Fifty percent of those who buy an investment property sell up in the first 5 years. Put another way - most Australians who get into property investment never achieve the financial freedom they aspire to, and worse still many property investors lose a heap of money and lost opportunities along the way. Michael Yardney shares some thoughts on how not to fall into that category.

Nhan Nguyen has some advice for those wanting to get into small developments. How to find the sites and carry out the feasibility and more importantly, how to minimise your risk.

Design guru and star of Selling Houses Australia, Shaynna Blaze returns to share some thoughts on her business and we get to see another side of Shaynna.

The Mortgage Choice Annual Investor Survey has found that investors are being affected by lending restrictions introduced by the banks. What sort of restrictions have the banks had to make and how does this affect borrowers?  John Flavell, Mortgage Choice Chief Executive joins us to outline what is happening.

The Real Estate Institute of New South Wales has called for an end to stamp duty, but how realistic is that? Institute president John Cunningham has called the tax unjust, inefficient and market distorting and he joins us to look at the alternatives.

 
Transcripts:
John Cunningham - Stamp Duty should be abolished
Kevin:  Stamp duty is one of those conversations that comes up all the time when we talk about affordability, and the different regimes for stamp duty around Australia are really quite amazing when you do look into it.

Recently, the president of the Real Estate Institute in New South Wales, John Cunningham – who is my next guest – made the statement that he believes Stamp duty should be abolished around Australia. It’s probably not going to happen, but I’m interested to get your view on that.

John, good morning, and thanks for your time.

John:  Good morning, Kevin.

Kevin:  You’re probably a bit surprised to see just how different the stamp duty levels are around Australia state by state.

John:  It’s absolutely extraordinary, and I think one of the issues we have in Australia is that there are no level playing field on much of the legislation or taxation, particularly where it’s levied from the states. Therefore, it’s pretty confusing.

Kevin:  It’s interesting, too, to note that stamp duty is being called a wealth tax, but it’s one of those taxes that is levied against anyone, even first-home buyers. If you’re looking for ways to make it affordable, that would be a good place to start, I would have thought.

John:  Absolutely. There are two measures of stamp duty that are quite critical. Obviously, the higher you go in price – which is into the wealth area – the more tax you pay. This is an interesting concept that a lot of people don’t realize. In New South Wales alone, the median house price now means that you’re paying something like 4% average of the purchase price. So if you’re going to save 20% as a first-home buyer, you’d have to stump up another close to 4% to actually secure the property. It’s a massive inhibitor, particularly for that first-home buyer.

In New South Wales and in many states, there is only relief for new dwellings, and as you and I both know, 95% of first-home buyers actually buy established housing, so there are not a lot of advantages there.

Kevin:  Speaking about first-home buyers, it would be a great way to give them some leverage into the market if they abolish it for first-home buyers, but it raises the other question, too, of what we’re now seeing as “rentvestors” – these are people who will rent but go in and buy an investment property as their first property purchase.

I think it was Mortgage Choice said that about 36.6% of first-home buyers are actually investors, so it really makes it difficult to say, “Well, let’s abolish it just for first-home buyers” for that reason, John.

John:  That’s a really t