Seer, A more likely scenario is that there is a short term spike...

Seer,

A more likely scenario is that there is a short term spike in rents. Rents are determined by supply and demand remember not what a landlord needs to achieve to be positively geared.

You'll then likely see a slow fall in sales prices as investors start to retreat from the market and sell negatively geared property. At the same time tenants will be tempted to purchase so they will leave the rental market. Eventually sale prices will come back to a level where the net rental return makes it attractive for investors once again.

Short term pain for long term gain. High property prices only benefit the banks, investors and to a lessor extent the government (as they end up having to deal with the mess that high property prices cause the general population).