Daggett “Regarding negative gearing: to me it seems unfair that people paying off their own homes are not allowed to negatively gear whilst people, who buy homes that other people need to live in, are.”

Following such reasoning would presume that every family car should be as depreciable as a vehicle purchased exclusively for business purposes

or

the food we eat is as qualified a tax deduction as the food purchased for resale by (say) a deli or restaurant.

Your point is not really about negative gearing at all but about “tax deductibility”.

The Australian Tax system, like all “tax systems”, distinguishes between purchases and expenses made in the pursuit of gain (investments), separate to purchase and expenses incurred for personal consumption.

Thus -
A business using, say, a plumber, to fix a water system in its building can claim back the GST and the tax deduction it incurs on its repair costs, whilst a personal individual having their water system repaired by the same plumber could not.

Stamp duty paid on the purchase of an investment property is a deductible expense whilst the stamp duty of an owner occupied property is not.

Oh and on the flip side, an owner occupied property is exempt Capital Gains Tax, an Investment property will, possibly, incur CGT on disposal.

If you want to argue the “fairness” of negative gearing, you need to understand the basis which creates it.

“It seems inituitive that abolishing negative gearing would make the purchase of houses cheaper”

Something wrong with your intuition if you believe that, remove buyers from the market and prices will fall – but at the expense first of available rental properties and thus increase tenants rental charges.

“Public Housing” might seem cheaper but a lot of people are intent on paying the premium not to live in the inevitable squalor which chronically besets public housing estates.

I guess “Public Housing” is fine, unless you actually have to live there.

And as for your "hissing fit". If you thought that was a “personal attack”, you obviously do not know me.

daggett, one small question.

Why France?

I downloaded the SPA report that you seem to put such confidence in, and read as much of it as I could without causing damage to the furniture in my office.

Nowhere in the report could I find one single credible justification for the comparison of our housing market and that of France.

They have 60 million people in a land mass of half a million square kilometers, we have 20 million in 7.6million square kilometers.

And the very thought of comparing Paris and Sydney is mind-blowing.

Have you ever been there? Has the author of the report ever been there?

It is a nonsense, pure and simple. Laughable.

If this is your standard of evidence, I'm sorry, but I just cannot take you seriously.

Ms Newman also compares a number of other countries.
Regarding France, some reasons of many are:
Housing in France (and much of Western continental Europe) is very affordable in comparison to Australia's.
France started out with similar policies of population building to Australia's after WW2 but dropped them in 1973 after the first oil shock.
Australia started out with similar housing policies to France's after WW2 but dropped them with the ascent of Menzies, when it privatized most housing, simultaneously starting to import many immigrants, on which the housing industry came to depend. But France did not privatise and so, although it continued to import population for some time, the housing industry was not reliant on this.

Historical similarities and later differences in policy and outcome provide good contrast.

France and Australia have good demographic statistics back to the French Revolution (1789) and in Australia to 1788. Both have good documentation of their housing starts. But Australia's housing industry is full of booms and busts, whereas France had its first boom only in the mid 1990s.

Australia’s problems are in its land-tenure system. France’s strengths in hers.

Pericles’ comment re the difference between the total populations and land areas seems pointless.

France and Australia have both grown by a similar number of people since 1945 but in Australia's case this represented two thirds of its population and in France's case, about one sixth. Good compare/contrast.

Why is the thought of comparing Paris and Sydney mind-blowing?

The author, a fluent French speaker, went to France (Paris, Dijon and Mers-les-Bains) four times during the five years of research, which was supervised by a French Professor of Contemporary French History & Demography. She liaised with INED, INSEE and interviewed housing professionals, politicians and authors.

Sounds like Pericles, unable to come up with specific criticism, is blustering to cover the fact that the material presented by S.Newman is so far beyond the usual fudge that passes for research in housing that he is totally out of his depth.

If this is Pericles’ standard of critical review, then Ms Newman has little to fear.

Col Rouge’s defense of land-speculation is unconvincing. Public housing need not be low standard. It should be designed as it once was, to cut the costs to worker and employer and to put them close together through good planning. Unfortunately Australia has lost its way in this.

If Australia had good low cost public development for both public and private housing then this would put Australia in a much better situation to compete economically with countries which do not have to subtract our land-costs from their business profits. At the moment the only way many businesses can find a profit margin is to chisel workers. High housing/land costs in Australia are the main reason that we have a huge foreign debt and have great difficulty competing on the world market with our goods and produce.

Kanga wrote "The author, a fluent French speaker, went to France (Paris, Dijon and Mers-les-Bains) four times during the five years of research, which was supervised by a French Professor of Contemporary French History & Demography. She liaised with INED, INSEE and interviewed housing professionals, politicians and authors."

That seems to be an awful lot of trouble to go to just to arrive at what appears to be a predetermined conclusion, backed up with conjecture (and those fancy, but meaningless, charts) rather than factual evidence. But I wasn't driven to destruction as was Pericles, as it gave me many hearty (and stress-relieving) belly-laughs.

Dagget, I notice you ignored my questions. Now that further evidence is emerging of negative house price pressures, I wonder how long it will be until falling national median prices prove (according to your theory) that our population is in decline...

Back to those charts again, it is worth noting that the bulk of the boom in rural areas occurred AFTER the city boom and AFTER 2002 when he charts were created. Take Victoria, the VGRs office reported median rural values rose by 20% in 2003 as Melbourne’s boom was petering out. In 2004 and 2005, rural prices rose by over 10% pa. I would suggest that if those charts were updated with the last 4 years worth of data, they would look rather different. Incidentally, France had house price inflation of 14.5% in 2004, and 12.9% in 2003 according to The Economist.

Regarding France, they have property taxes, rent controls, right to housing, tax on vacant second homes, the landlords charter, a low, flexible and individualised personal taxation regime, lease tenure security and right of pre-emption on sale, wealth tax, succession tax, quarantined mortgage interest tax deductibility…

Not quite apples and apples. Still, if somebody would just pay me to travel around the world 4 times to conduct further research… ?