And to think back in the 70's i use to think that 60 000 for a 2...

First 4 Last

Share
Profile

Follow
happydayz

14,188 Posts.

496

19/02/21

13:04

Post #: 51156046
Share

Originally posted by coppabox: ↑

house prices are crazy high because:

- the government creates programs like first home owner grants, stamp duty discounts etc. So if you get a $10k grant you think you are saving $10k on a house, but really all that happens is sellers add $10k to their list price due to increased demand. Over time the list price increases more and more until demand plateaus. anytime the government provides a discount to save us money, we save nothing but home owners and real estate agents get rich.

- the government can't let house prices fall because everyone is getting "rich" on the capital growth, using home equity to fund all their expenses. This has been happening for years now. example, During COVID the government gave out free money so people could pay their rent, all this did was keep the home owners afloat so they don't have to sell up and end up causing a housing crash. Do you really think landlords were going to evict their tenant because they couldn't pay just so they could get another tenant that couldn't pay... all during a period where you couldn't even go outside in the first place? This had nothing to do with helping the tenant, the government used our tax money to keep the housing market from falling.

- interest rates are manipulated to avoid a housing crash, again, the government simply cannot let house prices fall. It would be an unmitigated disaster. They are already winding back the responsible lending standards that were put in place to avoid a housing bubble, this frees up credit so people can keep buying homes.

- the Chinese bought property in Australia without restraint, pushing up prices for all.

- negative gearing means people who can already afford a house can in fact afford to get another one for investment purposes. Again, this is government influencing house prices via tax breaks.

- I heard they are now considering letting you use your super to buy a house. Give you one guess what this will do to house prices?

in short, the whole economy is riding on the government induced wealth effect of home ownership. The last thing they want is a fall in house prices....so forget plans for over supply. If you want house prices to fall in line with wages then you need the free market to dictate pieces, rather than government intervention. If the government was to intervene it should only be to protect you as an Australian and stop foreign ownership of investment properties.

Expand

And to think back in the 70's i use to think that 60 000 for a 2 level house was dear. Boy the world of money has gone crazy wild up to now.
7 Upvote

Reply