Dear Hasbeen,

Houses are made of bricks and mortar: no amount of money bills can build a house, so ultimately, the number of people having their own homes is not determined by finances but by the availability of resources: land, bricks, metal, builders, etc. It is also determined by the demand, eg. by population increases and by the required building standards.

As for land, see Arjay's comment.

Metals are expensive due to the export market.

Builders are scarce because most of them work in mines.
With the remaining builders busy making new houses, it is also so difficult to get someone to repair old houses that more old houses have to be destroyed where they could otherwise be repaired, what a waste!

The amount of effort and materials that needs to go into building one family home is also increased by the piles of government regulations.

One way to lower house prices would be to import temporary builders from Romania. Romanians have an excellent skilled construction workforce and are willing to come and work extremely cheaply. If government allowed them to be contracted for 2-3 years, we would have more houses than we need (provided there is land). This of course will not happen because it goes against Labor's ideology.

I understand it's hard to wean out of borrowing habits, but once the crisis is over, as in the old days, families would accumulate money and support their children getting their own houses, which in turn will support their children, etc.

As has been says, in a round about way, people today typically want THE HOUSE not A HOUSE and this is where most of the problems with home ownership come from.

Like it or not, NG has helped keep rents down, so it stands to reason that if it's taken away, and not replaced by a benefit of similar values, the housing availability will get worse, much worse.

I note the author has gone very quiet on the topic.

I agree with David L. Tenancy laws make being a Landlord extremely onerous. State Governments use landlords to abrogate their own public housing duties. Tenancy tribunals actively work to make landlords PAY in lost rent to keep fringe dwelling single mums and drug addicts housed for as long as possible, at no expense to State governments.

State privacy laws make it impossible to do thorough checks and every landlord has been stung.

Further its not just the money loss its the minimum 2 months time and worry.

State governments would have heart attacks if they couldn't palm off this social duty. Unsuspecting landlords are IT!

This is why negative gearing will NEVER be canned.

You can State Bank on it.

You would have to change the Constitution to eliminate state governments before negative gearing could be abolished.

Its a layer of government increasingly prone to corruption and self serving behaviours. Witness Barry O'Greiner and Keneally to Carr in NSW! The other states are worse. Cut out the middlemen. And That is all state govts have become since Federation.

But one thing. For a Federal <-> Local Govt system to work, parliament must sit in every capital city on a regular basis. Canberra is too remote and sterile to be up to the task of governing a complex and vibrant nation. You always end up with back stabbing unaccountable snakes like the ALP-Gillard & LIB-Abbott. Not because they are idiots or BAD people but because they are suffocated and isolated too far from the real action. They are so so hated by most Australians that they have become Hawkish traitors to their own people. They feel their only hope is to transfer taxes away from Aussies to bonus and tax-favour foreign immigrants and unborn children for the political salvation of their Parties and indeed their very own souls.

They, like negative-gearing, are more to be pitied than LOATHED

The government in the past has looked at abolishing negative gearing.

It would become too expensive and unrealistic for the investor to hold the property as the tax deductions are not sufficient to make the property cash flow positive or even cash flow neutral in terms of costs to the investors which are high.

It was thus found that two things would occur if this went ahead.

Investors would either flood the market with the properties meaning there is less housing to rent. The government would have to provide more government housing which would cost more than the tax rebates given to investors. Remember also that there is 50% capitol gains tax the government receives when the property is sold so it is worth the governments while to support negative gearing.

The other scenario that would be likely for investors who do not sell up are they would raise the rent in order to be able to afford the property making the already overinflated rental market even more over inflated and this would lead to hardship for renters.

Another issue is that the building industry would be negatively affected.

I am quite amazed that the writer did not do his research before making such a song and dance out of this

In my experience landlords charge as much rent as they can get, whether or not they are positively or negatively geared.
They are not altruistic. So rents will only go up if renters are willing and able to pay more.
All landlords should only be able to claim back 15 cents in the dollar regardless of their tax rate and only for new builds.