Australian housing bubble thread

can anyone explain tax calc from article. Looks like i am not up to date.

I thought if one incurs 28K loss, then claiming the loss even at highest tax rate will cut it 50%. Report claims benefits are muvh larger :

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The report calculates that an investor who buys a $500,000 investment property using a standard 7.5 per cent housing loan is likely to face a negative cash flow of around $28,500 a year. But the property is likely to incur tax losses of more than $22,000 a year as a result of negative gearing and depreciation. This means that for an investor on the top marginal tax rate, the out-of-pocket expense of owning the investment property plummets from $548 a week to $126 a week (or approximately $6,500 a year).
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http://www.businessspectator.com.au...-Goldman-Sachs-property-debt-pd20100920-9FRMZ
 
Quote from macroman:

can anyone explain tax calc from article. Looks like i am not up to date.

I thought if one incurs 28K loss, then claiming the loss even at highest tax rate will cut it 50%. Report claims benefits are muvh larger :

-----
The report calculates that an investor who buys a $500,000 investment property using a standard 7.5 per cent housing loan is likely to face a negative cash flow of around $28,500 a year. But the property is likely to incur tax losses of more than $22,000 a year as a result of negative gearing and depreciation. This means that for an investor on the top marginal tax rate, the out-of-pocket expense of owning the investment property plummets from $548 a week to $126 a week (or approximately $6,500 a year).
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http://www.businessspectator.com.au...-Goldman-Sachs-property-debt-pd20100920-9FRMZ
More...

I have an investment property and interest payments run at about 20K per year. As it is a new property, I get 2.5% of the building value as depreciation which is $7,500 in the first year. $6,500 per year sounds about right to me. Remember, you only get a 50% deduction on the amount of your salary in the top tax bracket.
 
"Investors get daily home price fix"

http://www.smh.com.au/business/investors-get-daily-home-price-fix-20120301-1u4c0.html

In a world first, property-obsessed investors will be able to check house prices daily and trade on an index that tracks the ebbs and flows of dwelling prices across Australia.

The Australian Stock Exchange and property data providers today launched a capital city home value index tracking home prices in Sydney, Melbourne, Brisbane, Adelaide and Perth that is designed to be tradeable on the stock market.

The index, backed by property group RP Data-Rismark, will ''impute'' the value of all dwellings in Australia's capital cities and include daily price updates from homes sales across the country.
Advertisement: Story continues below

The index was developed to cater to the demand of investors - many of them overseas hedge funds - anxious to bet Australian house prices would eventually fall as they have elsewhere during the global financial crisis.

Although the indices are not tradeable yet, the Australian Securities Exchange is looking into products based on them, which would potentially allow local and overseas investors to profit - and lose - from bets on the where Australian home prices are going.

More information in the link above, and also at:

http://www.asx.com.au/asx/markets/propertyIndices.do

http://www.rpdata.com/research/rp_data_rismark_home_value_index_methodology.html

ASX Property Index Index Value for 01/03/2012
Gross Rental Yield for 01/03/2012

Australia All Dwellings 562.26 4.18%
Adelaide All Dwellings 424.90 4.29%
Brisbane All Dwellings 458.52 4.72%
Melbourne All Dwellings 599.93 3.63%
Perth All Dwellings 546.69 4.25%
Sydney All Dwellings 632.97 4.40%
 
sounds fancy but...

how will index remove effect of renovation ? Price graphs for au property are not excluding renovations therefore such large increases. Renovation is a major economic factor in au.

Prices may fall 40% however as people spend big on renovation index will stay unchanged :-)
 
can see considerable increase in listings around my area. Bit upmarket and stable. For rent signs have been temporarily removed as above average number of listings in place.
No sales yet though.

noticed as well sense of urgency to sell among middleclass property investors.

Stimulus quick, quick, or else :D :D
 
Australia: Housing market forecast to improve

The Residential Property Prospects, 2012 to 2015 report from economic forecaster BIS Shrapnel says New South Wales and the resource-rich states of Queensland, Western Australia and the Northern Territory are already showing signs of recovery.

However, the rest of the country - Victoria, South Australia, Tasmania and the Australian Capital Territory - will lag behind because of what the report says is an emerging excess of housing.

(More at above url)
 
in some place prices down 70%. but eastcoast capital cities where bank exposure largest will not go down.

aud advertising as reserve currency is primary goal of government right now.

another 2-3 years drift down maybe another 5-10 pct and then fall of AUD by 50% and then up we go again.

Steve Keen will have to take another walk

:D :D :D

if shorting aud, plan to touch 1.4000 usd so you can still go to mcdonalds for meal.
 
Quote from mm19:

in some place prices down 70%. but eastcoast capital cities where bank exposure largest will not go down.

aud advertising as reserve currency is primary goal of government right now.

another 2-3 years drift down maybe another 5-10 pct and then fall of AUD by 50% and then up we go again.

Steve Keen will have to take another walk

:D :D :D

if shorting aud, plan to touch 1.4000 usd so you can still go to mcdonalds for meal.
More...

umm they are going down, in real terms most capital cities are down 5-15%. The Reserve bank is doing something similar to the Chinese and trying to have a slow painless easing of asset prices... the era of getting rich by getting stupid with the banks cash and buying bits of brick and mortar are over
 
http://www.theaustralian.com.au/nat...rs-in-five-years/story-fn59niix-1226448737525

Q
Wanted: 800,000 workers in five years

by: David Crowe, National Affairs Editor
From: The Australian
August 13, 2012 12:00AM

THE nation must find 800,000 new workers over the next five years to ensure economic growth as a surge in service industries eclipses the resources boom, forcing employers to redouble efforts to find skilled staff.

The Gillard government has been warned of a coming structural shift in the jobs market as demand grows for professional skills, offsetting the expected loss of another 85,000 manufacturing positions.

UQ
 
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