Negative gearing has only ever been about tax dodging, it was never about supplying rental houses. Countries without neg gearing have plenty of rental houses. What neg gearing and capital gains tax concessions do is encourage investors into the market which pushes prices higher. And so now we have government grants to first home buyers to help them enter an unaffordable market which pushes prices even higher. The same house in most regional areas costs about one third of what it costs in a capital city. So what comprises two thirds of the value of city houses ? A big fat nothing in real terms, it's purely what the market will pay rather than any intrinsic value.
