Yeah, property certainly isn't the great investment that it once was. It really doesn't make much sense to be borrowing to the eyeballs, having to fork out for upkeep/maintenance, rates/utilities, etc, then paying a whole lot of land tax as well. It's the lure of capital growth though that keeps investors interested. There's a lot of people who still believe you can't lose from property, that it always goes up in value. They forget that the huge growth of the last 15-20 years has been largely fuelled by cheap money - lower and lower interest rates.
I suspect though that paying a bit of land tax will be the least of people's problems soon. The RBA has dropped its line about being patient with inflation and interest rates, and it's very likely that we'll see the first of a series of rate increases in June or July this year. When prices fall equity will evaporate, and negative equity (when you owe more than the property is worth) will be a very real thing.
