Why are people here acting like the budget was bullish on housing?
Firstly, this post is not me speculating on the direction of home prices in the near or long term, I'll leave that to the punters, and it isn't about the 30% min CGT (which I too think is dumb). This post is on basic economics.
The budget announced increases in effective CGT paid for 99% of investors and the essential removal of negative gearing for new loans on existing homes. This, undeniably, does two things:
- Dramatically reduces the incentive for property investors, bringing in a worse environment than even pre-2000.
- Reduces effective cashflow for IPs, again both reducing incentive and borrowing power.
The bullish sentiment comes from people speculating that families and individuals will now "ppor-maxx". Was the Australian public all not doing that already??? Are you telling me that the average Australian was being conservative/rational in how much they borrowed for their home?? In how much of their assets/networth they tied to their ppor??
Don't make me laugh, literally every other post on this subreddit for the last decade (and especially the last few years) was on the best/safest ways to save ASAP for the largest deposit, on how to borrow the most. Literally every thread had a dozen brokers telling you how/where/what.
So back to the title, we've knee-capped the largest source of demand (speculative investors) for real estate, and somehow that's bullish? How exactly are individuals whom are already maxing out their borrowing power (which is reducing now with increasing interest rates) and pouring every asset into buying, going to magically come up with even more capital and more borrowing power to make up that shortfall in demand?
Is everyone here just a coping 30-something with an IP in the sunshine coast or the outskirts of melbourne?
AI was not used to generate this post.