The future of Australian property prices

[JohnDe]

now i note in certain ( foreign ) nations Airbnb , is failing fast ( but NOT everywhere )

is that happening in Oz or will tourism and the future ( Brisbane ) Olympics Games allow Australia a slower decline in Airbnb demand ( if any )

good luck on getting a speedy ( and satisfactory ) completion

I think it depends on the government regulation for different locations. Take Victoria for an example, because of the housing shortage there was or is new regulation that limits the number of days that a property can be leased using Airbnb, and some tax changes. Most likely to gently persuade property owners to rent rather than Airbnb, aimed at high density population locations.

In my state nothing has changed, and the government said that there were no plans to change in this term or the next.

I already have a beach apartment that I Airbnb, works out that it is very popular for about 8 months of the year, and quiet for the rest. However, the dollar return after 4 months using Airbnb equaled 12 month's rent.

There is no certainty in anything anymore, but with a bit of planning and the right locations it is possible to make a good income.

 

[qldfrog]

I think it depends on the government regulation for different locations. Take Victoria for an example, because of the housing shortage there was or is new regulation that limits the number of days that a property can be leased using Airbnb, and some tax changes. Most likely to gently persuade property owners to rent rather than Airbnb, aimed at high density population locations.

In my state nothing has changed, and the government said that there were no plans to change in this term or the next.

I already have a beach apartment that I Airbnb, works out that it is very popular for about 8 months of the year, and quiet for the rest. However, the dollar return after 4 months using Airbnb equaled 12 month's rent.

There is no certainty in anything anymore, but with a bit of planning and the right locations it is possible to make a good income.

Council is the enemy here on sunny coast and noosa:
Special higher rates, limits on duration, 24/7 contact, etc etc

 

[divs4ever]

I think it depends on the government regulation for different locations. Take Victoria for an example, because of the housing shortage there was or is new regulation that limits the number of days that a property can be leased using Airbnb, and some tax changes. Most likely to gently persuade property owners to rent rather than Airbnb, aimed at high density population locations.

In my state nothing has changed, and the government said that there were no plans to change in this term or the next.

I already have a beach apartment that I Airbnb, works out that it is very popular for about 8 months of the year, and quiet for the rest. However, the dollar return after 4 months using Airbnb equaled 12 month's rent.

There is no certainty in anything anymore, but with a bit of planning and the right locations it is possible to make a good income.

i am guessing the real silver-lining (s ) in Airbnb

the seasonal vacancies give you time for planned maintenance/repairs/upgrades

and an implied guarantee the tenants will not over-stay and give you an eviction drama sometime later

given regulation changes on rental properties and other policy changes , i see a slow trend away from folks investing in rental properties ( for accommodation)

 

[JohnDe]

i am guessing the real silver-lining (s ) in Airbnb

the seasonal vacancies give you time for planned maintenance/repairs/upgrades

and an implied guarantee the tenants will not over-stay and give you an eviction drama sometime later

given regulation changes on rental properties and other policy changes , i see a slow trend away from folks investing in rental properties ( for accommodation)

I reckon you are right.

A very good friend spent his working career having to live in several cities in Australia and overseas with his family in tow, he built up a property portfolio in several states. He has been semi retired for 4 years with his own consultancy business.

Last year he decided to start selling some of his properties due to difficult new government regulations that favour tenants over landlords, and had some problems with tenants damaging properties. Sold 2 of 3 Queensland properties, one Sydney property and is keeping an apartment with harbour views, sold an Adelaide property and keeping another that he will be Airbnb.

He worked out that if he Airbnbs his last remaining properties he has no hassles from tenants and at the very worst will make the same money he made when renting.

 

[divs4ever]

I reckon you are right.

A very good friend spent his working career having to live in several cities in Australia and overseas with his family in tow, he built up a property portfolio in several states. He has been semi retired for 4 years with his own consultancy business.

Last year he decided to start selling some of his properties due to difficult new government regulations that favour tenants over landlords, and had some problems with tenants damaging properties. Sold 2 of 3 Queensland properties, one Sydney property and is keeping an apartment with harbour views, sold an Adelaide property and keeping another that he will be Airbnb.

He worked out that if he Airbnbs his last remaining properties he has no hassles from tenants and at the very worst will make the same money he made when renting.

the major problem i see , with Airbnbs is that they tend to be in areas of rapidly appreciating land values ( and rising costs/rates/fees ) which might be an issue for those tucking Airbnbs in their SMSF

 

[sptrawler]

the major problem i see , with Airbnbs is that they tend to be in areas of rapidly appreciating land values ( and rising costs/rates/fees ) which might be an issue for those tucking Airbnbs in their SMSF

Buying rental property into the SMSF always seemed fraught with danger to me, that is unless you had a huge amount of money, then it would be a no brainer.
When I started the SMSF borrowing for residential property wasn't allowed, I thought that was a good idea.

 

[JohnDe]

the major problem i see , with Airbnbs is that they tend to be in areas of rapidly appreciating land values ( and rising costs/rates/fees ) which might be an issue for those tucking Airbnbs in their SMSF

He sold all his low cost properties and kept the one which are seeing property prices skyrocket.

He retired from corporate finance and started his consultancy business to keep him active in between traveling the world spending his retirement money in his SMSF that he wisely started when it wasn’t fashionable.

One thing I do know is that if you have multiple properties, don’t put them all into your SMSF.

 

[divs4ever]

Buying rental property into the SMSF always seemed fraught with danger to me, that is unless you had a huge amount of money, then it would be a no brainer.
When I started the SMSF borrowing for residential property wasn't allowed, I thought that was a good idea.

say $5 million ( of property ) in your SMSF wouldn't be so huge for say a middle-aged tradie ( or other independent professional ) that would be 6 or 7 selectively bought houses in say the last ten years with any profits in the rentals helping fund the next buy .

but all investing involves risk , so if the investor has a good grip on property ( even better if qualified to do some repairs/maintenance )

the major problem is increasing regulation ( and the extra costs that incurs)

i remember 50 years back the local newsagent , bought a local block of land , removed the existing house and had built a block of ten single bedroom units on the block , that turned out very well for him , the land alone would sell for , maybe. $2 million now and the units were double brick and flood resistant ( unless the climate alarmist get their wishes ) 10 units at maybe $200 a week ( reasonably well located , in present times )

so maybe not so huge if the investor makes wise choices when they are in accumulation phase

i also worked with an ( under-employed ) architect that bought his investment house ( a 5 bed-roomer ) lived in the house but sub-let the other 4 bedrooms out , ( and NOT telling the other 'house-sharers he was the owner ) and was crushing the mortgage payments at the time

 

[TimeISmoney]

say $5 million ( of property ) in your SMSF wouldn't be so huge for say a middle-aged tradie ( or other independent professional ) that would be 6 or 7 selectively bought houses in say the last ten years with any profits in the rentals helping fund the next buy .

but all investing involves risk , so if the investor has a good grip on property ( even better if qualified to do some repairs/maintenance )

the major problem is increasing regulation ( and the extra costs that incurs)

i remember 50 years back the local newsagent , bought a local block of land , removed the existing house and had built a block of ten single bedroom units on the block , that turned out very well for him , the land alone would sell for , maybe. $2 million now and the units were double brick and flood resistant ( unless the climate alarmist get their wishes ) 10 units at maybe $200 a week ( reasonably well located , in present times )

so maybe not so huge if the investor makes wise choices when they are in accumulation phase

i also worked with an ( under-employed ) architect that bought his investment house ( a 5 bed-roomer ) lived in the house but sub-let the other 4 bedrooms out , ( and NOT telling the other 'house-sharers he was the owner ) and was crushing the mortgage payments at the time

A lot of money to be made from real estate, it's just like anything, you've got to know what you are doing.

There are a lot of sharks out there selling tarted up dumps. At one stage, you could have bought a shack in the inner city CBD and flipped it the next day for a lot more without even touching it.

 

[Dona Ferentes]

There are a lot of sharks out there selling tarted up dumps. At one stage, you could have bought a shack in the inner city CBD and flipped it the next day for a lot more without even touching it.

hyperbole, perhaps

 

[sptrawler]

hyperbole, perhaps

Absolutely IMO.
Eventually someone is caught carrying the parcel.
Meanwhile the Govt's keep proping it up.

 

[TimeISmoney]

Absolutely IMO.
Eventually someone is caught carrying the parcel.
Meanwhile the Govt's keep proping it up.

House prices keep on climbing, even going to be worse in Brisbane now with the Olympics coming up. I get real estate agents trying to email and phone me a few times a month, I keep on blocking their numbers on my phone and they ring on another number. Now it's to the point that unless I'm waiting for an important phone call, I don't answer any unknown numbers. We had a dick here that my partner entertained because she wanted to fish a property value out of them, we couldn't get rid of them in the end. I had to threaten them with the police and violence, they even put a signed sales contract in our door.

 

[rolly1]

House prices keep on climbing, even going to be worse in Brisbane now with the Olympics coming up. I get real estate agents trying to email and phone me a few times a month, I keep on blocking their numbers on my phone and they ring on another number. Now it's to the point that unless I'm waiting for an important phone call, I don't answer any unknown numbers. We had a dick here that my partner entertained because she wanted to fish a property value out of them, we couldn't get rid of them in the end. I had to threaten them with the police and violence, they even put a signed sales contract in our door.

View attachment 199223

Hmm what part of Brisbane is that?

 

[Smurf1976]

Angry apartment owners say they’re being charged for electricity generated by solar panels on their own roof thanks to a confidential agreement signed between their developer and the energy provider.

There's one in SA which basically says that as a property owner you (1) must connect gas to your property (2) must use gas for the specified purposes (3) must purchase this gas from the monopoly supplier.

And yes it's legally binding and the real gotcha - there's no sunset clause, it continues indefinitely.

That's a private arrangement in every sense, nothing to do with government. My view = it ought be illegal. It's one thing to choose to use gas, thee are arguments for and against, but it's quite something else to be forced to indefinitely use a particular utility in a situation where multiple direct competitors (electricity, solar, bottled gas, liquid fuels, wood) exist.

 

[TimeISmoney]

Hmm what part of Brisbane is that?

On the south side.

 

[qldfrog]

I read in Canada, Toronto, there is now a huge stock of newly built units which are staying on the market with no buyer.
Canada is not Australia but their RE has been awfully similar with the same causes and results.
Is it a sign of a coming serious slow down?

 

[qldfrog]

Behind the Trump is the cause of all evils including falling RE:

Mortgage rates at 3% or lower the magic number to reignite Canada's housing market

Mortgage rates need to drop to three per cent to get Canada's housing market and homebuyers fired up again, say industry watchers. Read on

financialpost.com

 

[divs4ever]

Behind the Trump is the cause of all evils including falling RE:

Mortgage rates at 3% or lower the magic number to reignite Canada's housing market

Mortgage rates need to drop to three per cent to get Canada's housing market and homebuyers fired up again, say industry watchers. Read on

financialpost.com

well for a while Canada's house market was very over-heated ( unlike the weather there at times )

and just like in Australia , there was a narrative that property prices never go down ( which can be inaccurate in the medium term )

 

[JohnDe]

Land tax has become a cash cow for state governments, and with desperate state governments come ever increasing tax hikes. What do they think business will do with the added cost? There are only two options - shut the doors or pass on the increase. Adding to increase in property prices, an inefficient economy, high cost of goods and higher inflation, less money in the pockets of consumers, less spending, more business closing down, more welfare.

The owner of a Dandenong South sandblasting business has been left reeling after his land tax bill spiralled from $8700 to more than $203,000 in the past decade.​

​

“This business generates a steady tax income stream (GST, payroll tax, company tax) for the state and federal governments,” Mr Romas wrote. “Why do Victorian businesses employing people and generating income for our federal and state governments get penalised so harshly with land tax? Who would want to start a new business in Victoria? The idea of running a business, employing workers, and striving to generate a profit only to pay a significant portion of this profit over to the state government in land tax has become a ridiculous business model.”​

Victorian budget: Breaking point of 2300 per cent tax hike

The owner of a Dandenong South sandblasting business that has worked on some of the biggest construction projects in Melbourne, including the MCG, has been left reeling after his land tax bill spiralled from $8700 to more than $203,000 in the past decade.

Angie Romas, who has run his steelwork, sandblasting and painting business DH Corrosion & DPC Coatings for more than 20 years, is in the frontline of Labor’s assault on businesses and property investors that will see the Allan government reap a predicted $9.3bn from land taxes – including its extra Covid debt levy on landholdings – in 2027-28, up from the $5.2bn it collected in 2022-23.

Labor has hiked land taxes as Victoria buckles under state debt which last year’s budget forecast to grow from $156.2bn this year to $187.8bn in June 2028.

Mr Romas, 60, who owns his business with his son Adam, 28, wrote in March to Jaclyn Symes, who will deliver her first budget as the state’s treasurer next Tuesday, pleading for relief. He told The Australian on Wednesday he had not received a response.

In his letter to Ms Symes, Mr Romas said he was looking at closing his business because the land tax had “become too large a cost to justify” its continuation at the premises.

Mr Romas said his business – which employs 14 people and has been a supplier for major Victorian projects including the MCG expansion and refurbishments, Docklands Stadium, Southern Cross station and EastLink bridges — had been operating consistently at its Dandenong South site since 1973.

“This business generates a steady tax income stream (GST, payroll tax, company tax) for the state and federal governments,” Mr Romas wrote. “Why do Victorian businesses employing people and generating income for our federal and state governments get penalised so harshly with land tax? Who would want to start a new business in Victoria? The idea of running a business, employing workers, and striving to generate a profit only to pay a significant portion of this profit over to the state government in land tax has become a ridiculous business model.”

The Allan government did not respond to a request for comment by The Australian’s deadline.

The Victorian Chamber of Commerce and Industry, in its submission for Tuesday’s state budget, called for a reduction or removal of taxes that it said were stifling business investment, including land taxes and stamp duty. “State-based taxes on business dampen business growth and investment,” the chamber’s submission stated. “Further, the business community is already wearing both the mental health levy and the Covid debt levy, both of which have had a significant financial impact.

“There is no possibility of absorbing any further tax impost.

“Just three taxes alone – payroll tax, land tax and land transfer duty for commercial and industrial land – represent an average 40 per cent of Victoria’s total tax revenue. These taxes have increased at an average annual rate of 7.6 per cent in nominal terms.”

The chamber’s chief executive, Paul Guerra, said the spike in land tax was “pushing costs to unsustainable levels, stalling investment, slowing transactions and choking growth”.

“Instead of boosting activity, these changes are scaring off new and existing businesses and investors,” Mr Guerra said. “Winding back land tax would send a clear message: Victoria is open for business. If not, investment will keep heading elsewhere.”

Mr Romas said he was considering subdividing the land or selling it and moving to a smaller factory. However he said operating on a smaller property would reduce his business because it required a large property to handle and treat large fabrications and volumes of steelwork required to complete big projects.

“Why are business owners being extorted to pay for major projects and debt the state government has incurred?” he asked.

Mr Romas said he thought the government were trying to drive him out of the property “so that they can crystallise a sale of the property and then get the stamp duty”.

The state government expects to collect more than $10bn from Victorian taxpayers in stamp duty in 2027-28, up from $8.5bn in 2024-25, according to estimates in last year’s budget.

In its 2023 budget, the government introduced the extra land tax – the Covid debt levy – which applies until 2033 on eligible landholdings as part of its “Covid debt repayment plan”.

Revenue from the Covid debt levy on landholdings was expected to be $1.3bn in 2024-25 then grow by an average of 5.8 per cent per year, while land tax revenue was forecast to be $6.5bn in 2024-25 and estimated to grow by an average of 6.2 per cent per year over the forward estimates in last year’s budget.

 

[qldfrog]

Land tax has become a cash cow for state governments, and with desperate state governments come ever increasing tax hikes. What do they think business will do with the added cost? There are only two options - shut the doors or pass on the increase. Adding to increase in property prices, an inefficient economy, high cost of goods and higher inflation, less money in the pockets of consumers, less spending, more business closing down, more welfare.

The owner of a Dandenong South sandblasting business has been left reeling after his land tax bill spiralled from $8700 to more than $203,000 in the past decade.​

​

“This business generates a steady tax income stream (GST, payroll tax, company tax) for the state and federal governments,” Mr Romas wrote. “Why do Victorian businesses employing people and generating income for our federal and state governments get penalised so harshly with land tax? Who would want to start a new business in Victoria? The idea of running a business, employing workers, and striving to generate a profit only to pay a significant portion of this profit over to the state government in land tax has become a ridiculous business model.”​

Electorate blames Trump and reelects ALP, even after an actual dictatorship during COVID..says it all.
Now i really pity the business operators there.
Get out while you can..