It is clear that Labor is looking to drive down house values by saddling investment in it with lead bags compared with other asset classes. I don't yet see any mention of equal treatment this policy brain-fart by envious ideologues.

This forces housing investors into forming companies so their operating losses on investment in older homes can be carried forward. This is a disincentive while NG against income remains for alternative investments. Investors will cease to respond to the demand for housing until the return on it is sufficient to outweigh the existing negatives and Labor's new impost.

In this scenario, new housing will not be built by investors until return on investment (rent) rises sharply.

Government will need to provide what privateers will cease to, affordable rents for the less well off. This will be by building more public housing or by subsidizing rental of private stock, all at great expense to the public purse.

Fortunately, Labor, which is shortly to be beholden further to the Greens by voting changes to the Senate, has Buckley's of winning an election while Turnbull is in the chair

What is not considered by "think tanks" such as http://www.afr.com/news/politics/bis-shrapnels-negative-gearing-report-is-manifestly-ridiculous-20160302-gn8sv0
is investor motivation. What are you going to get for your newly built negatively geared house when you want to sell it? A price on this uncertainty has to be factored into an investor's business model. The resale market will be much slimmer than it is now as a result of Labor policy, but how much will this depress house prices?

IMO, rents will have to rise by somewhat more than 10% BEFORE many investors dip a toe into that water. I'm deciding whether to sell or keep my rental. On one hand, under Labor policy (when they eventually get back in), it's value would fall while, on the other hand, rent would rise as housing supply slips behind demand. Any new investment I make will be in negatively gearable assets without the resale uncertainty attached to housing.

Yes Luc, I have a high value asset that is positively geared and im considering selling this so an investor can 'lock in' on Ng while its still on the table. I would then buy two or three cheaper rentals as these, despite being negatively geared, will most certain enjoy a much higher yield should Ng get the chop simply because rents will skyrocket, and I mean, Skyrocket.

These fools have no idea of the damage they can potentially cause to about the only sector that is doing quite well.

Governments are notorious for dropping bomb shells on property investors, like the way they caused shock waves through the super industry by making it unlawful for funds to borrow, or for owners of commercial units to rent their own units.

Because governments are on such shaky ground these days, its only a matter of time before the likes of labor get back in with their hair brained ideas like this one.

I agree, skyrocket, and after that new investors will return to the market. Gov't will be supporting with rent assistance and more public housing. Investors who already hold property will suffer a loss in value.

A 5-10% loss on a substantial property can be a lot more than can be recouped in a rent rise over 5 years, say. A crystal ball would be handy.

Once things get bedded down life will carry on, as it does in the rest of the world where there is no NG, but the transition will see winners and losers. The winners will be the buyers getting property at prices depressed by uneven Gov't policy on investment in income producing assets, the losers will be the sellers.

Luc, the other problem that may occur is that the banks may get a bit 'gun shy' with their lending, and insist that the borrower take a great share in the risk, which may see lending be limited to 60-70%, rather than the usual 80% as is the case now.

So if a buyer is wanting to buy a home to live in, rather than having to save say 20% of $500K, they will need to save 30% of say $400K, which would equate to $20K more.

I say this because banks take into account the prospects of 'getting out' of a property when taking on a borrower. With investors gone from the used market, the buyers simply wont be there, and if they are, they wont buy unless they get at least 8% return, which means that $500K house, that's now $400K will have to rent for almost $700 per week.

This is such a potential disaster this policy if it were to get in and those who hate Ng for the sake of it just don't get it. But they will

As for government assistance, I agree, but where will the money comne from?

More good news, Butch, when your house value goes down the rental yield goes up, without even raising the rent. Everyone kicks a goal,everyone's a winner! Bring it on!