Comments on: Grants distort lending in the housing market http://www.crikey.com.au/2009/03/12/grants-distort-lending-in-the-housing-market/ now with extra source Sun, 12 Feb 2012 02:48:10 +0000 hourly 1 http://wordpress.org/?v=3.2.1 By: John M http://www.crikey.com.au/2009/03/12/grants-distort-lending-in-the-housing-market/#comment-12446 John M Thu, 01 Jan 1970 10:00:00 +0000 #comment-12446 What a load of twaddle! Shares don't depreciate??? Looked at your super lately? How's your Centro shareholding? Cash depreciates , too. It's called inflation. You have also completely ignored capital gains. Here's my example, from Northwest Sydney. The land value as given by the valuer general was $60000 ten years ago. Today it's $150000. Inflation (roughly) 22% over that time gives a 2009 dollar capital gain of around $77,000 on the land alone. <br /><br />Yes high end properties have fallen, but there was a lot of "bubble" in their valuations, and it seems a greater number of distressed vendors. Reasonably priced housing seems to have less of the highs and lows. What a load of twaddle! Shares don’t depreciate??? Looked at your super lately? How’s your Centro shareholding? Cash depreciates , too. It’s called inflation. You have also completely ignored capital gains. Here’s my example, from Northwest Sydney. The land value as given by the valuer general was $60000 ten years ago. Today it’s $150000. Inflation (roughly) 22% over that time gives a 2009 dollar capital gain of around $77,000 on the land alone.

Yes high end properties have fallen, but there was a lot of “bubble” in their valuations, and it seems a greater number of distressed vendors. Reasonably priced housing seems to have less of the highs and lows.

]]> By: Stefan L http://www.crikey.com.au/2009/03/12/grants-distort-lending-in-the-housing-market/#comment-12447 Stefan L Thu, 01 Jan 1970 10:00:00 +0000 #comment-12447 House prices and rental charges are seriously discordant (and have been for a long time). Home purchasers rely on inflation and capital gains to make their payments progressively more afffordable. Investor landlords rely on these and also on negative gearing. All very good in a rising economy but not sustainable in a flat economy and a recipe for disaster in a recesssion/depression. <br /><br />Imagine how much healthier our economy and society would be if high schools taught some fundamentals of personal finance. House prices and rental charges are seriously discordant (and have been for a long time). Home purchasers rely on inflation and capital gains to make their payments progressively more afffordable. Investor landlords rely on these and also on negative gearing. All very good in a rising economy but not sustainable in a flat economy and a recipe for disaster in a recesssion/depression.

Imagine how much healthier our economy and society would be if high schools taught some fundamentals of personal finance.

]]> By: chris http://www.crikey.com.au/2009/03/12/grants-distort-lending-in-the-housing-market/#comment-12448 chris Thu, 01 Jan 1970 10:00:00 +0000 #comment-12448 I just wrote this long winded comment but when I submitted it I was asked to enter my username and password again, and all was lost, so I will summerise:<br /><br />- the FHOG will be Australia's subprime mortgage disaster.<br />- Construction companies will be the only ones to benefit from it both at the construction stage and they will buy back the housing at a cheaper cost.<br />- Buyers will be left on the street and with a massive debt as unemployment rises.<br />- Lending instituations will have to increase their bad debt provisions.<br />- Howard/Rudd governments, the RBA and lending institutions will be to blame.<br />- We do need personal finance taught in secondary schools.<br />- Property prices historically do fall, don't be fooled by the last 16yrs.<br /><br />Damn having lost my first rant it was a lot better.<br /> I just wrote this long winded comment but when I submitted it I was asked to enter my username and password again, and all was lost, so I will summerise:

- the FHOG will be Australia’s subprime mortgage disaster.
- Construction companies will be the only ones to benefit from it both at the construction stage and they will buy back the housing at a cheaper cost.
- Buyers will be left on the street and with a massive debt as unemployment rises.
- Lending instituations will have to increase their bad debt provisions.
- Howard/Rudd governments, the RBA and lending institutions will be to blame.
- We do need personal finance taught in secondary schools.
- Property prices historically do fall, don’t be fooled by the last 16yrs.

Damn having lost my first rant it was a lot better.

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