I see this topic has once again raised it's head.

So, my question is, if we do away with NG, where will people live as there will simply be no incentive for investors to buy houses.

So let's say as a result of this change, if it were to happen, the everage home dropped in value by say 20%.

This means a $400K home is now $320K but, the banks would also be less likely to lend the full 80%, with the balance of risk being taken up by mortage insurers, as the true value of the home would have to be proven, so those who can't afford a home at $400K, won't be able to afford one at $320K as the deposit is what kills most buyers, not the loan repayments as such.

One reason why people can buy a home with mortage insurance is because there are buyer (investors) out there and, the lenders know that, should they default and get sold up.

Investors often have several properties, so they can get the money to buy as the risk is spread,which makes the lenders feel comfortable.

Take these out of the equation and I,m not so sure these 5% deposit deals will still be there.

25% of $320K is far greater than 5% of $400K.

At present, landlords ar getting a pretty raw deal.

We have to give two months notice to vacate, whereas a tenant only has to give two weeks.

We have to give two months notice to increase rents and, such increases can be rejected by the authorities as being unjust.

So, if NG is removed, which also means the tax break, why would I invest in a rental?

Persons should decide whether to invest , because they have investigated the investment proposal and decided [ with expert advice , if necessary ] that it is worthwhile , having regard to the soundness of the proposed investment , and not because there will be a tax break available from the investment . Where there is a tax break , the taxpayers are subsidising the investor [ as occurs with negative gearing ] . This amounts to the provision of welfare to a person who already has sufficient resources .

Dear Gods, not this Furphy again?

"So, my question is, if we do away with NG, where will people live as there will simply be no incentive for investors to buy houses."

Let's do away with this rort as soon as possible and see house prices tumble from the subsidised high levels they are at the moment.

This rort is used to buy already existing houses, not to build new stock, in the main.

And let's end it on stocks-shares too.

The rents will tumble with lower house prices.

Those 'investors' who 'care' for renters can invest in new buildings and actually increase the level of housing stock, and do something useful for a change.

While we are at it, capital gains tax on all homes would be a good reform too.

negative gearing is a clever scam
we buy a car or a computer..it looses its value..[tough titties]

you buy a house..you get negative gearing
ie avoid paying tax cause your investment supposedly lost money

but hey you rented yiour mansion to your kids
who pay token rent..[no worries the govt will pay the difference]..lol

ng is a scam
those with their wealth in the family trusts..love it

were making rental for the poor
by propping up capitalists..who need to find ways to steal capital gain

think of a bash man in his grass hut
no rent...cause his grass hut dont got value

but a capitalist builds a grass hut for a tourist..it has value
but is also depreciating..so he avoids tax

if you investers didnt buy
maybe the poor could buy

mate your so predictable
cut wages..give you capital gains
and then you negative gear..to avoid paying more tazx on your income

income is money made from no value adding
you shouldnt be taxing wage..cause wage isnt income

but ya mug workers dont know the difference
they could be renting each others house's..to each other
at token rent..

then negative gearing the 'value adding'..
to make each others houses
thus their own..better

plus negative gear them
cause thats what the rich do..

stop giving govt money to capitalists

My financial advisor said never finance several proporties through the same institution,that way if anything goes pear shaped, the other proporties are protected. But what he DIDN'T tell me that in today's financial debarkle, I shouldn't by NEW [ or build ]unless you looking for the long haul in value. We learned pretty quickly that although maintenance considerations help in off set for negative gearing, all the smart investors bought established homes and wore what little maintenance they had to do - thus making the proporty positive geared.
At worst, if you made a yearly loss it was deductable anyway. At best, you made some money even though you were taxed on it - and it's value increased faster than a new house because people just couldn't afford new to buy when you wanted to unload the proporty. Although the established house was cheaper to buy [ for unloading by you ] it's proportional value in profit to you made it a good move. You MADE money in any proportion instead of loosing money because you had to drop the price of a NEW house in order to find a buyer who could afford it.

Just another tax rort. Leave the houses to the people that want to bye them to live in. It is predominately the cheaper homes that investors bye, limiting the market.