The Grattan Institute was formed in 2008 as an ‘independent think tank’ intended to develop public policy for Australia. This week there has been a lot of media commentary about a publication by the institute addressing housing policy in Australia. Renovating Housing Policy was published on October 20th and states:
This report looks at our complex housing system as a whole. By quantifying the major government outlays on the private housing system, it reveals the cumulative impact of housing policies both on individual choices of where and how to live, and on productivity and inequality in our cities.
The initial part of the report examines some fascinating trends and demographics related to home ownership in Australia, there is interesting data presented on the change in home ownership rates over the last 100 years as well as examination of current ownership rates by age as well as earnings. It then continues on to look at renting in Australia and it is from here that the information presented starts to become increasingly relevant to property investors. There is also significant focus within the report looking at the different government support provided to property owners versus those who rent a home. The report states that support for residential property investors costs $6.8 billion a year,or about $4,500 per year for each investor household. If you want to skip to the really interesting part though I’d suggest heading straight to page 36 where the recommendations commence. There are three main recommendations looking at stamp duty and property tax, reform of tax incentives for property investment and also reform of the private rental sector.
Whilst I certainly don’t agree with all of the proposals there appears to be some strong evidence available to support the statements being put forward. What I have found interesting is the way that it has been portrayed in a range of media and particularly the comments that have been posted by readers. I’d be eager to hear people’s thoughts on this as it would have a significant impact on property investors should these recommendations be put into practice. Don’t be afraid to comment below! Click here to read the article.
You can also check out some of the following media articles, don’t forget to check the reader’s comments, it’s certainly stirred up some debate!
The Age property section – Domain
The Herald Sun
Your Investment Property Magazine
If you’ve been watching the news over the last few weeks then you may have seen the unfortunate news about the city of Detroit in the US going into bankruptcy. It’s estimated that the city is in debt to the order of $18 – 20 billion. When looking into the history of Detroit and it’s decline over the years it’s fascinating to see the effect of the auto industry and the impact it had when things went offshore and downhill. In the 1950’s Detroit had a population of over 1.8 million. Between 2000 and 2010 it’s stated that the population dropped by over 25%. From the height of the 50’s it’s now estimated to be just over 700,000. The impact that this has had on real estate is on one hand amazing but on the other most likely disastrous. Below are a few currently listed properties that you could pick up for a steal. Click on the pictures to see more.
- Last sold in June of 2004 for $59,000, this 3 bedroom house that is close to 100 years old has dropped by an astonishing 93% and is now on the market for $4000, yes you read it correctly, $4000! With the agent’s website listing a potential rent of $742 a month I can’t say I’ve ever seen a property with the potential to pay itself off in 12 months. It does awaken the skeptic in me though…let’s explore some more.
- If you’ve got a few more dollars to spend then this following property may be of more interest at $12,000. It’s also got 3 beds and 1 bath but by the looks of it could do with a bit of work. Also, these houses could be in any type of area but this one does come with a virtual tour. I’m afraid that the music accompanying the pictures doesn’t add an awful lot.
- The final one here I think is really pretty stunning considering what you can get when choosing to spend a more significant amount of money on a property. With 4 beds and 2.5 baths it’s amazes me that for $50,000 you can get what looks to be a completely livable home with spectacular grounds. The street-view on the website looks great…what’s the catch?
There are plenty of catches I’m sure with the purchase of any property in a once thriving city which has halved it’s population, is filing for bankruptcy and has an unemployment rate of around 16%. A simple investigation into property in Detroit will reveal that there are thousands of empty homes throughout the city and that the council has struggled to provide basic services due to over half of Detroit’s property owners failing to pay their tax bills. It’s a sorry state of affairs and one can only hope that a city such as this can recover.