A simple thought, Negative gearing works because properties have risen so much in price...
if negative gearing was abolished in this years budget, property prices would not rise, rents would not rise (i think landlords would try ), i think prices would fall on properties in respect to yield...or effective return...
if properties were 30% cheaper... and rents were the same..new investmnet property buyers would be nearly positively geared.. And with the low interest rates, more renters would become buyers, so also government housing would not be as required as much, the government would also save money on the neg geared deductions,so its all fixed and we live happily ever after...
I think negative gearing (as well as o/seas purchases of australian properties) has caused a good % of the risein prices.. i amsure i will be shot down in flames now.....off for a tripple shot coffeee to wake me up
