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Episode 196 | Q & A – Negative Gearing Changes – Should I Still Invest in Property?

“Labor risks $12bn housing hit over ending negative gearing” — if you’re like us folks… this headline has us all concerned!!

And the concern didn’t stop at the headline.

As we read on, the full news article, published by The Australian on the weekend, highlighted that the $32 billion plan to end negative gearing would — quote — lead to a fall in new housing construction of up to 42,000 dwellings over five years and 32,000 fewer jobs across the country, according to independent modelling — end quote.

Yep… that’s a drop in a whole lot of new housing construction (ie. supply) AND just a-bit-more-than-a-few losses (up to 32,000) in jobs!!

Folks… this is crazy stuff.

And those stats aren’t the only ones coming out of recent independent research digging into the numbers of what’s likely to happen if negative gearing’s ditched.

So, today we’re looking at a few of the worst-case scenarios from two different reports (the links to both of these are further down in the show notes) and unpacking — with both a short term and long term view — how this change to negative gearing might affect the property market and those investing in it.

But negative gearing changes — and the possible consequences on housing prices and for first home buyers — isn’t the only question we’re answering today! We’ve got plenty of gold on how to time your exist strategy, retiring debt and the right asset to invest in!

 

Oh, and if you’d like the Geospatial Heat Notes — the heat map that shows the Compounding Annual Growth in Median Value for Houses from 1974 till the end of 2017 that is sourced from the Valuer General data —  you can get them here.

 

Back to today’s Q’s…

Question about Negative Gearing Changes from Shadi:
Hey Bryce and Ben. Thank you for all the information and for all the podcasts you provide. Apologies in advance if this question has been answered in previous episodes. I’ve been binging myself since episode 1 a few months ago, and am not quite up to date yet. I just have a question specifically about the abolishment of negative gearing and the impact it will have on first time investors. I’ve been looking to invest since listening to your podcast, and am interested to hear how this will affect my first purchase — whether or not it will just be a short term problem that effects cash flow or if it will have a long term effect, especially when entering the market.

 

Question about Your Exit Strategy from Anne-Marie:
Hi guys, this is Anne-Marie in Victoria. I’m 56 and my husband is 51. I started listening to you many years ago after we had our 7 properties. Our last property was 3 years ago. There all on fixed term interest only, which makes no offset available to them. And we’ve paid off our home, which is worth 1.1 million (1 of the 7 properties). It takes us $13,000 a year to hold all the properties, we just put our tax in, which is amazing. So property has done really well for us, and the mortgage we have on all of them is about 2.5 million, with domain value being low sitting at $3.9 mill, and high $5.2 with middle there all about 4.6 million. I want to start going into doing less hours at work — I’d like to retire on a passive income in maybe 4 years’ time. How do you transition to get the passive income we’ll need for retirement without too much of a tax liability? I paid about $10K in tax this year and I really don’t want to be paying a lot of tax while I’m getting to this point. Can you give me any pointers? And I can’t have an offset account as I said. I’d like some advice on this.

 

Question about the Right Asset for a First Home Buyer from Carrie:
I have a question about the best type of asset you should invest in. I’m looking to buy my first property, which I’ll live in initially. I have a budget of $750K. I’ve been looking at 70s and 80s free standing villa units in small blocks of 12 – 6 in Melbourne’s east. This puts me in middle ring suburbs around 20km from the city, with a land size of 350sqm. It’s a good balance between decent landmass without being out in the sticks. Alternatively, I could by a 2bdrm apt in an older, low density block — the type with only 2 or 3 stories closer to the CBD. Are either of these good investments? And which of the two is better? Or is there anything else I should look into. Love your work guys, keep bringing out those podcasts! Thank you

 

 

The Articles Ben mentions:

The Australian Article — Labor risks $12bn housing hit over ending negative gearing

Housing Industry Association (HIA) — Media Release

 

Episode 163 | Infrastructure: What’s the Game Changer for Property?

We’re going off the cuff today, folks! Yep, there’s been no prep behind this podcast… BUT we guarantee it’s still going to be golden!

Why?? It all started (yesterday) when Ben created a little pop quiz for the staff at our company… and his question is:

What is the No.1 infrastructure needed to grow property prices?

Based on the banter that spread through our office, the answer might also surprise you!!
So, let’s drill it down to these two points:

  1. How are megacities built?
  2. What’s the connection between infrastructure and property prices?

 

Here’s the deal:

 

Stick around for Ben’s Did You Know … you’ll find out the projected population growth for Australia’s cities (this might influence where you invest!)

Missed our Facebook Live yesterday?

We announced a Free Live Webinar — The 7 Deadly Sins of Building a Property Portfolio: The hidden habits undermining your success (and how you can overcome them)”!

You can register for the Live Webinar here.

 

P.S. This episode’s a true glimpse of what an overheard convo between Bryce and Ben sounds like! Gold!!!!

 

 

Episode 151 | Is Bitcoin a good investment and what are the Final Budget Changes on Tax Depreciation?

There are so many things to be excited about in this week’s episode!!!

First of all, PICA IS FINALLY UP! Remember a few weeks back (Sydney expo) when Ben gave you a sneak peek at setting up a not-for-profit association for property investors by property investors? Well, it’s official now … and it’s time to unite and make our voices heard. It’s time we take action to ensure our property investments are protected, now and into the future. So make sure you check it out! www.pica.asn.au

(Membership is only $5 a year or $20 for 5 years! Find out more about PICA’s Membership here.)

 

Following on from this … the most drastic change impacting property investors significantly is the recent depreciation changes. On this year’s Budget Night, 7:30 pm AEST on the 9th of May 2017, the Government proposed quite some changes to the tax depreciation schedule. We’ve talked about these changes before with Bradley Beer, CEO of BMT Tax Depreciation back in Episode 117.

Since then, the Government has finalised on some of these changes and has decided that some of the proposed changes will not go ahead after all. But what are the finalised depreciation changes? That’s why we’ve invited Brad back into the studio today for a quick update!

 

And finally… Bitcoin.

It’s the No.1 trending search word at the moment.

So, are we for or against it???

Let’s talk.

So, what are you in for?

  • What depreciation changes did the Government finally decide on?
  • Who will be affected and who WILL NOT be affected?
  • What happens if you purchase an existing property after the 9th of May?
  • Will you be able to claim tax depreciation now, and is it still worth get a tax depreciation schedule done?
  • Are commercial properties affected by this change?
  • How can your accountant help with your claim?
  • What’s the definition of “Substantial renovation” in this new ruling?
  • Will Capital Gains Tax be affected?

and of course, on Bitcoin…

  • What is Bitcoin to start with, and why is it so trendy now?
  • Are there other cryptocurrencies out there?
  • Can they be used as a valid currency?
  • Will this last?

 

Don’t forget the Free Resources mentioned:

  • Brad’s previous appearance on the Couch — Episode 117
  • Ben’s Did You Know Tips can be found here.
  • Access to PICA (Property Investors Council of Australia) — Subscribe here
  • BMT Tax Depreciation Application Form – Fill in the form below to download or click here

 

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P.S. Ben’s Webinar Impact of Interest Only Lending is out! Make sure you check out your Throwback Thursday newsletter. Haven’t subscribed to our newsletter yet? Download the Money SMARTS and you’ll get it 🙂

Bonusisode | Listen everyone… This Is Serious!

Housing Affordability. APRA. Investor’s Lending. Super Property Deposit Debate.

These are headline news for the last few weeks which have been monopolising the business section of most press for some time now. So, we don’t think we can wait any longer either!

Now, what did they chat about today? You would be expecting conversation around the long-term sustainability of the Australian Property Market, an upcoming correction and who will be affected; APRA’s move on investment lending; changes on interest-only loans and how it will affect some borrowers out there; implementing Money SMARTS during these times; relationship between migration and the economy; the Superannuation Property Deposit Debate and more.

Let us forewarn you that this Bonusisode is not as light as our usual episodes. This time, Bryce and Ben discuss some critical housing and political issues and as usual, the commentary in this show is general in nature and is an opinion comment by both of them. It does not take into account the particular investment objectives or financial situation of any potential listeners, and you should always consult a qualified professional advisor before making any investment decisions.

Some of the references made in this podcast are:

 

If you like this podcast, don’t forget to rate us on our iTunes channel (The Property Couch Podcast) and our Facebook page. If you have any questions or ideas, feel free to drop us your thoughts here: http://tpcaustralia.wpengine.com/topics/.

Episode 085 | Is NOW The Time To Invest In Property In Australia?

Are you into economics, numbers, trend lines and the Property reports released by CoreLogic? If you are, this episode is just for you! It can be a bit heavy and we recommend you to download CoreLogic Monthly Housing & Economic Chart Pack for October 2016 to have a full understanding of what Bryce and Ben would be talking today. Their focus is on Page 10 of the report, titled Investor lending is picking up again as owner occupier lending fades a little.

Bryce and Ben are also a bit concern about the current market’s movement and if we are heading towards a bubble-like scenario. If so, would now be a good time to invest in property? Tune it to find out more!

 

PS: They will also be talking about the recent article Ben contributed to Australian Property Investor Magazine regarding Timing vs. Time in the Market and the differences between these investing concepts!

 

Free resources mentioned in this podcast:

  • CoreLogic Monthly Housing & Economic Chart Pack, October 2016 – Download here
  • FREE Tickets to the Sydney Property Buyer Expo (Coupon code: PBE16BRYHOL) – Get them here

 

If you like this podcast: “Is NOW The Time To Invest In Property?”, don’t forget to rate us on our iTunes channel (The Property Couch Podcast) and our Facebook page. If you have any questions or ideas, feel free to drop us your thoughts here: http://tpcaustralia.wpengine.com/topics/

 

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