Bank boss joins strike over property prices

April 7, 2013 admin Australian Housing 18

Bank of Queensland CEO Stuart Grimshaw is just one of a growing number of individuals who can’t justify property prices in this country, and chose to rent instead.

According to the Courier Mail, Mr Grimshaw rents a home in inner Brisbane.

“Property in Brisbane is a bit expensive,” said Mr Grimshaw.

“Where I’ve looked to buy (here), I just couldn’t justify the prices.”

Read more here.

» Don’t Buy Now! Property Buyers Strike – Facebook.

» BoQ boss says Brisbane homes overpriced – The Courier-Mail, 5th April 2013.




18 Comments

  1. I have been following this blog for 5 years now and it has given me some great insight into the property market. I currently rent and have saved extremely hard in order to provide for my family and we have decided to now take the plunge and buy a house and investment property in Brisbane.

    Government laws will not change on property, this is clear from the latest tax law passed on superannuation. There is now no incentive for myself to save and put the money in a term deposit, invest in super, invest in the stock market, earning 4% per annum and getting taxed on my return. Negative gearing will not be scrapped as the baby boomers are in power and they are the ones passing the laws.

    The only incentive the government has given us is to buy our own home and invest in property. They know that this is the only thing that fuels consumption and keeps the Australian economy ticking over (besides mining). Even the tax laws for small construction businesses are geared up for this. That’s why tradies are now earning more than white collar workers.

    Unfortunately I have reached the point due to all the extreme tax laws that my only option is to now buy a home and an investment property in order to offset the huge amounts of tax I pay to a government.

  2. I am also a FHB but I will not buy a house as protest because I live in the hope that worsening economic conditions and budget deficits will force the government to adopt a more fairer tax system for all Australians and not just for a minority(home investors) as it is today. We can all force change ourselves and strike. DONY BUY NOW!!!

  3. Trouble is that 92% of property investments are for existing property. How does that help the tradies earn their $100k incomes??

  4. @ AverageBloke, I’m a tradesman, earn well over $100K per year and have never worked on a domestic house new or old and neither has anyone I work with or have ever worked with.

  5. Tradies on $100k incomes? Not in the last 3 years. And many of these tradies forget to tell you that they are infact employeed as contractors

    A: Highly illegal…Recent changes to company payment reporting laws will see many, many tradies hit with massive tax liabilities for understating incomes.

    B: Their actual gross income, after paying for their super annuation, insurances, workcover etc (most tradies do not in fact pay these so they are ripping the system off) paying for depreciating work vehicles, fueling, etc etc is usually equal to an ’employed’ income of way less than >$50,000.

    Many people will argue that these points are a load of BS. What ever I say. As someone who has a family business in construction and my own ventures outside of construction I know these facts are true. I know several guys whose actual income is equivilent to general award wages ie $17 PH.

    Anyways, @ Theo. I see today on ABC Insiders, it is speculated that the budget to be handed down in May will project deficits for the next 4 years. FOUR YEARS!

  6. Matty, I won’t say there’s any BS in what you say… but will add that in some cases it is worse than what you have quoted.

  7. @5. Matty, tradies have been on the ATO’s mind and hit list for the past few years. Not just tradies, also professional contractors that have their pty ltd’s set up alike, some with a trust structure in their mix as well.

    I think, as of two years ago, the ATO disallowed business expense deductions for sole trader/company structures that did not make a profit. There have been a few changes to company tax laws.

    My accountant told me as of a 2-3 years ago, the ATO have become more active in visiting such people and asking them questions like, “where did the money for this extension, pergola, swimming pool, spa, double underground garage, holiday house, …, etc”. Whether you can answer them or not, you may be up for a bill.

    Also, with tax agents, they do not need a warrant to enter your premises, and you are required to answer their questions, no right to remain silent. That law was implemented to bust drug dealer and stuff like that, but it applies to everyone.

    I know your points are not BS.

    @4. waiting and watching, there are many tradies waiting around for their phones to ring too. Look at what percentage of the workforce earns $100K and over, and percentage are tradies.

  8. @ FHB Dreamer

    In my opinion, the government can persist in holding up the house of cards only when the economy overall is working. Hosing industry is highly dependent on loans being available, and the loans are dependent on people’s ability to service them.

    Once the general economy is sputtering, and the unemployment starts ticking up, there will be a problem with servicing the debt, as people will not have any income coming in. The government can then do lots of things, like eliminate the tax on CGT completely, drop interest rates to zero (negative rates, in essence), provide huge incentives to FHB again, but none of these will matter.

    Why? Because of the nature of the government, any government. Governments do not create wealth, they tax the productive sector of society and re-distribute to the rest of the society in line with their policy/lobbyists.

    But when the productive sector of society starts losing jobs, and is unable to earn and pay taxes, the ability of the government to finance the rest of the society can only be fulfilled by either deficits or printing. Anyone’s guess how long will Australia survive in deficits/inflation scenario, but it is my belief that it won’t.

  9. There are many people turning up to Western Australia who cannot find work in the trades and building industry these days and are leaving again. There is a surplus over here now in a lot of cases and as people return from mining construction it will get worse.

  15. I’m in construction, residential, industrial, mining, oil & gas and we’ve noticed builders, fabricators calling begging for work in Perth. They are barely hanging on. Most of them have fired their apprentices and lowbies. I get calls from 3-4 companies/contractors a day seeking work. It wasn’t like this 6 months ago.

    You’re right in terms of prices being out of control. We are 31 and 27 respectively. Everyone and I mean everyone we know just spouts the same ‘buy but buy’ from the man on the street corner with his dog to the premier. It’s extremely unsettling that 80k in materials and construction costs end up making a house worth 800k… If that’s not a bubble nothing is haha.

    It’s pretty obvious someone has to absorb the capital hit when there’s either a crash or a zero return on investment and this people are the first home buyers who believe the ‘buy buy buy’ garbage. Bonds and overseas investment funds commission based with 0% tax is where it’s at!

  16. FHB Dreamer – I can’t blame you. I think you’ve made the right call and I’ve just done the same thing. The odds are heavily weighted against savers and stacked in favour of borrowing for housing and all it’s flow-on consumption. If you’re buying a house as a place to live for the medium to long term, don’t feel like you’ve been royally screwed price-wise, and are comfortable with the debt load, I think it’s a reasonable decision to take. In my case, I’ve bought a house that I think is reasonably priced and have a loan that will not cause me to lose too much sleep at night. Yes, I could have waited and hoped for prices to come down a bit further, but I think the macro settings are in place for a gradual increase from here. Prices are starting to move upwards pretty much as a result of rates being so low for so long. More rate cuts and (heaven help us) direct intervention from government, when it comes, is only going to accelerate things.

    While I agree with many other posters that the government can only keep the house of cards going for so long, you can be sure they will do so for as long as they can get away with it. And in reality, I think that is measured in years, not weeks or months. Governments in Australia really have no other choice. Anything other than modest falls in house prices would result in a recession and as we’ve seen with the Rudd cash splashes and FHOG boosts, governments will do almost anything they can to prevent a recession.

  17. Ralph, recession is here mate. Half of OZ is already in recession. QLD and NSW close behind. How can a government keep this circus act going with a deficit? They’re out of money mate. Think about it.

  18. @ Outback Josh, Ralph and Damo,

    Somehow, I like all of your comments. It reminds me of “Rove TV talk-show” haha ….

    I think all are valid points …. In my opinion, it comes down to a matter of choice.

    “Be Caveat Emptor”

Comments are closed.