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10% Of Oz Population In Btl


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I read in the paper today that 2 million Australians have investments in rental properties. :o It didn't state the number of properties, only the number of people investing in them.

I would expect that very few properties would have more than two investors (husband and wife) and given that many "own" more than one BTL the total number of properties must be pretty large.

Now, there are only 20 million people in Oz and that's counting everyone. Take out the children and elderly and the size of the workforce is somewhere in the order of 60% of the population I'm told. That's 12 million. If 2 million of them are investing in BTL then that's one in six workers which is a "mass" investment by any measure.

Anyone know how the UK compares? I'm thinking that Oz is far worse so whatever problems the UK is going to have they are going to be far worse in Oz. :(

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Yes the Australian market has been talked up for decades now. In the last decade it came close to busting, but the market was encouraged by the Sydney Olymics arriving soon & interest rates starting to fall.

But that wasn't enough, so after the Olympics & in the face of a slump caused by the introduction of GST (VAT to you), to encourage new building the federal govt paid everyone $7,000 towards their deposit and an extra $7,000 if they were building a brand new home. The $7,000 for a new build was phased out, but the other $7,000 is still paid towards first time buyers costs.

They also at some point in the last decade halved the CGT paid by investors who own their investment for more than a year.

All this & the market has really taken off, it - IMO - is therefore very easy to say that the Aus market has gone much further than the UK market because the UK hasn't had any of these kind of incentives introduced.

Edited by Time to raise the rents.
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By who?

Having lived in both the UK and Australia over the last few decades I can let you know which of the two has the most over-hyped market.

Clue - It's not Australia

I live in the south (London area) Prices have definately fallen here. Around 10% off peak, I reckon.

I can only assume by those remarks that you don't know WTF you are talking about.

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I'd like to hear more on your theories. For example, how is it that property yields in Australia are around 2-3% whilst in the UK they're between 5 & 8%??????????

Any comments now on which market has gone further & been talked up the most?????????

my last reply stands, not worth adding to it really..

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Have to agree with TTRTR on this one.  Australia's property bubble has inflated far more than the UKs.  Just look at the income multiples and it's more like Irish levels than the UK!

Lets have a look at where I'm coming from then.

Been here a while but last lived in UK in Birtley, Co. Durham

searching under 100,000 gets this:

http://www.rightmove.co.uk/viewdetails-599...pa_n=1&tr_t=buy

local search gets this:

http://www.realestate.com.au/cgi-bin/rsear...u=&fmt=&header=

Same money. Although getting it is alot easier here.

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I read in the paper today that 2 million Australians have investments in rental properties.  :o  It didn't state the number of properties, only the number of people investing in them.

I would expect that very few properties would have more than two investors (husband and wife) and given that many "own" more than one BTL the total number of properties must be pretty large.

Now, there are only 20 million people in Oz and that's counting everyone. Take out the children and elderly and the size of the workforce is somewhere in the order of 60% of the population I'm told. That's 12 million. If 2 million of them are investing in BTL then that's one in six workers which is a "mass" investment by any measure.

Go to somersoft or propertyinvesting forums. There are pr1ck5 on there with 8 properties. No wonder I can't buy one :angry:

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Lets have a look at where I'm coming from then.

Been here a while but last lived in UK in Birtley, Co. Durham

searching under 100,000 gets this:

http://www.rightmove.co.uk/viewdetails-599...pa_n=1&tr_t=buy

local search gets this:

http://www.realestate.com.au/cgi-bin/rsear...u=&fmt=&header=

Same money. Although getting it is alot easier here.

I'm not saying you don't get more bricks and land for your money in Aus. I'm saying that you can't make a profit renting it out in Aus, a clear indication that it's gone into speculative territory.

In the UK, it is still possible to find property that will rent at a profit, therefore its justifiably more expensive per square metre.

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I'm not saying you don't get more bricks and land for your money in Aus. I'm saying that you can't make a profit renting it out in Aus, a clear indication that it's gone into speculative territory.

In the UK, it is still possible to find property that will rent at a profit, therefore its justifiably more expensive per square metre.

The dopey buggers here just bought everything they could get their hands on. At one stage property was shooting up by $5k a week. It would be ok if it were underpriced as some was (rent exceeded mortgage) but come on

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You don't have to rent a property profitably in Australia because (through the wonders of negative gearing) the tax man will refund half your loss. Add to that generous depreciation allowances you can often turn a pre-tax loss into an after-tax profit ... and when you sell you pay just half the income tax rate on your capital gains.

Yes, our tax system is screwed up, but there is bugger all chance this changing (ever). The Hawke/Keating government tried to get rid of negative gearing in 1985 but was met with a tsunami of protest from the property industry, and it was reinstated in 1987.

I can't see any government abolishing negative gearing, doubling CGT, or removing depreciation allowances, for the very reason that 2 million Australians are now property investors.

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You don't have to rent a property profitably in Australia because (through the wonders of negative gearing) the tax man will refund half your loss.  Add to that generous depreciation allowances you can often turn a pre-tax loss into an after-tax profit ... and when you sell you pay just half the income tax rate on your capital gains.

Yes, our tax system is screwed up, but there is bugger all chance this changing (ever).  The Hawke/Keating government tried to get rid of negative gearing in 1985 but was met with a tsunami of protest from the property industry, and it was reinstated in 1987.

I can't see any government abolishing negative gearing, doubling CGT, or removing depreciation allowances, for the very reason that 2 million Australians are now property investors.

Getting back HALF the loss helps & being able to claim depreciation HELPS DEVELOPERS SELL PROPERIES along with helping the investor to manage their cashflow. All designed to help keep the market afloat. After all, negative gearing was introduced to keep loss making investors in the market in the 80's & to encourage new ones to get in.

But what a very large number of people don't realise and the property seminars won't tell you is that when you sell your depreciated property, the tax office claws back that depreciation over the years in one go on the sale by adding it as an income item to the sellers taxable income that year and taxing it, usually at the highest rate possible.

This can leave an investor with a serious headache if they've claimed a large depreciation allowance & made no inroads into the mortgage at the same time. They may end up with the bank and tax man taking so much of the end product that they wonder why they bought in the first place.

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Getting back HALF the loss helps & being able to claim depreciation HELPS DEVELOPERS SELL PROPERIES along with helping the investor to manage their cashflow. All designed to help keep the market afloat. After all, negative gearing was introduced to keep loss making investors in the market in the 80's & to encourage new ones to get in.

But what a very large number of people don't realise and the property seminars won't tell you is that when you sell your depreciated property, the tax office claws back that depreciation over the years in one go on the sale by adding it as an income item to the sellers taxable income that year and taxing it, usually at the highest rate possible.

This can leave an investor with a serious headache if they've claimed a large depreciation allowance & made no inroads into the mortgage at the same time. They may end up with the bank and tax man taking so much of the end product that they wonder why they bought in the first place.

TTRTR, while I disagree with many of the sentiments you have expressed on these boards, you are spot on here!

I remember making your EXACT point to an agent trying to flog me a negatively geared investment property when the Keating CGT rules were in place. Under those rules you also copped a CPI magnifier because the building depreciation reduces the

cost base rather than the profit.

The agent 'didn't think normal depreciation rules applied to housing', and he DEFINITELY didn't want to find out. All he knew was that he could get more sales by talking about tax refunds.

The position's a bit different now that only half of nominal Capital Gains are taxed, rather than the entire CPI-adjusted gain.

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I'm not saying you don't get more bricks and land for your money in Aus. I'm saying that you can't make a profit renting it out in Aus, a clear indication that it's gone into speculative territory.

In the UK, it is still possible to find property that will rent at a profit, therefore its justifiably more expensive per square metre.

The rental value of the UK property is about 100 quid/week

Aussie property about $200=80quid

I'd say that after the tax benefits are taken into account the Aussie property would be a better bet.

Not that I'd buy either as an investment in the current market, but there is not the huge difference you seem to think.

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102425832mm1118665808.jpg

Why is it only single storey? Are most homes in Australia like this? I would much prefer a 2- or even 3-storey home. Is there some kind of planning law against building multi-storey homes or something? That one looks like a bungalow for old people.

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is there any tax relief?

There is tax relief.

Also buyers (especially FTBs - though anyone buying on their own) can add up the number of spare bedrooms in the house they intend to purchase, and the banks will increase the size of mortgage based upon the potential income gained by renting them out...

Of course people with no intention of renting out their spare bedrooms take advantage of this, and increase prices accordingly...

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If not they have gone off the deep end

And yes, they have gone completely off the deep end.

When people think there's nothing wrong with making a 3% yield on an IO mortgage, then they have gone well and truly off the fookin' deep deep deep end...

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And yes, they have gone completely off the deep end.

When people think there's nothing wrong with making a 3% yield on an IO mortgage, then they have gone well and truly off the fookin' deep deep deep end...

Sorry, was ignorant of Irish market.

Just had a search of internet, puts my whinging about North East prices into perspective.

Unless you're on huge wages over there - the crash is coming.

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Sorry, was ignorant of Irish market.

Just had a search of internet, puts my whinging about North East prices into perspective.

Unless you're on huge wages over there - the crash is coming.

Ok Quokka - no problems (or should I say, no worries)

Many "investors" in Ireland will have a lot to be sorry for over the next few years, as prices head south. Notice, how I call them "investors", as many are not investors just wild speculators.

No true investor would invest in a scheme with such pitiful yields...

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  • 439 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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