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"To me it's definitely a no-lose game, it's the best way to create wealth in Australia,"
This article gives us an insight into the Australian real estate market. It seems to be the mindset for the average Australian. Everyone wants in, as it's pretty much been "up only" for ~20 years.
She puts the lack of a widespread landlord sell-off down to two things: negative gearing rules allowing investors whose rentals were losing money to reduce their personal tax bills, and the promise of a large payday when rentals were sold, sweetened by the 50 per cent capital gains discount.
"Negative gearing" allows one to offset their income tax with mortgage payments. An easy way to lever up on debt and buy more properties. Also a failsafe way to widen the gap between rich and poor.
The framing here of the 50% capital gains "discount" paints it in positive light, like the government is doing to a favor or something. Usually landlords don't want to realize this tax and only sell if they absolutely have to.
Australia Institute chief economist Greg Jericho says falling rental profitability in the ATO data shows negative gearing is becoming "a much more common situation" and investors are "winning both ways".
This is why I think that most Australians will be late adopters of Bitcoin. Until there's a crash in the real estate market, people will continue piling leveraged capital into it. And TBH I don't know what brings it down.
I've started hearing friends echo the "Real estate only goes up" line, too.
That definitely makes me want to get less invested in real estate.
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42 sats \ 3 replies \ @OT OP 9 Aug
I hear Canada and NZ are starting to see their property markets come down. I still don't see how it happens in Australia.
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Is there still a ton of demand from rich Indian and Chinese families for Australian housing?
I recall reading something about that a long time ago. It had something to do with school access, iirc.
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42 sats \ 0 replies \ @OT OP 9 Aug
I think there is. Immigration really spiked after COVID driving up further demand for housing. For some reason the schools seem to give international students good reputations. I wonder how long they have till that's gone.
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Interest rates declining drives up property prices. Speculative Property prices are driven by debt leverage...as explained in the article you quote. Fiat debt leverage. The rent on money has been steadily declining since the late 1980s and so property prices have been rising upon the increasingly cheap fiat leverage that enables. Today the rent on money cannot go much lower nor higher- thus that cycle of the last 35 years is over. Property price stagnation is the best you can expect from here onward - property prices are already declining in real terms here in NZ.
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Australian banks are mostly majority owned by US shareholders. Australians mortgages mostly profit American banks. Australia is monetarily and military a tribute state to the USA.
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You got any info on that? It's the first I've heard of it.
I find something very interesting and pitiable about the young man featured in the article, a deep sense that he is looking for answers to big questions in the wrong place.
This is a common thing with "real estate people" it seems to me, whether agents or the whole buzz around the industry, something about the ownership of property does not complete a person and it is revealed in their faces and their words.
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Australians are property ponzi obsessed. It’s borderline insanity. Last time I was in Australia, random people started shouting home prices at me. I’ve never seen anything like it. It’s a sickness that will come at great cost to the Australian economy when real estate is demonetized by Bitcoin.
Australia will remain a poor and ignorant far away land.
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100%. It's part of everyday conversation like talking about the weather.