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> Make it prohibitively expensive to own a property but not live in it. How does this decrease my rent? I do not want to own property because I do not want my

> Make it prohibitively expensive to own a property but not live in it. How does this decrease my rent? I do not want to own property because I do not want my entire wealth invested in a single asset. For me, renting is ideal and then my money goes in to a wide array of assets which provides a better safety net than expecting that house prices will always stay the same or go up in the future. Renting also affords me the ability to move whenever I feel like upgrading or downgrading without being stuck trying to sell the previous property and paying insane taxes each time.

ilammy 5y ago
> because I do not want my entire wealth invested in a single asset That's the idea: with cheaper real estate you won't have to put your entire wealth into it, trading it would also be easier, and so ownership would be more attractive option.
- SilverRed 5y ago
  I don't see how this is possible. The building I live in cost about $100M in construction fees and has 200 apartments. If we make a dumb assumption that they all cost the same amount, thats $500k per apartment on just cost of building before any kind of supply and demand affects the final sales price. These apartments sold new for $600k and I rent one for $480 a week. (All Australian dollars) Currently I would comfortably put $20,000 in to housing as an asset. I can not see any way possible that banning rentals would allow me to buy a $500k construction cost apartment for $20k. So this change forces me to invest in a market I do not want to invest in to. Buying one of these apartments is an incredible risk as it will likely devalue over time and be difficult to sell on when I want to move. So every time I move under this system I am risking massive losses Vs just having a weekly price and no commitment or risk.
  - rgbrenner 5y ago
    I plugged your numbers into this mortgage calculator[0], and it looks like the payment on a 30 year loan of 500k with 20k down @ the average interest rate is less than your rent payment.... and you'd then be able to sell the asset when you move. It doesn't sound like your landlord is doing you any favors. 0. https://moneysmart.gov.au/home-loans/mortgage-calculator https://moneysmart.gov.au/home-loans/mortgage-calculator
    - SilverRed 5y ago
      The thing is, I don't want to buy this apartment. I don't trust the local builders enough for that and I believe that it will devalue faster than my rent payments. I also don't plan on living here for more than a few years. That calculator puts me at $537/week in just loan repayments for 30 years and does not include strata fees, council rates, sewerage fees, building insurance, etc. To buy a property means paying tens of thousands in taxes each time you buy. If I stay here for 2 years and sell I would pay more in just taxes than the entire rent would have been and I am on the hook for any issues with the building or changes in value. And I am perfectly happy to pay a known weekly amount which is well within my budget and put my savings in to other investments which don't tie me down to living in a particular place, do not require taking out multi decade loans and are easy to sell back for cash later.

ilammy 5y ago

> because I do not want my entire wealth invested in a single asset That's the idea: with cheaper real estate you won't have to put your entire wealth into it, trading it would also be easier, and so ownership would be more attractive option.

SilverRed 5y ago
I don't see how this is possible. The building I live in cost about $100M in construction fees and has 200 apartments. If we make a dumb assumption that they all cost the same amount, thats $500k per apartment on just cost of building before any kind of supply and demand affects the final sales price. These apartments sold new for $600k and I rent one for $480 a week. (All Australian dollars) Currently I would comfortably put $20,000 in to housing as an asset. I can not see any way possible that banning rentals would allow me to buy a $500k construction cost apartment for $20k. So this change forces me to invest in a market I do not want to invest in to. Buying one of these apartments is an incredible risk as it will likely devalue over time and be difficult to sell on when I want to move. So every time I move under this system I am risking massive losses Vs just having a weekly price and no commitment or risk.
- rgbrenner 5y ago
  I plugged your numbers into this mortgage calculator[0], and it looks like the payment on a 30 year loan of 500k with 20k down @ the average interest rate is less than your rent payment.... and you'd then be able to sell the asset when you move. It doesn't sound like your landlord is doing you any favors. 0. https://moneysmart.gov.au/home-loans/mortgage-calculator https://moneysmart.gov.au/home-loans/mortgage-calculator
  - SilverRed 5y ago
    The thing is, I don't want to buy this apartment. I don't trust the local builders enough for that and I believe that it will devalue faster than my rent payments. I also don't plan on living here for more than a few years. That calculator puts me at $537/week in just loan repayments for 30 years and does not include strata fees, council rates, sewerage fees, building insurance, etc. To buy a property means paying tens of thousands in taxes each time you buy. If I stay here for 2 years and sell I would pay more in just taxes than the entire rent would have been and I am on the hook for any issues with the building or changes in value. And I am perfectly happy to pay a known weekly amount which is well within my budget and put my savings in to other investments which don't tie me down to living in a particular place, do not require taking out multi decade loans and are easy to sell back for cash later.