Restricting Negative Gearing
The debate over negative gearing continues. It is now being suggested that wealthy property investors should be excluded from making open-ended tax deductions. From figures published by the ABS such a move would only impact a small number of investors. In 2015–16, one in five households, or 20%, owned one or more residential properties other than their usual residence. Of those households 72% owned only a single property, while around one in twenty households, that’s only 5% owned four or more properties. However, there’s a catch in that we risk reducing the supply of rental accommodation if investors are discouraged from the housing market.
Are Sydney or Melbourne over populated? This is a question often being asked and it’s even been suggested that Sydney is already ‘full’. However, figures published by the think tank Demographia in its Urban World Areas Report shows some interesting figures. By international comparison our major cities are among the world’s biggest in area, but lowest in density. Dhaka Bangladesh has the highest population density at 45,700 persons per square kilometer. Sydney’s density is 1900 persons/sqk, with a density ranking of 936 and Melbourne’s 1500 persons/sqk, a ranking of 955. While quality of life must be considered, along with infrastructure, it does look like there’s still ample room for population growth.
Landscaping a Wise Choice
Given our climate it’s not surprising that home buyers place a big focus on outdoor living. There has been a trend of extending indoor living to the outdoors. Balconies, terraces and courtyards are popular with individual apartments and townhouses. These areas are being designed with clever lighting, wireless/internet connectivity, pergolas, privacy screens, decks and built-in seating. Outdoor areas add value and make apartments more desirable. Building common areas are also very important and are in high demand, including rooftops and high quality landscaping. City dwellers might not wish to spend their weekends mowing lawns but they’re keen to have access to outdoor space. Trees, gardens, walkways, outdoor seating areas and lighting can increase a projects’ appeal.
The True Cost of Housing
It is often quoted that spending more than 30% of household income on housing places people under mortgage or rental stress. Figures published by the ABS would suggest this is true. According to the ABS, in 2015-16 on average households spent 14% of their gross weekly income on housing costs. This had not changed since 2009–10, while the proportion of gross weekly income that home owners with a mortgage spent on housing costs remained stable at 16% in 2015–16, having fallen from 18% in 2013–14. Renters continued to spend 20% of their gross income on housing costs in 2015–16. Based on these figures housing cots at 30% or more of income do look very high.
Try Shared Ownership
Shared ownership can help buy a home but it’s a concept that only has limited uptake in Australia. In other countries, the idea is more common like in the UK where housing associations allow means tested buyers to buy a share of a property of between 25% and 75%. Homeowners are charged a monthly rent by the association for the remaining cost of the property while their deposit and property accrues in value. Similar schemes area not far off in NSW however, South Australia and Western Australia are the only states that currently have state based share schemes. Generally, providers would only sell to buyers that meet certain financial criteria so that monthly mortgage repayments do not exceed 30% of the household income.
Would you like a home where your vacuum cleaner talks to your sound system, and between them they turn down the air conditioning and you freeze! Along with Amazon’s Echo there are a multitude of gadgets that will soon manage almost every function of your home. It is no longer sci-fi fantasy, but the idea is that household tech by connecting it to your wi-fi will save you money and time. Worldwide devices like Alexa, which powers Amazon’s Echo devices are gaining popularity.