Saturday 30 March 2019

negative views of negative gearing

Plans to "curb" negative gearing will come at the "worst possible time" for WA's property market. So say the real estate sellers. And we know we can trust them for an honest statement of well researched facts.

What could possibly be wrong with negative gearing? The worse our purchase decision, the more the government will reward our stupidity. Even better, the government will reward our stupid investment decisions with money from the suckers who actually pay tax.

Brilliant!

So "now" is the worst possible time to change the rules. After all, we have just had three years of falling prices for real estate. Any changes will... well... what?

With negative gearing as it is... we have just had three terrible years for real estate investment. So what is so terrific about the current rules? What part of falling prices do we want to maintain?

We have had three years of negative gearing matched to three years of falling house prices. This seems to be three years of data to link falling house prices to negative gearing. Why protect a failing payment for investor stupidity?

Three years of negative gearing has run with three years of falling house prices. Perhaps it's time to try something better. Something that works. Or, at least, something which is not a government handout to the biggest investment losers.
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On the other hand: what is wrong with falling house prices?

Perth is now Australia's second-most most liveable city. Two years ago we were the least liveable.

Could it be our beaches? our accessible bush? perhaps even our slowing down of population growth? Near the top of the list for liveability is... falling property prices. At last, people in WA can (almost) afford to buy property.

Of course we don't really want WA to be liveable, that just attracts other people to come here. So we pour concrete as close as possible to our clean and sandy beaches. We convert bush into housing estates and lock the public out of the rest. We fill every open space with concrete block-houses.

And if that doesn't keep away non-West Aussies... we will do anything possible to raise property prices. Or at least to protect the stupidity-bonus which has paid for so much concrete profit in the past.






====    Dr Nick Lethbridge  /  Consulting Dexitroboper
Agamedes Consulting / Problems? Solved.
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"I think and think, for months, for years. Ninety-nine times the conclusion is false. The hundredth time I am right." … Einstein
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dying for you to read my blog: notdotdeaddotyet.blogspot.com.au :-)
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