I wasn't talking about the supply of housing or negative gearing in a general sense. Many people think that if NG for investment properties is abolished then it would force those investors to sell at reduced prices(forcing down the prices of homes). Some, who cannot afford to hold due to the loss in the tax break(because they were too highly geared, etc) would undoubted sell. I doubt that there will be too many distressed sales as banks now have tighter lending policies in place since the 2008 GFC. The bulk of those property investors still in the market and generating those $13.2b losses have already been increasing rents slowly.
The reason why there is a loss for any property is because it costs more to hold that property than is received in rent, that is, what I referred to as "subsidised rent". The landlord is meeting 70% and ATO 30% of the loss(based on 30% marginal tax rate).
These private investors(landlords) are presently, subsidising(70%) the lifestyle of the renters. In a way, renters should be grateful for the current situation IMO.
