|
tickleandrose
|
Well.. I have to say.. with a bit of regret, that I am a beneficiary of negative gearing (and not capital gains - yet as I have no plans to sell). The rent is actually set by the market, from supply and demand. Yes, if supply is effected then rent will rise. But the degree of rise will depend on if people can afford it. You can dream about renting a 1 bed apartment for $3000 a week, but, if no one can afford it, then good luck. And as of now, with high cost of living, it is difficult to milk much more increases.
I am also on the other hand concerned about ongoing impact of negative gearing. In the past, I had wanted to start a small business of my own - a child care centre with some of my friends. We went to the bank, but the bank would only lend me less than $100 000 on commercial interest. So it was not viable for me. However, at the same meeting, the bank manager informed me, that I am able to secure 500 000+ in loans if I buy a property and rent it out. And he went into details about negative gearing. So needless to say... I choose the easier way out with help from parents of course. .
As an individual, this is beneficial for me for sure. But as a society, I am not so sure. Instead of encourage business activity, with perhaps 200 000 (the original amount that I was hoping for) invested in a small business that employs people - ie. something productive. Now, its 520000, tied up in a second hand property that is a non productive asset for the nation. Is this truly good for Australia as a nation? Fruit for thought.
|
Forum
Pages: 1 
