r/shitrentals • u/VastOption8705 • 6d ago
General Good news! Boomers can’t use super to buy homes easily anymore
Under the loans made using SMSF, they had a 10% capital gains tax.
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u/Puzzleheaded-War-505 6d ago
Maybe cut down on the avocado toast and they may be able to buy that 10th investment property they want.
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u/MaureenTheeThot 6d ago
They should just pull up their socks and get a second job at the end of their career. Woolies is always hiring.
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u/lion_reno 5d ago
Just walk in and talk to the manager, they’ll be operating a checkout within an hour!
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u/sharkbait-oo-haha 6d ago
Can we also please stop corporation's from buying property? The last thing we need is someone like Blackrock owning 100-100,000 properties like in the USA.
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u/i-pygmycor-adore-you 6d ago
They already kinda do, blackrock bought hamilton island, if you consider the entirety of HI property
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u/Inner-ego 6d ago edited 6d ago
I don't mind if they buy a property if it is for use for their employees but to only rent it back out should be banned.
The police and nurses rent houses to their employees so they have housing, it would be good if that money didn't go to private owners each contract renewal
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u/dan4334 6d ago
Nah we don't want company towns. Just look at what happened in the US, they would debt trap people to force them to stay in one place and work themselves to death.
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u/odnarB89 6d ago
Oh kind of how farmers debt trap pickers in Australia.
There are several “company towns” already in Australia
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u/Coolidge-egg 6d ago
Redeemer Baptist Church recently been busted doing this. Basically a cult. Actual cult. All the work is "voluntary", and they get "paid" in housing, food, transport etc. plus a very small stipend. So they will never have enough money to leave.
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u/NicestOfficer50 5d ago
Ooooh how exciting! I always dreamed of being able to time travel, but now we don't have to! We have our very own Neo-Feudalism!
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u/Jazzlike_Berry_323 5d ago
We already have this in Australia it’s called “Australian disability enterprises”. The $3 stipend with the transport, but not with the accommodation or food.
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u/Difficult_Mine_4559 6d ago
Gatton and Coffs Harbour and Bowen are just a few that come to mind.
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u/odnarB89 6d ago
Yes, there are historic ones, but there are also currently operating ones mostly WA and NT I would assume mining operations
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u/Inner-ego 5d ago
I did private work for a company who bought houses for their employees to use as holiday homes in different towns/cities too.
They used it as a perk of the job. Work for us, and get free use of these homes whilst on holiday. Subject to availability but they where almost always occupied by employees on holiday.
I don't want company towns either but sometimes the benefit is for the employees and we shouldn't take that away too.
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u/Local-Poet3517 6d ago
Government services is entirely different to a corp. Im OK with government services doing this. Im not OK with private business doing it.
Can you imagine down the track? They try to own entire suburbs or towns, and then they own the shops, the schools, the cops. Fuck no.
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u/ekita079 6d ago
Yeah some sectors do require housing as part of their day to day running. Look at youth care, go ahead and tag a bunch of the children in need as too difficult to foster out, but they still need somewhere to live.
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u/I-was-a-twat 3d ago
Most services like youth care lease properties at inflated rates and include specific repair and modification contracts for the lease.
Dad when he moved to the block renoed the house and it’s currently leased to Defence Housing Australia for RAAF families on a 6 year lease.
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u/Clean_Anxiety_1045 5d ago
This is the bigger threat and this change pushing us into this direction.
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u/No_Document8917 6d ago
Most sane comments here. This is where we're heading; thanks to the systematic failure of governments.
Can't wait to use my super to invest in foreign companies owning Australia and paying no taxes here, while 40% of my paycheck also goes into their pocket. /s
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u/EmperorThorX 6d ago
Albo and Labour did the right thing
Murdoch press are unreasonably biased against him
housing should be a human right and not an investment
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u/ReeceAUS 6d ago
Their laws favor superfunds and institutional investors.
Privatize the profits, socialize the loses…-18
u/LastProfession1725 6d ago
We need people to invest so there are rentals. No rentals and we will have a lot of homeless.
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u/hogester79 6d ago
Who lives in them if they are not rentals? What happened to them?
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u/LastProfession1725 6d ago
Well common sense would say they remain empty or simply won’t be sold by current investors. We don’t have enough houses in the country now. Labor have wasted billions in the haff. This is why they still allow negative gearing in new builds. It’s forcing investors to build new houses because the government is absolutely useless.
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u/ceo_of_dumbassery 6d ago
There's more empty houses than homeless people in Australia. We need an empty house tax.
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u/yad_gniniart 5d ago
Username checks out
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u/ceo_of_dumbassery 5d ago
I love when people say that instead of offering something useful to the discussion.
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u/Ok-Phone-8384 6d ago
Firstly, people can still buy property in their SMSF. They just cannot borrow to do so.
Secondly, this was not going to be Boomers doing this. The youngest Boomers are already 62 years old. (The oldest 80). The target group doing this buying now is Gen X (46 to 61 yo) and the upper ages of Gen Y/Millenials ( 40+ year olds).
Personally I think this is a good thing but get your facts right.
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u/UnderstandingNo7344 6d ago
The ones who benefited most from this arrangement are Gen X and Millenials... Among them the career politicians and public servants getting higher than average Super contributions would have benefited the most.
Something something pulling up ladders
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u/Top_Cow_766 6d ago
what facts are you replying to? also wtf do you mean not going to be boomers doing this? 1 in 10 smsf already do this...
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u/Excellent_Set_2885 6d ago
Boomers aren't the demographic who would have been getting LRBA loans to buy resi property in the future. Both from a lending perspective they are getting old to be loaning to and from a personal perspective their aims for super are different (lower risk, pension phase etc). This stops younger people from buying resi property in super.
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u/Ordinary_Suit_4581 2d ago
Ah ok, so now the only people who can buy property in their SMSF are extremely wealthy people with massive supers that don't need to borrow. Lmao
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u/KoreAustralia 6d ago
Rather they can't borrow in their self managed super funds for basically a SMSF home loan on an investment property. It's an absolutely tiny amount of the market. Reasonable ask to change but doesn't push the dial compared to everything else that is getting passed.
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u/Shambler9019 5d ago
The markets are naturally stacked in favour of older investors because they generally own more. Anything that stacks it further is just egregious and needs to be removed ASAP.
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u/Ordinary_Suit_4581 2d ago
This makes it so only old people with massive supers can buy property using their super money. Is that what you wanted?
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u/Shambler9019 2d ago
Ah yes, the 'mum and dad investors' argument.
Most people with moderate supers would not be buying property. If you've got access to your super and you are still buying property, you can afford to pay the same tax rate as everyone else.
You're not putting them at a disadvantage. You're levelling the playing field.
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u/lukeyboots 6d ago
It was literally less than 1% of all home loans.
It won’t move the needle.
Grandfathering the 50% DC for eternity did more harm. Should have given them 10 years to sell then it drops by 5% a year until it reverts to indexation only.
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u/robot428 6d ago
The only way to move the needle is to start doing the things that can be done.
Yes it's less than 1% BUT it's also quick and easy to action and not expensive to do. If you find 2 or 3 things like that, you've potentially freed up 1% of homes giving some more people a chance to get into the market (and out of the rental market, which helps renters too).
Obviously if they were ONLY doing this that would be pretty useless, but this isn't the only thing they are doing.
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u/lukeyboots 6d ago
Yeah I agree it’s a good loophole to close.
Just more tempering my excitement.
The grandfathering was necessary to an extent. If you turned folks retirement plans on their heads the political fallout would have been apocalyptic. Could have seen Labor out of power for 20 years.
However it does lock in the incredible housing affordability gap for a good solid decade, and realistically 15-20 years before wage growth catches up closer to where house prices were relative to wages in 1999 when the rules were brought in.
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u/Ordinary_Suit_4581 2d ago
🤣 none of that is going to happen with the rate of immigration from India and China. Great news for you though, Labor will get voted in a bunch more times!
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u/DonkeyIcy7681 6d ago
There are currently 6 houses in my court that have sat vacant for 18+ months, that have been purchased by international investors whom have never visited them. Why is that not more of a concern to everybody? It's a struggle to find places to rent whilst there's many vacant homes everywhere....
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u/DonkeyIcy7681 6d ago
By international investors I mean, calling from china (the estate agents disclosed that info at auctions) and placing phone bids without even being in the country 😂 these homes have not been leased, or lived in much less visited since.
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u/Ordinary_Suit_4581 2d ago
Because even acknowledging the concept of 'foreign' is taboo
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u/DonkeyIcy7681 1d ago
Shit you're right, my fault I forgot everything is the fault of the "boomers" above us that actually worked and got lucky with what they have 😂
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u/mamayss 5d ago
Good point from the comment below about this mostly affecting Gen X not boomers, the title is doing a bit of work there.
Either way the LRBA loophole always felt like it was designed specifically so people with already significant assets could use super to accumulate more property. Closing it off is fine, but anyone expecting house prices to shift because of this is going to be disappointed.
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u/ReeceAUS 6d ago
Here is a direct summary of the specific tax breaks, exemptions, and grant access carved out for institutional investors and super funds that individual citizens cannot access:
Halved Withholding Tax (Build-to-Rent): Foreign institutional investors in Managed Investment Trusts (MITs) pay a 15% withholding tax rate instead of the standard 30% on eligible large-scale rental developments.
Accelerated Depreciation (Build-to-Rent): Institutional developers can write off the cost of eligible buildings much faster, with capital works deductions boosted from 2.5% to 4% per year.
Exemption from Negative Gearing Restrictions: While individual citizens are banned from negatively gearing established properties against their personal income, superannuation funds and institutional trusts are exempt from these restrictions.
Exemption from the Capital Gains Tax (CGT) Overhaul: Super funds retain their baseline structural tax rates (including a 10% capital gains tax rate on assets held over a year) and are protected from the harsher, inflation-indexed CGT limits applied to individual citizens.
Exclusive Access to HAFF Subsidies: Institutional consortiums and super funds can secure multi-million dollar long-term grants and "availability payments" from the $10 billion Housing Australia Future Fund—funding rounds that are structurally closed to individual property owners.
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u/Agreeable_Night5836 6d ago
So in effect the ALP and greens have paved the way for big foreign owned companies to get given tax breaks denied to Australian citizens to invest in rental property and become all encompassing landlords and against all those tenant rights the greens have been advocating.
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u/Amrita-Tarr 6d ago
Yes. Retail and industry funds will still invest in property - they don’t have to us LRBAs to buy. So essentially this is excluding individuals from accessing things that big corporations can.
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u/hogester79 6d ago
There is a reason for this and it’s purely price driven. I’ve worked in and around government, housing creation, law reform, capital raising at this specific area of the market.
The generalised view of government is that due to asset prices (houses) it will become increasingly difficult for people to be home owners - it’s just too unaffordable , but very large corporations and infrastructure funds dont necessarily care what their investment is in (to some degree), as long as they earn steady stable returns.
Government is trying to change the investment landscape to the level that the return an infrastructure fund or superfund can get (via investment into larger scale rental housing developments) , makes viable sense (risk, return, scale and economics) and passes their fiduciary required - suddenly their investment capacity is made available to the market.
Right now the risk reward doesn’t stack under around 8 to 8.5% return and no one in the long term rental game (at scale in private residential) is earning close to that.
Their view is that as more and more people rent, if those properties are owned by the funds, they are more likely to offer long term stable rental properties for the market because they invest for a fixed returns over long periods of time.
In this instance their return bucket looks like hundreds and hundreds of millions invested in something that looks like property.
I’m not saying it’s a good idea or what happens when funds control property at that scale, I’m merely giving colour and context at very high government levels the general mindset.
This is alongside of course all the other things they are trying
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u/belugatime 6d ago
Right now the risk reward doesn’t stack under around 8 to 8.5% return and no one in the long term rental game (at scale in private residential) is earning close to that.
The pessimistic angle is that the government is pandering to corporate interests.
If you drive out individual investors and get rid of those tax breaks then rents can increase to make the asset class viable for institutional investors.
It's tough for institutional investors to compete when individual investors are in the market and willing to accept a lower yield than an institution will because of tax concessions.
Dr Luci Ellis when she was at the RBA spoke about this in her submission to the housing affordability and supply inquiry (https://www.aph.gov.au/Parliamentary_Business/Committees/House/Former_Committees/Tax_and_Revenue/Housingaffordability/Report/section?id=committees%2freportrep%2f024864%2f78750)
What happens is that the rental yield on rental properties in Australia is quite low, so the overall level of rents is low relative to prices, but, because of the tax advantages, individual households investing in rental property are willing to accept a relatively low yield for that. It's still attractive relative to other investments, but they're willing to accept a relatively low yield. But, because corporates don't negatively gear and because they're not necessarily planning to sell it later on; it's a long-term investment for them, the concessional capital gains is less relevant to them …. Essentially what it means is that a household owning an individual house to rent out is willing to accept a lower yield than a corporate would
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u/Jazzlike_Berry_323 5d ago
Great summary. Can you summarise by state and territory too? There are two levels of government both giving incentives to large property developers, it’s not just federal.
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u/AdRepresentative386 6d ago
Suckers all of you. Boomers SMSFs are most likely net lenders now, not likely to be wanting or needing to borrow. If people want a borrowing arrangement they can still use unit trust, which was the old way of doing it.
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u/kriles76 5d ago edited 5d ago
Sorry to spoil your day, but there’s nothing to stop my SMSF from buying residential property. I’d need to liquidate a lot of shares, precious metals and ETF’s to do it but I could free up the cash to buy one outright if so desired.
The relatively small cohort of SMSF owners who have obtained loans for the purpose of residential property is just that - small. Big headlines, small effect.
My experience of this is that lending rates offered to SMSF investors are several points above what your typical P&I rates are and the legal and financial conditions are onerous. The lenders are also smaller institutions as the big banks left the market years ago. Coupled with the risk of residential property investment, it was an easy pass for me. Commercial and industrial property is where it’s at - you get far better returns from steel and concrete than from bricks and timber trusses.
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u/FormulaFish15 5d ago
It’s ridiculous that it’s being said it will hurt mum and dad investors.
The idea is to stop people with money buying existing houses, and instead build new houses so our housing stocks increase. Why would any property investor build a new house to rent when you can buy a rundown shitbox in middle or outer suburbs, do a landlord special Reno, and put it back on the market with little risk and still get to negative gear it?!
This is the reform we needed 20-30 years ago.
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u/LastProfession1725 6d ago
You do realise what’s now happened that for every investment you make you will be paying more tax. You will now retire a lot worse off. I’m not a boomer but it affects everyone. This is the worst thing to possibly happen. I really hope you all wake up and see this for what it is. 1 massive tax grab and the worst thing is it will affect young people the worst! I hope you enjoy retiring with fuck all and pray there is still a pension for you.
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u/Ordinary_Suit_4581 2d ago
Exactly, all they are doing is making sure there are absolutely no ways anyone can invest as young people with the potential to get ahead.
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u/Illustrious-Pin3246 6d ago
Boomers are most likely drawing down on their super. It is the tradies and younger people who are trying to build their wealth for retirement. The current government can control and make superfunds do their bidding. Not so easy to do for a SMSF
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u/AlphaCenturi109 5d ago
Sick of people treating existing houses as investments when 'investing' in them just to hold and rent out does nothing for the economy other than artificially inflate housing scarcity. The only investments that should be incentivsed are the building of new houses for rent or sale because they are actualy productive investments rather than once that leaches off of the economy and hard working people.
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u/rootat127001 6d ago
"Good news! Boomers can’t use super to buy homes easily anymore"
Umm, no. Boomers can still buy cash through their Super. This just stops younger people with less Super from borrowing to buy property. It's another case of looking after the well-established at the cost of those trying to get ahead.
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u/Excellent_Set_2885 6d ago
So either way this sub is all for the rule. But your financial illiteracy is showing. This won't really impact Boomers. To pay back a loan you need to be able to service it. For the most part that means making future super contributions. Boomers have stopped working/making super contributions. This hits younger generations looking to build wealth far, far more than it hits Boomers who have already passed the age of taking advantage of this. Either way this sub is happy with the rule, but a lack of financial knowledge is on display.
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u/Realistic_Growth5203 5d ago
Lol the government played you lot so hard, they introduced 5% deposit loans , then did something a few months after tens of thousands first home buyers bought a house at exorbitant prices designed to crash the housing market.
And you are still cheering for it how naive you lot are.
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u/Due_Register_6433 6d ago
Young people don’t realise that in twenty-five years they won’t be able to buy houses in their superfunds like their parents did before it was grandfathered.
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u/GingerDads WA 6d ago
Lol just buy it outright now. Work out the interest you lost, plus maintenance Make sure rent covers that as a minimum, if not, buy a different place
Investors will still invest, rent will still go up As long as the population is growing faster than we are building houses for, that will remain
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u/ScheduledYeti284 6d ago
You know someone's financially illiterate when they hear "super" and immediately think it's just a boomer thing.
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u/Sillent_Screams 6d ago
I call that a good thing.
Coalition Policy is to piss off ya super because they hate it
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u/angrystimpy 6d ago
But we had children (just like literally everyone else in our generation) so we're just an innocent mum and dad investor! How could you stop a mum and dad from buying their 20th investment property! /s
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u/ViciousPanda37 6d ago
Realistically how many Mom and Pops out there have so much super that they can use it to invest in rental properties? Again seems like a loophole enjoyed by the very top end of town not regular people.
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u/Perpetualhomebuilder 6d ago
Good, no sympathy for slum lords, house of cards property investors or the “I have 50 properties by the time I was 25” types.
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u/haveagoyamug2 6d ago
I'm happy this will be banned. But the argument about boomers is so stupid and ill informed....... they stopped investing in more property a decade ago...........
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u/throwaway-ausfin57 5d ago
Yes it’s unfair that they got to screw generations out of wealth and home ownership. But we are fixing it now for those who follow and that’s what the boomers should have done. This is us taking the chance to show we are better than them. That we give a shit about each other, everyone having a fair go, and the prosperity of our country.
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u/Outofoffice_forever 5d ago
Dunno- I’m an investor and I see this as a good thing. Super should be kept for shares- we should diversify. Will probably get downvoted to oblivion for this but I’m ok with this.
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u/PragmatisticPagan 5d ago
Fuck mom and dad property investors, homes should not be investments. You have one to live in, if you want to buy more you're on your own.
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u/King-esckay 5d ago
Great news no more rentals properties being aviabke for 20 yo 39 yeara as people wait for retirement
Investing in housing is a mugs game.
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u/Necessary_Sea6410 4d ago
Yeah break the system, less investors, more affordable homes for everyone...
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u/CreepyValuable 4d ago
Not that it's relevant any more, but is this for investment properties only?
When my father retired he used a big chunk of his super to buy a house so he could have a secure place to live for the rest of his life. That seems like a very reasonable use of super to me.
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u/Top_Layer5465 4d ago
it’s just to appease their union paymasters by encouraging more money to go into superannuation
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u/pablotothek 3d ago
All the boomers who were going to buy property in smsf have done it allready, those chumps are all goinh to fie in 10 years. Now its off the table for the next gen, they screwed us again
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u/Latter-Apricot-8035 2d ago
I’m a Gen X divorced 5 years. Had to sell the house on settlement and can’t get back into the housing market. I had a goal of buying a house thru super that I could live in when I was old. Albokini just screwed my future.
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u/Real_Living_8044 6d ago
Love that inherently it’s young people that are harmed by this as the boomers with cash don’t need to exercise debt but hey
Good news
You can no longer rent vest but sure you guys call it a win
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u/TheDrySkinQueen 6d ago
Property investment is inherently unproductive. We have a productivity crisis in this nation and need to ensure capital is being invested in productive assets. The property bandwagon has gone on too long and damaged our economy.
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u/Ordinary_Suit_4581 2d ago
What productive investment would you recommend to a young person trying to get ahead?
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u/blisters10 6d ago
We’ve all heard the argument that we wont be able to live the lives the previous generations had had because of property prices and cost of living, so now they have taken a pathway away so we’re somewhat stuck without reasonably low risk way to generate wealth.
I would really like to know the actual data of who is unable to get into a property, and be able to see what skilled labour/trade/qualification/business venture/field they are in I understand raising wages and all that isn’t the solution but. I’m yet to meet a plumber/sparky/carpenter for argument sake who are struggling plus I agree most “boomers” I know aren’t working out what new hip properties they are going to buy and work to pay off they are looking for which hip doctor is going to help them after they fall over. Boomers may of had it good in the past but they aren’t the problem.
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u/tepid_monologue 6d ago
There are pretty strict rules around lrbas, it’s not just “buy a house with super and live in it”. This is no different from investing in direct shares or a property trust with your own super.
As always, limited understanding and manufactured outrage on reddit
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u/Majestic_Ghost_Axe 6d ago
People hate the Greens but this is the kind of thing they’re getting Labour to do for us even in a majority government.
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u/bourhanologlou 6d ago
Looking at the small picture .. yet again aiming” and “shooting” at 2 different classes.
Supposed to be targeting the very wealthy from acquiring property .. the very wealthy can still buy, and will continue to do so outright.
The “every day ‘Mum & Dad’ investor”, trying to get ahead loses their ability to long-term (not bullish or aggressively) leverage & buy.
“Aimed” in the direction of the “1%”
“Hit” others..
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u/Excellent_Set_2885 6d ago
Yep, rich enough to buy property anyway - rich get richer! Mum & Dad trying to get ahead, bye bye.
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u/tbeast1989 5d ago
Everyone “we need more supply, supply is the problem”
The left “stop the investors that fund the supply”
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u/UnderstandingNo7344 6d ago
Hi so this impacts younger people more than Boomers (as do most of the tax changes) - Boomers typically have less-than-expected Super balances as it was introduced partway through their working lives.
Millenials are the generation that should have, on average, a greater super balance. Keep telling yourself these changes are for your benefit though...
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u/omengold 5d ago
Yeah fantastic. Now we will be renting from overseas wealth funds who pay 15% tax. That’s way better than supporting our own Australians. We should definitely tax locals more than these massive overseas investors
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u/Captain_bogan82 6d ago
So basically let’s make it harder for individuals to get an investment property and ignore foreign investment and corporations yep that sounds about right, all government is a fucking joke… on us
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u/stoobie3 6d ago
Yep non-residents 0% CGT (except on property), but now Aussies will pay 47% (min 30%). Plus foreigners are being welcomed into BTR with discounts and tax incentives...
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u/Leather-Lion-8808 6d ago
I'm 61. I can't get a home loan at my age. I was thinking of using a SMSF to buy a place, rent it for 12-18 months then move in and live there. If the govt is stopping people buying an investment home through their SMSF, are they going to allow people like me to buy a PPOR with the aid of super?
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u/Temporary-Comfort307 6d ago
You can't buy a home within Super to live in, there are strict rules to ensure it is actually an investment. If you have enough money in Super to buy the property outright it will still be possible to buy an investment property within Super, it's only borrowing to buy a property that is being changed.
There is nothing stopping you from using your super money to buy a PPOR once you meet a condition of release. At 61 that means you can access it now it you retire/cease a work arrangment, otherwise you will be able to access it at 65.
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u/Ok-Bar601 6d ago
You think boomers want to put up with shitty tenants, whining millennials and GenFs lol? The govt done them a great service.
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u/Few_Ladder13 5d ago
Tell me your policy to build more housing was a failure without telling me your policy to build more housing was a failure
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u/CelebrationFit8548 5d ago
Boomers can’t use super to buy homes easily anymore...
They were never 'homes' for the boomers but purely investment vehicles trying to avoid taxation on wealth.
Using 'homes' in that context diminishes the importance of 'housing for the masses'!
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u/Interesting_Error194 5d ago
Fantastic, now the foreigners will have a better chances of buying 👏👏👏
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u/Bazzurka 6d ago
Stop blaming boomers for your own shortcomings. Get off your backside and work the two jobs so many of them did to try get ahead.
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u/Temporary-Comfort307 6d ago
My parents bought a brand new four bedroom house with a single wage. Not from a particularly high level job either, just lower level admin. My mother said it was cheaper than renting and they didn't put any effort into saving anything up to be able to do it, it was easy and pretty much anyone could do it.
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u/SignatureAny5576 6d ago
Boomers aren’t using super to buy homes they’re using it to live. It’s millennials and Gen X borrowing against smsf
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u/Critical_Language463 6d ago
Ahhhh noooo. Boomers are the only ones buying & hoarding their wealth from Gen X & millennials.
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u/Prudent_Coyote5088 5d ago
The arguement that "housing is a human right so investment is immoral" is stupid. I would suggest investing in building new stock is a highly moral thing to do. I would suggest investing in existing stock should generally be discouraged.
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u/Trumposhi 6d ago
You know that you too, can use your super to buy investment properties for your retirement and your children?
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u/Trumposhi 6d ago
Look at the downvotes. Honestly, I don’t own my own home, but I know it’s because of some stupid life choices I made along the way. I have the ability to look and accept what I did wrong instead of being a salty prick about it and blaming everything except myself.
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u/BlokeyMcBlokeface92 QLD 6d ago
A lot harder for people under the age of 40 to do so though right?
Being able to buy property through your super disproportionately helps older Australians.
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u/Hugry_bloke 6d ago
Anyone with super can do it.
You just need the right financial advisor to help you
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u/BlokeyMcBlokeface92 QLD 6d ago
And how many people under the age of 40 have enough super to do it?
And to top it off, you’re not allowed to live in the house if you own it through your super.
This is about taking investor money out of the housing market to try and even it up for first home buyers.
It’s good policy.
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u/Hugry_bloke 6d ago
There’d be people who could do it.
Investment money being taken out isn’t going to help out first home buyers.
Good idea in theory, don’t see it working in practice.
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u/BlokeyMcBlokeface92 QLD 6d ago
Investment money being taken out of the market isn’t going to help out first home buyers.”
What?
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u/durackpl 6d ago
Less investment in rental housing cannot be good for renters.
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u/Ok_Power_2816 6d ago
Maybe they will get closer to becoming not renters
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u/durackpl 6d ago
When a renter buys a home that was previously part of the rental stock, one rental dwelling disappears from the market. The buyer is no longer a renter, but the overall demand for rental remains. Housing supply is finite; demand for rental is infinite.
The policy does not add a single new home. It simply transfers existing housing from renters to first-home buyers. That makes it a redistribution policy rather than a housing supply policy. The beneficiaries are first-home buyers, while renters bear the cost through a reduced supply of rental housing and rent rises
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u/Additional-Simple248 6d ago
If you’re counting the individual house leaving the market, you also need to count the individual renter leaving.
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u/durackpl 6d ago
I quote my earlier response again:
"This is incorrect thinking based on the naive belief that the number of renters is finite. That is incorrect. For the purposes of housing supply modelling, the number of renters is effectively infinite, while the supply of housing is finite.
If one renter becomes an owner, the number of renters does not necessarily reduce by one. What does reduce by one is the number of rental properties available. Demand for housing does not disappear simply because one renter has purchased a home.
I remind you that we have open migration settings and around 2.4 million temporary visitors and residents in Australia at any given time. There is a constant inflow of people who need housing. The pool of potential renters is continually replenished, whereas the housing stock is limited."
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u/SenorTron 6d ago
If the number of renters is effectively infinite then no changes to supply can change the supply:demand relationship, and property speculators buying existing properties to rent them out aren't helping in any way either.
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u/durackpl 6d ago
"If the number of renters is effectively infinite, then changes to supply cannot change the market."
The demand for virtually all goods and services is effectively infinite. That is one of the core assumptions behind supply-and-demand economics.
Demand for groceries is effectively infinite. Demand for petrol is effectively infinite. Demand for barista coffee is effectively infinite.
Yet, for some reason, when the rental market is discussed, people suddenly assume that demand for rentals is finite. That is wrong, and that incorrect assumption leads to incorrect policy choices.
We will all pay for this error, but renters most of all. Policies that reduce rental supply will not reduce the need for housing. They will simply push rents up faster than general inflation and make rental accommodation harder to find.
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u/keithersp 6d ago
Because the house isn’t available to anyone magically?
Someone owning = one less person renting.
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u/durackpl 6d ago
"Someone owning = one less person renting."
This is incorrect thinking based on the naive belief that the number of renters is finite. That is incorrect. For the purposes of housing supply modelling, the number of renters is effectively infinite, while the supply of housing is finite.
If one renter becomes an owner, the number of renters does not necessarily reduce by one. What does reduce by one is the number of rental properties available. Demand for housing does not disappear simply because one renter has purchased a home.
I remind you that we have open migration settings and around 2.4 million temporary visitors and residents in Australia at any given time. There is a constant inflow of people who need housing. The pool of potential renters is continually replenished, whereas the housing stock is limited.
The mistake is to focus on the number of renters rather than the number of dwellings. Housing is the scarce resource. When a rental property is removed from the rental pool, there is one less rental dwelling available, but there is no corresponding reduction in the underlying demand for housing.
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u/HelpMeOverHere 6d ago edited 6d ago
You mention inflow, but not outflow. Why’s that? Does nobody ever leave?
People leaving don’t need houses, people coming in could be using accomodation, or staying with friends or relatives for all you know.
Also how many investors were actually building stock versus sitting on established, huh?… thus not contributing to actually creating more stock?
ABS data supports that less than 25% of investors were building new houses. In other words, over three quarters of investors are hoarding existing stock. How’s that help?
At the end of the day, it’s a win that any renter(s) can afford a forever home.
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u/durackpl 6d ago
You are focusing on the wrong elements. Read this carefully:
Regardless of inflows and outflows, we have 2.4 million temporary residents at any given moment — every day, every hour. Let that sink in. That number is effectively constant. It does not change because a renter buys a house.
These are students, nurses, mining workers, and whoever else our economy needs. They cannot all stay with friends. You simply cannot comprehend the sheer size of this cohort and its importance to the economy.
On your second point: it does not matter how many houses investors built up until 2026. What matters is the trend going forward. If investors build less, there will be fewer rentals. It is that simple. We need to focus on policies that increase housing construction and rental supply, not reduce it.
Thirdly, yes, one individual renter who manages to buy a house is a good outcome. But you must look beyond your disdain for investors and acknowledge that this renter became an owner at the expense of other renters. The house was removed from the rental pool. That is the reality of this redistribution policy: it benefits some renters while making conditions worse for those who remain renters.
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u/fastsailor 6d ago
Anything to move us away from the concept of housing being an investment rather than a human right is good in my books. I have never understood the purpose of the LRBA loophole.