Indy, you're inconsistent. You support wealth creation but not through investment in residential real estate, which you want to see nobbled through abolition of negative gearing.

Would you see a world of owner-occupiers with the rest in private rentals (in diminished supply once the current negative-gearers sell up) and public rentals, with some given rental subsidies?

This would require high taxation to support the level of public housing purchasing and construction made necessary. How will owner-occupiers and unsubsidized renters go with that? Quite a socialist's position, yet I've read you previously as a conservative.

Actually, current negative gearers would not sell up assuming abolition was not made retrospective. However, as only positive-gearers might thereafter invest, the rate of growth of private rentals would be lower than the rate of demand growth. The outcome is the same, public housing must make up the rental shortfall.

"current negative gearers would not sell up assuming abolition was not made retrospective"

I disagree because many of the investors are on relatively low incomes. For many the second spousal/partner income qualified for the loan/s (that second income could easily change), their employment is often casual or temporary, and they are finely balanced, almost insolvent. Some money back each year from ATO is what made the investment possible and it part covers the replacement of those expensive items the motivational speakers and books didn't tell them about, eg carpets, HWS and so on. However without these 'investors', for whom there is possibly a lot of churn, there wouldn't be nearly as much renovated and new rental stock available.

Would the properties they invest in be built or saved from demolition otherwise? Probably not.

That is why I believe that a run of mums and dads investors from investment property market is easily possible. It is a wonder it hasn't happened already. The reality of the present downturn is sinking into the consciousness of smaller investors and many must be waiting to sell, but are in too deep to let go at present.

slightly off the topic but the idea of Government building more and more homes is laughable. Having elderly in laws who have had to wait long periods of time to get into care while detention centres catering for thousands of illegals are built overnight.

slightly off the topic but the idea of Government building more and more homes is laughable. runner,
Builders should build houses. Governments should ensure that its citizens have a quality of life (aren't we such a great country after all ?) which makes it possible for them to have a home built. To by a block of land, do absolutely nothing to it for several years & then sell it for three or four times or more than the original price may be called investment. In my view it's extortion. As I stated earlier the investment fiasco is heading for that brick wall. Then they'll be crying poor again. They don't cry poor when they overcharge a young, start-up family. I know this is how it has been working for a long time but that doesn't make it fair.
I say do away with all these loopholes , bring on a flat Tax & see who the real economic experts are. I believe Gerard Depardieu went to Russia because the Tax rate is a maximum 13 % there. Just you wait & see where Russia will stand in 10 years & where the rest of the world will be with it's shifty system.

Crikey, Indy, did I have you pegged wrong as a conservative!

A young family can do well if prepared to move to where housing can be afforded and find employment. It's a free market and everyone has to start somewhere.

Are you suggesting Gov't (i.e. all of us) should build a home for everybody? Who gets to live on the harbour and who in the western suburbs? I know, we'll draw straws to settle it!

Russians don't seem to be really enjoying their economic system