The real cure to this problem is to find a way to reverse our urbanisation. Australia has basically either Mega Cities or small towns and very little in between. The simple answer to why in a land as under populated as Australia why there is land shortages is that most people want to live in the capital cities and most of them want to live in Bris,Syd,Mel. Governments need to find a way to make it attractive for business and people to move out of the mega cities and take pressure off them. We would fix a lot of other problems at the same time. Politics being what they are in this country another of the sort is likely to happen. The One party you would expect to be thinking about this (the nations) are too busy lining the pockets and filling out liberal party memberships forms.

If they restricted or got rid of negative-gearing, the housing problem (soaring prices) would be alleviated immediately. It would punish the greedy (serves them right) and lower prices to a more affordable level for the masses.

It would be interesting to know how many politicians own second or third houses. Perhaps that might explain the tardiness of successive governments over this issue.

David G, "If they restricted or got rid of negative-gearing, the housing problem (soaring prices) would be alleviated immediately"

Who will provide the welfare housing then David? Because government continues to back out of its responsibilities, relying on mum and dad 'investors', who sacrifice their quality of life to (hopefully) fund children's education and their retirement to shoulder its role.

Do you really believe that tired old spin largely put about by white shoe property spruikers about negative gearing subsidising the payments for the investment property? A loss is a loss and the owner have to fund it out of his own pocket and diminished lifestyle. The property owners also get to stump up for all outgoings to provide shelter and services 24/365 for someone else. That is a lot of risk and worry.

However, prices are driven by demand and the federal government has continually set new records for immigration without regard for housing, water, energy, infrastructure and sustainability. It is the Ponzi scheme to keep profits booming for the big end of town.

With prices going up by 20% in one year and rents soaring, I don't know which loss you are talking about, Cornflower (love that name)!

And who will provide the welfare housing. Same as now. No one!

P.S. I don't like the big end of town either.

Negative gearing causing the housing affordability crisis? I totally disagree. What is causing the problem is a lack of supply in the face of increased demand. Both causes rest solely with government and have nothing to do with negative gearing. In fact, negative gearing puts more money into the housing market, and so it should increase supply.

Two policy changes would end the housing crisis. First, a substantial cut in immigration would remove the enormous infrastructure burden for new home construction and government. A second measure of removing the substantial development restrictions on land owners would rapidly allow the construction of new housing to mitigate demand.

David G

All I can say is that if you can get those returns consistently go for it.

My experience is that investment in rental housing is labour intensive, is inflexible, delivers poor returns and the risks (and range of risks) are considerably higher than most property supporters are prepared to admit.

"Despite its faults, it [negative gearing]has at least brought billions of dollars of private capital into the rental housing market, without which, a great deal more Australians could be reliant on government welfare."

How so? Since over 90% of negatively geared homes were existing properties, how does it add to housing supply in any meaningful away? Make no mistake, property investors don't "provide" housing unless they build new homes. Those who buy existing homes don't add to the overall supply, but merely turn homes for sale into homes to let. This doesn't address the overall shortage. It doesn't even address the shortage of rental homes, because the reduction in the supply of homes for sale throws potential owner-occupants onto the rental market. So the full deductibility of negative gearing is not an incentive to "provide" housing, because it is available for existing homes as well as new ones.

The only real purpose negative gearing serves is to waste billions of taxpayers' dollars and inflate house prices by artificially increasing demand.

How so, Leith? Billions of dollars put into the housing market will inevitably lead to more construction. It does this by initially making housing more expensive, which in turn makes it more profitable to build new housing. Thus supply is increased.

The critical determinant of housing supply is in fact the cost of constructing a new dwelling. You can actually build a house meeting health and safety standards quite cheaply, and extremely cheaply if you use shipping containers. So why isn't there a heap of new supply being built? This is the case partly because local and state government severely and somewhat obscurely restrict the right of landowners to develop their land. It is also partly because the housing industry is being heavily taxed to supply some of the new and very expensive infrastructure for a rapidly growing population. Were Australia's population growth rate not so massive the supply of new housing would be far cheaper, far fewer new houses would be needed, and prices would plummet.

There is some very simple ways to increase the supply of new housing and the keep house prices stable and inflation low .
First cut out all speculation on existing houses by charging very high tax rates on investors who buy and sell existing houses for profits and give tax concessions to investors who put up new houses and units .
Because State Governments have been very slow in states like N.S.W in releasing land for development, a big shortage has occurred and also charging excessive development charges has caused many home buyers to buy existing homes over buying new homes .
The state governments needs urgently to have available more housing for low income earners , the simple solutions is that the government is sitting on billions of dollars of railway land .
What they should do is lease or sell all the land above railway stations and let private developers build on railway land on a basis of 90% housing units and 10% commercial and shop buildings .
Because all railway land is close to electricity , water , phone etc , it would be a quick procedure to build on and the buildings would need to be only 2 to 3 stories high .
Also in the process the railway stations themselves also could also be improved at no cost to the government .
The housing rental should be set a a percentage of the basic wage so the tenants could afford the rentals .
Also governments should also encourage the huge super funds to invest in housing by giving them a tax incentive .
Investment in housing is a sound investment because people will always need somewhere to live in the metro areas of Australian cities .Australia is not short of land , just drive between Sydney and Melbourne and 99% of the land is vacant .
There is no excuse for home and land shortages in Australia , we are not living in Hong Kong .