis.

Unless there is a shift in the way we view housing, and by that I mean primarily as a means for people to have a roof over their head rather than being viewed primarily as an investment class, I can’t see much changing .

I think making any significant changes in the 'housing topic' gives both sides of parliament the jitters. It's claimed the only reason Shorten lost the election was due to his proposed changes to negative gearing? Whether this is true or whether the voting public just didn't like the prospect of him as a leader is difficult to gauge.

It's become a similar issue to a carbon tax / climate change policy in that both sides think it could destroy their election campaigns so they tiptoe around it and fix nothing. And nobody that owns property wants to see their biggest asset drop in value.

I do think the issues are a little overstated. Young people should just be encouraged to buy into the market at the bottom level, work hard and work their way up. It's what everybody else has done. Too much emphasis on younger professionals looking at that inner city apartment and complaining about it being out of reach. Okay, go and find something within reach and work towards your goal over time. Millennials comparing their housing issues to a boomer who is 30 to 40 years past that point. It's a little over the top IMO. It is hard no doubt. Housing is expensive but start low and build your equity.

If it's important to you then skip those overseas holidays, new cars, new iPhones every year, and the smashed avo on toast on a Sunday morning at the trendy Cafe. I know it's a generalisation but my younger brother has done more overseas travel in his late teens than I did by a long shot.

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[gangrenous]

Gerg you deadset boomer. Forego avo toast for a year and you’ll have like $1000, in that time the house you wanted went up $15k if you’re lucky.

Housing as a multiple of income is significantly higher, home ownership rates are dropping, far more people require parental assistance and dual incomes to own property.

Let’s cut the gaslighting on “people just need to sacrifice”.

[T_R]

Gerg you deadset boomer. Forego avo toast for a year and you’ll have like $1000, in that time the house you wanted went up $15k if you’re lucky.

Housing as a multiple of income is significantly higher, home ownership rates are dropping, far more people require parental assistance and dual incomes to own property.

Let’s cut the gaslighting on “people just need to sacrifice”.

I think his list was a bit longer than just the avocado on toast

[gerg]

Gerg you deadset boomer. Forego avo toast for a year and you’ll have like $1000, in that time the house you wanted went up $15k if you’re lucky.

Housing as a multiple of income is significantly higher, home ownership rates are dropping, far more people require parental assistance and dual incomes to own property.

Let’s cut the gaslighting on “people just need to sacrifice”.

I'm not a boomer. I'm x.

Like I said it's a generalisation and shouldn't be taken out of context in isolation - making sacrifices isn't just about removing the smashed avo from your weekly schedule. If you make ALL of the sacrifices I suggested, and more (like buying coffee and/or lunch at work everyday, reducing your costs in other ways) you can save money. That's like $20 a day.

Instead we have a portion (not all of course) of the younger population who just throw their hands in the air and complain about how hard it is and then continue with their frivolous spending habits. Statistics show that people are living with their parents for longer than previous generations. If they can't save a bucket load of money while living under their parents roof then that's a problem that they need to deal with, not the rest of the population.

For the record I bought into the property market in 2011 so it's not as though I bought a 90k property which is now worth a million. I understand the struggles and sacrifices.

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[gangrenous]

Your attitude was that of a boomer, not your age.

The point is people have always sacrificed to get into housing. It’s much harder now. Telling everyone just to sacrifice harder because it’s still possible if you pretty much don’t live for years is like telling people who experience racism that they should be working harder, because you know people who have worked hard enough to overcome their disadvantage.

Not that I’m equating saving to suffering racism. I’m saying focussing on how others can overcome the problem instead of fixing the damn problem is the analogy here.

Even the solution of spending more time at home speaks to another case of entrenching inequality between those who have that support.

[gerg]

Your attitude was that of a boomer, not your age.

The point is people have always sacrificed to get into housing. It’s much harder now. Telling everyone just to sacrifice harder because it’s still possible if you pretty much don’t live for years is like telling people who experience racism that they should be working harder, because you know people who have worked hard enough to overcome their disadvantage.

Not that I’m equating saving to suffering racism. I’m saying focussing on how others can overcome the problem instead of fixing the damn problem is the analogy here.

Even the solution of spending more time at home speaks to another case of entrenching inequality between those who have that support.

Do you own your own home or are you renting?

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[gangrenous]

Play the ball gerg

[gerg]

It's a relevant question. I own my own place (partly with a bank if I'm being honest) and I've worked bloody hard to pay it off. Would I be happy to see it drop in value? Heck no. What other solution do you see to this issue other than the price of houses dropping? I used to laugh at all the moms and dads hand wringing about how their children cannot afford to buy into the market. Well if it truly is that important to you then sell your house to your children at half it's value.

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[gangrenous]

If you can make the argument, you don’t need to know my position.

Hypocritically you’re then arguing from a point of your own personal situation (selfishly in my opinion). You’ve got yours so screw everyone after you?

House prices could stay still and that’d help for a start. You don’t need to lose any value. Chances are your place has significantly increased in value since 2011 - your hard work still gives you your home to live in that you own. Be nice if it did that for the younger generation also.

[gerg]

Go on and sell your own property at a loss then to a younger person. Stand up for what you truly believe in. You can call me selfish or a hypocrite all you want but nobody that owns property is selling their property for less than its worth. Nobody, not even you up on your high horse.

Edit... would be nice if young people profit from property comment... prices go up and continue to go up so as soon as that young person gets their foot in the door it becomes a good, growing asset. Hence my earlier comments about buying a cheaper property and getting equity before you're in a position to upgrade. Just like every other person in history has done.

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[gangrenous]

You’re better than this gerg.

No one is saying you need to go out and sell your home at a loss.

Wind back investor advantages, get rid of the ridiculous heat in a market for a human necessity. People can do their investing in something where the capital is value add. There’s still huge demand - you’re not crashing the market here. Just shifting the balance back to more owner occupiers and trying to stop over the top growth in prices.

Housing has been increasing faster than inflation and it’s not sustainable. We’re developing a more and more inequitable split between haves and have nots.

The situation is not the same as it has been in the past. Telling people to just get in and do it as those before them is a **** cop out.

[gerg]

You’re better than this gerg.

No one is saying you need to go out and sell your home at a loss.

Wind back investor advantages, get rid of the ridiculous heat in a market for a human necessity. People can do their investing in something where the capital is value add. There’s still huge demand - you’re not crashing the market here. Just shifting the balance back to more owner occupiers and trying to stop over the top growth in prices.

Housing has been increasing faster than inflation and it’s not sustainable. We’re developing a more and more inequitable split between haves and have nots.

The situation is not the same as it has been in the past. Telling people to just get in and do it as those before them is a **** cop out.

Yes, I'm not the problem with the market, as someone who is inching there way up the property ladder to provide a home for my family. The problem is that group with multiple investment properties. Fleecing renters then fleecing other Australian taxpayers with their negative gearing bs.

However, what you want is a double edged sword. The heart of the problem is ultimately the price of property. Whatever strategy is implemented to reduce the price can negatively effect younger buyers actually. Becomes a bit of an issue for a young, professional couple who have borrowed close to a million dollars to get into the Sydney property market for the market to suddenly bottom out. If the value of their home drops well below their mortgage they're in a bit of trouble.

Added to this if a whole bunch of investors abandon the market for more owner occupiers then the renters are **** out of luck as supply dries up. I don't hear much from the politicians at the moment on building social housing to help out?

I didn't think the market had done much in the past 2 years. There was a drop and then a rebound but the market is still nervous with current interest rates. Canberra prices still seem a bit below where they were 3 years ago?

Doing it the way those before is not a cop-out. If you think that people don't need to make sacrifices in their lives to buy a property you're living in fantasy land.

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[gangrenous]

Yes, I'm not the problem with the market, as someone who is inching there way up the property ladder to provide a home for my family. The problem is that group with multiple investment properties. Fleecing renters then fleecing other Australian taxpayers with their negative gearing bs.

No one said you owning your home was a problem. You acknowledge again there is a problem, I just took issue with narrative that detracts from solving it to go out and victim blame.

However, what you want is a double edged sword. The heart of the problem is ultimately the price of property. Whatever strategy is implemented to reduce the price can negatively effect younger buyers actually. Becomes a bit of an issue for a young, professional couple who have borrowed close to a million dollars to get into the Sydney property market for the market to suddenly bottom out. If the value of their home drops well below their mortgage they're in a bit of trouble.

You’re playing this like it’s going to crash the market. Given the underlying demand for housing this seems to be jumping at shadows.

Added to this if a whole bunch of investors abandon the market for more owner occupiers then the renters are **** out of luck as supply dries up. I don't hear much from the politicians at the moment on building social housing to help out?

I don’t think this is a problem:
1. An owner occupier replacing an investor is also one less renter. The net change on demand for rentals is 0. All you did was take the price competition out of the home purchase.
2. Leave investor incentives on new builds that meet code. You’d probably increase supply with that change by focussing investment on new supply.

I didn't think the market had done much in the past 2 years. There was a drop and then a rebound but the market is still nervous with current interest rates. Canberra prices still seem a bit below where they were 3 years ago?

Don’t know that’s true. Very much doubt it is across Australia from what I’ve read.

Doing it the way those before is not a cop-out. If you think that people don't need to make sacrifices in their lives to buy a property you're living in fantasy land.

Back to a ridiculous straw man. No one is saying people don’t have to make sacrifices. What I am saying is people shouldn’t have to sacrifice significantly more in their younger years and delay their life compared to previous generations, while we incentivise investors to make this worse.

[Mr Squiggle]

Labor won't unwind demonstrably inefficient and ineffective housing and taxation policies at the State and Territory or Federal level because the Labor party is an entirely owned subsidiary of its donors. Ditto the Libs, Nats and anyone else in parliament funded by vested interests.

At best they will sell inaction according to the politics of whichever target group they are attempting to influence at the time.

[greeneyed]

Why would you distort the tax system and investment decisions to favour owner occupiers of housing?

[gangrenous]

Labor won't unwind demonstrably inefficient and ineffective housing and taxation policies at the State and Territory or Federal level because the Labor party is an entirely owned subsidiary of its donors. Ditto the Libs, Nats and anyone else in parliament funded by vested interests.

At best they will sell inaction according to the politics of whichever target group they are attempting to influence at the time.

2019 suggests otherwise

[gangrenous]

Why would you distort the tax system and investment decisions to favour owner occupiers of housing?

Because shelter is a basic human need.

Because it’s more cost effective for us to have wealth spread with individuals investing in their own property for their retirement and needing less support. As opposed to having to fund those people who have been eternal renters now needing support and the wealth having been concentrated in fewer people.

Because it simplifies overhead and maintenance if people own and care for their own property.

Because of better social engagement with people able to put down roots in their community.

[greeneyed]

Distributional issues are best addressed through distributional policies. Favouring owner occupiers through extra tax distortions doesn’t increase housing supply or affordability; the biggest issue there is inappropriate planning policies of State and local governments. It’s always best to ensure the tax system is as neutral as possible for investment decisions. Many other countries have higher proportions of housing renters than Australia. And there are advantages in renting for many people, eg those who need to be mobile for employment opportunities. Bottom line is, it’s best to find the fundamental problems which make markets not work as well as they should. The answer is not in tax, it’s in State and local regulations.

[gangrenous]

Distributional issues are best addressed through distributional policies. Favouring owner occupiers through extra tax distortions doesn’t increase housing supply or affordability;

Why not? If you reduce the attractiveness of investing in existing property, why wouldn’t that improve affordability?

If you keep the same incentives and only allow them on new housing, would that not shift some positive pressure to supply?

the biggest issue there is inappropriate planning policies of State and local governments. It’s always best to ensure the tax system is as neutral as possible for investment decisions.

Fixing planning and supply is no quick fix. Why not suppress new demand from investors? What is the value they’re adding in purchasing existing housing?

Many other countries have higher proportions of housing renters than Australia. And there are advantages in renting for many people, eg those who need to be mobile for employment opportunities.

There are many more guns in America. Surely this argument needs to come with something that shows that’s a good thing?

Of course there are reasons why people do want to rent, we don’t need to drive renting to 0. But clearly the balance has shifted compared to historical levels and the younger generations are screaming for the opportunity to buy not rent.

Bottom line is, it’s best to find the fundamental problems which make markets not work as well as they should. The answer is not in tax, it’s in State and local regulations.

Let’s hear the short term fix then - because as I see it we’ve stuffed the market in making it more attractive for people to own multiple homes to the detriment of others. So I’m really keen for practical solutions rather than pat ourselves on the back for our ideological purity.

The market will never appropriately price in the societal value that owning your home brings. So in my view that can only come with government interference to advocate for that in the market.

[greeneyed]

Why wouldn’t the market appropriately price in the value that owning your own home brings? If it’s of value to the individuals they’ll express that through their choices and financial decisions. Switzerland has twice the proportion of housing renters than in Australia and their society seems to work fine. The biggest barrier to affordability in Australia is supply, a supply fix is needed. If you don’t address the fundamental problems, you’re just reducing the efficiency of the economy and the long term growth in living standards overall. You’re just handicapping the country even more by distorting the tax system even more. There is no quick fix, certainly the answer is not in the tax system (apart from making sure it’s as neutral as possible).

[gerg]

Yes, I'm not the problem with the market, as someone who is inching there way up the property ladder to provide a home for my family. The problem is that group with multiple investment properties. Fleecing renters then fleecing other Australian taxpayers with their negative gearing bs.

No one said you owning your home was a problem. You acknowledge again there is a problem, I just took issue with narrative that detracts from solving it to go out and victim blame.

However, what you want is a double edged sword. The heart of the problem is ultimately the price of property. Whatever strategy is implemented to reduce the price can negatively effect younger buyers actually. Becomes a bit of an issue for a young, professional couple who have borrowed close to a million dollars to get into the Sydney property market for the market to suddenly bottom out. If the value of their home drops well below their mortgage they're in a bit of trouble.

You’re playing this like it’s going to crash the market. Given the underlying demand for housing this seems to be jumping at shadows.

Added to this if a whole bunch of investors abandon the market for more owner occupiers then the renters are **** out of luck as supply dries up. I don't hear much from the politicians at the moment on building social housing to help out?

I don’t think this is a problem:
1. An owner occupier replacing an investor is also one less renter. The net change on demand for rentals is 0. All you did was take the price competition out of the home purchase.
2. Leave investor incentives on new builds that meet code. You’d probably increase supply with that change by focussing investment on new supply.

I didn't think the market had done much in the past 2 years. There was a drop and then a rebound but the market is still nervous with current interest rates. Canberra prices still seem a bit below where they were 3 years ago?

Don’t know that’s true. Very much doubt it is across Australia from what I’ve read.

Doing it the way those before is not a cop-out. If you think that people don't need to make sacrifices in their lives to buy a property you're living in fantasy land.

Back to a ridiculous straw man. No one is saying people don’t have to make sacrifices. What I am saying is people shouldn’t have to sacrifice significantly more in their younger years and delay their life compared to previous generations, while we incentivise investors to make this worse.

All my comments on this topic are based on the younger generation complaining that they've been priced out of the market and these same comments have been pretty consistent for the past 5 years, or more. The only way to get this demographic into the market is to lower prices or lower their expectations of where and what their first property will be. Or probably both.

Looks like Canberra and a few other state capitals are very different.

https://www.theguardian.com/australia-n ... 20December.

I'm not sure the younger generation are willing to make the same sacrifices I made, let alone more? No o/s or even an expensive holiday for about five years. Driving around in a 15 to 20 y/o magna, group house to share and then a crappy bedsitter with my partner for 18 months to save a deposit. No new devices/no netflix/minimal entertainment or lavish eating out, and definitely no smashed avo.

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[gangrenous]

Why wouldn’t the market appropriately price in the value that owning your own home brings? If it’s of value to the individuals they’ll express that through their choices and financial decisions. Switzerland has twice the proportion of housing renters than in Australia and their society seems to work fine. The biggest barrier to affordability in Australia is supply, a supply fix is needed. If you don’t address the fundamental problems, you’re just reducing the efficiency of the economy and the long term growth in living standards overall. You’re just handicapping the country even more by distorting the tax system even more. There is no quick fix, certainly the answer is not in the tax system (apart from making sure it’s as neutral as possible).

Same reason the market doesn’t price in carbon emissions environmental impact. People are very bad at pricing in longer term costs/benefits, or in the case of housing - don’t have the capital behind them to make the more efficient play (e.g. Sam Vimes Boot Theory).

I disagree we have a neutral and balanced tax system. We’ve allowed people to grow wealth faster and easier through owning assets than through productive work.

I honestly am failing to see anything presented as a negative outcome here in rebalancing investors against owner occupiers other than ideological purity…

An ideological purity which is coming at the expense of others sharing in the benefits the generations before them experienced.

[gangrenous]

All my comments on this topic are based on the younger generation complaining that they've been priced out of the market and these same comments have been pretty consistent for the past 5 years, or more. The only way to get this demographic into the market is to lower prices or lower their expectations of where and what their first property will be. Or probably both.

Why would it be so bad if prices stabilised for a while or dropped a bit?

I'm not sure the younger generation are willing to make the same sacrifices I made, let alone more? No o/s or even an expensive holiday for about five years. Driving around in a 15 to 20 y/o magna, group house to share and then a crappy bedsitter with my partner for 18 months to save a deposit. No new devices/no netflix/minimal entertainment or lavish eating out, and definitely no smashed avo.

On the basis of what? An old man’s feelings while he shakes his fist at clouds? **** me.

You yourself cited kids staying at home longer. The income multiples have doubled or near tripled. Would you have been happy living your spartan life for 10 years to get the same opportunity you had? While the problem worsens and that will likely keep creeping up as they do it?

You wonder why they take the opportunity to do some comparatively cheap activities that make them feel like they’re living their life?

[Mickey_Raider]

It is just perplexing how some who are clearly not millennials or younger gens just outright refuse to accept the simple arithmetic staring them in the face, and prefer to drink their own delusional kool aid.

There is no greater measure of housing affordability than to simply look at the median income to median house price ratio.

Back in the halcyon days (where apparently everyone just worked hard and didn’t eat avocados), income to house price was 1:3-4.

Adjusting that ratio to 2024 means that houses would be something in the order of 250-300k.

That sort of amount is closer to the fkn deposit you need for a house in Sydney rather than the full price.

The ratio now is something more in the order of 1:10-12.

I dunno if it is an instinctive reaction to feeling “attacked” like that woman on qanda the other night.

But it is just so supremely out of touch to try and deny the arithmetic and trot out the usual tropes about iPhones and laziness etc to explain a full blown inter generational crisis.

[Mickey_Raider]

Distributional issues are best addressed through distributional policies. Favouring owner occupiers through extra tax distortions doesn’t increase housing supply or affordability; the biggest issue there is inappropriate planning policies of State and local governments. It’s always best to ensure the tax system is as neutral as possible for investment decisions. Many other countries have higher proportions of housing renters than Australia. And there are advantages in renting for many people, eg those who need to be mobile for employment opportunities. Bottom line is, it’s best to find the fundamental problems which make markets not work as well as they should. The answer is not in tax, it’s in State and local regulations.

Wait, are you saying that negative gearing and CGT discount are neutral tax policies?

[greeneyed]

Carbon pollution is very different to house ownership.

Carbon pollution has negative spill over effects (costs for the community) which are not being priced in by the polluters.

In contrast, the vast bulk of benefits of home ownership accrue to the home owner. The benefits are very well understood in Australia (high demand is the evidence). The broader societal benefits ascribed to it are generally overstated... you just have to look at Switzerland to see that.

The high demand for housing ownership in Australia is probably affected by the broad appreciation of the significant capital gains associated with it. That is created by supply limits. Geographical contraints are natural, but planning and other government policies contribute significantly to the supply limits. There are some "monopoly gains" from getting in... and then there's an interest in continuing the policies that limit the supply.

The current tax system is not as neutral as it should be... but that's not a reason to try and further distort it.

[gerg]

All my comments on this topic are based on the younger generation complaining that they've been priced out of the market and these same comments have been pretty consistent for the past 5 years, or more. The only way to get this demographic into the market is to lower prices or lower their expectations of where and what their first property will be. Or probably both.

Why would it be so bad if prices stabilised for a while or dropped a bit?

I'm not sure the younger generation are willing to make the same sacrifices I made, let alone more? No o/s or even an expensive holiday for about five years. Driving around in a 15 to 20 y/o magna, group house to share and then a crappy bedsitter with my partner for 18 months to save a deposit. No new devices/no netflix/minimal entertainment or lavish eating out, and definitely no smashed avo.

On the basis of what? An old man’s feelings while he shakes his fist at clouds? **** me.

You yourself cited kids staying at home longer. The income multiples have doubled or near tripled. Would you have been happy living your spartan life for 10 years to get the same opportunity you had? While the problem worsens and that will likely keep creeping up as they do it?

You wonder why they take the opportunity to do some comparatively cheap activities that make them feel like they’re living their life?

No what I'm saying is younger people aren't even willing to make the same sacrifices (for the exact same length of time) that I did. Honestly, the crappy two bedroom apartment that we bought in 2011 for 325k - and then sold in 2017 for the same price - has gone up in value less than 100k in the past 7 years. You telling me a younger person cannot grind it out for a couple of years, living with mum and dad, while on a higher salary than I was when I was saving cannot save a 40k deposit?

It's tough out there for sure but it's not impossible like many make out. It's easier to just throw your hands in the air ... Oh its too **** hard I'm **** off to Bali for two weeks to do a yoga retreat and have acai bowls.



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[greeneyed]

Wait, are you saying that negative gearing and CGT discount are neutral tax policies?

"Negative gearing" is, as it is simply allowing for expenses incurred in earning assessable income to be deductible. Changing that for one class of investment assets would be poor economic policy. We weren't having a discussion about the CGT discount (as I understood it), but that's a distortion, that should be removed. I concede it would be very difficult to do so.

[gerg]

It is just perplexing how some who are clearly not millennials or younger gens just outright refuse to accept the simple arithmetic staring them in the face, and prefer to drink their own delusional kool aid.

There is no greater measure of housing affordability than to simply look at the median income to median house price ratio.

Back in the halcyon days (where apparently everyone just worked hard and didn’t eat avocados), income to house price was 1:3-4.

Adjusting that ratio to 2024 means that houses would be something in the order of 250-300k.

That sort of amount is closer to the fkn deposit you need for a house in Sydney rather than the full price.

The ratio now is something more in the order of 1:10-12.

I dunno if it is an instinctive reaction to feeling “attacked” like that woman on qanda the other night.

But it is just so supremely out of touch to try and deny the arithmetic and trot out the usual tropes about iPhones and laziness etc to explain a full blown inter generational crisis.

If this is directed at me, can you just clarify whether 2011 (when I purchased an apartment) classifies as the 'halcyon days'?

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[gangrenous]

No what I'm saying is younger people aren't even willing to make the same sacrifices (for the exact same length of time) that I did.

And I’m asking you on the basis of what! At the moment it appears to be on the basis of telling yourself fairytales to make you feel better to absolve your apathy.

Honestly, the crappy two bedroom apartment that we bought in 2011 for 325k - and then sold in 2017 for the same price - has gone up in value less than 100k in the past 7 years. You telling me a younger person cannot grind it out for a couple of years, living with mum and dad, while on a higher salary than I was when I was saving cannot save a 40k deposit?

You’re over indexing on your personal anecdote. A property that’s gone up < 33% from 2011 is not the norm.

I’m not saying younger people shouldn’t have to sacrifice and save. I’m saying they should t have to do it twice as long as you did to get the same thing.

[gangrenous]

Wait, are you saying that negative gearing and CGT discount are neutral tax policies?

"Negative gearing" is, as it is simply allowing for expenses incurred in earning assessable income to be deductible. Changing that for one class of investment assets would be very bad economic policy. We weren't having a discussion about the CGT discount (as I understood it), but that's a distortion, that should be removed. But I concede it would be very difficult to do so.

For me the conversation is on any investor benefits - so don’t see why CGT shouldn’t be in this discussion.

I see no reason, again beyond worthless ideological purity, why negative gearing must be kept with exactly the same conditions for an asset that you live in.

[Mickey_Raider]

It is just perplexing how some who are clearly not millennials or younger gens just outright refuse to accept the simple arithmetic staring them in the face, and prefer to drink their own delusional kool aid.

There is no greater measure of housing affordability than to simply look at the median income to median house price ratio.

Back in the halcyon days (where apparently everyone just worked hard and didn’t eat avocados), income to house price was 1:3-4.

Adjusting that ratio to 2024 means that houses would be something in the order of 250-300k.

That sort of amount is closer to the fkn deposit you need for a house in Sydney rather than the full price.

The ratio now is something more in the order of 1:10-12.

I dunno if it is an instinctive reaction to feeling “attacked” like that woman on qanda the other night.

But it is just so supremely out of touch to try and deny the arithmetic and trot out the usual tropes about iPhones and laziness etc to explain a full blown inter generational crisis.

If this is directed at me, can you just clarify whether 2011 (when I purchased an apartment) classifies as the 'halcyon days'?

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Probably not.

Congratulations you appear to either own a home or have a mortgage.

So do I. I also negatively gear.

Does any of that in any way alter my point though? I don’t think it does.

[greeneyed]

Wait, are you saying that negative gearing and CGT discount are neutral tax policies?

"Negative gearing" is, as it is simply allowing for expenses incurred in earning assessable income to be deductible. Changing that for one class of investment assets would be very bad economic policy. We weren't having a discussion about the CGT discount (as I understood it), but that's a distortion, that should be removed. But I concede it would be very difficult to do so.

For me the conversation is on any investor benefits - so don’t see why CGT shouldn’t be in this discussion.

I see no reason, again beyond worthless ideological purity, why negative gearing must be kept with exactly the same conditions for an asset that you live in.

I'm happy to add CGT to the discussion. That's a distortion in the tax policy that should be removed. You have the same tax treatment for all investments, as that ensures that capital is tied up in the most beneficial activity for the investors... and the economy more broadly. Favouring some investments over others leads to distorted decisions by individuals and lower living standards overall.

You keep talking about "ideological purity", like that's an argument. It is a completely meaningless label.

I'm just trying to explain what good economic policy is, and the policies that produce the highest living standards for the country. Clearly, I'm not getting anywhere, so no point continuing.

[gangrenous]

No, you haven’t explained that. You are working from the assumption that the same treatment across asset classes is the most beneficial economically. You haven’t cited or argued anything that I can see about how that consistency helps us get good outcomes regarding home ownership.

I’m arguing that we don’t have good outcomes and should change those laws to shift that balance.

You seem to think there’s no problem and so the framework shouldn’t change? That seems to be our difference.

In which case you’re right - no point continuing if either you don’t think there’s a problem, or if you do that you’re not willing to provide a reason the current framework makes it better.

[greeneyed]

I'm saying nothing should change. Far from it. But the tax policy for negative gearing is not the issue. Changing it would be. The solutions to improving the operation of the housing market lie elsewhere.

Your suggestion to change a tax arrangement to a more distortionary one is going to be sub optimal.

If you don't get that having the same tax rules for all investment classes is important... so that people take investment decisions that are undistorted by the tax treatment... so that investments find their ways to the most productive uses, consistent with fundamental investor preferences... and that that is the best thing for the economy, growth and long term living standards...