According to the ATO (see my previous post) there were 2/3 of property investors negative gearing in 2011.
Now this is really odd as prices went up nearly 30% after the GFC, this means they should be collecting much more rent making the propertys positively geared.
The only reason this can be so is if the data is correct and people flip property on average every 5 years.
Since 2011 there has been no real increase in property prices which means a lot of people (according to the ATO) have lost $11K P.A or $40K in the hole over last few years.
Also according to the ABS 28% of Australians are in renters stress, which means as more jobs go, investors are going to start running into a lot of bad luck with tenants making it a more costly excercise for some.
Wont take much of an interest rate rise before property investors start losing their shirts and selling, leaving others who are in the hole to panic and decide to cut their losses.
I think even a 0.25% interest rate rise now would be the final nail in housing.
I know the bulls say wages have nothing to do with how high house prices can go, but it sure doesnt look that way.
