property 20 years lockout, page-96

Interesting thread.

The fact is, historically, property prices are less volatile than shares and they provide a slightly lower return. Hoping that prices crash the same way they do in the stock market when it's run too hard is not going to change anything. This is not the way property operates.

The main difference as I see it between shares and property is that property is a necessity, whereas shares are more of a luxury. You don't need shares. You buy them in order to generate a return greater than you can get elsewhere through capital growth or income. But you do need property. Everyone needs property. It will always be in demand. Whether it be as an owner occupier or a renter, you will always need 4 walls and a roof over your head.

When the property boom ended 5-6 yrs ago, and the share market boom took over, everyone expected the property prices to plummet due to their meteoric price rises of 2-3 times (in many areas) in 5-7 yrs. Did that happen?? Not that I saw. Some areas dropped slightly, some areas continued to rise slightly, and most areas just stagnated. Now it seems a new boom is starting to kick off in high demand areas.

The facts are the facts. Only a massive recession/depression will cause a property meltdown. As long as people have a job earning money, they will be either buying or renting houses. The demand will remain.

You can't eliminate negative gearing, that will have many other dire consequences.

Reducing the discounted CGT advantages might help, but that too will have some effect on rental prices.

One thing that could be tried (and I'm sure there are negatives to this too) is too eliminate stamp duty for owner occupiers, and allow the states to make up what they lose there by increasing the stamp duty for investors. In VIC on a $400k home that would save an owner occupier $20k.

Anyway, enough rambling for me.

Cheers