australian housing - is it a bubble?.., page-13

  1. 11,875 Posts.
    Negative gearing and tax on deposits have caused a bubble
    in property

    if you stopped taxing interest earned on deposits and removed negative gearing you would have a bubble in bank deposits

    Only problem is the only money people have to move to deposits is stored in a house.

    Property is favoured in our tax system above everything else
    thats why we have plenty of spare capacity to inflate this bubble into epic proportions

    But when several (not just one) downward pressures emerge the party will be over. At this point I dont think interest rates alone will be enough - The RBA can drop them after all and re-inflate

    After all, blowing bubbles is just about all economists know how to do.


 
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