Trickle down housing

 

 

 

 

https://www.3cr.org.au/economists/episode-201810031730/trickle-down-housing

Karl rides the gauntlet analysing the state of the Australian housing market with some of our key indicators on show. Hopefully they reflect on the building momentum and provide a perspective on the state of the economy. As always, we like to think they reflect the reality of the situation. How have we been conned into believing yet again another form of trickle down economics? Surprising we haven’t put that together previously eh re housing! Karl also delivers some news regarding the future of the show.

I am no expert in accents, but did I detect a bit of a kiwi influence in Karl’s?

"I am no expert in accents, but did I detect a bit of a kiwi influence in Karl’s? "

Your ear is better than mine; I didn’t notice it.

It’s difficult to talk meaningfully about the country’s housing industry, as local conditions, and markets vary. Housing In South Australia tends to be considerably cheaper than in say Victoria and New South Wales, which are bigger markets.

In the recent election, part of labor’s platform was to abolish negative gearing on investment property.

A couple of problems with that: it’s been tried before. The result was an immediate downturn in the Australian housing industry and a shortage of rental properties…

Although apparently aimed at foreign investors, abolishing negative gearing hits small investor, with a say 2 or 3 properties. I have a friend in that position who said that policy caused him to vote for other than Labor, for whom he usually votes.

Rule of thumb in my state; In dormitory suburbs such as mine, capital gains tend to be around 5%. Go up market into the posh suburbs and the return is closer to 12%

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Oh, imo trickle down economics is a myth invented by the rich to keep the working classes in their place. The message is simple and not subtle; wait and good things will happen to you.

 

PAT D says

 

" couple of problems with that: it’s been tried before. The result was an immediate downturn in the Australian housing industry and a shortage of rental properties"

There is no evidence for this

'There is no evidence for this"

I think you may be right. I just did a quick search. All I could find was a CLAIM ( by a politician) that rents went up when negative gearing was abolished in the 1980’s.

I must have been relying on memories of the time. I’m finding more and more that memories going back decades tend to be unreliable.