Bazz we should not forget the very nature of investing.
And in reminding our selves of China,s new rich understand we benefit from them.
Not maybe in housing but free trade rules, not xenophobia.
Worth consideration too is the number of Australian investors who bought American housing after the GFC and a far different way of buying a house failed.
It if it comes is not going to own Labor or Liberal pants.
World trade conditions and interest rates can do it in part.
An unlikely removal of negative gearing could.

But I see one coming and in the next two or three years.
Say one never comes, how then will renters and first home buyers live?
Current wages levels are constantly under attack so how do they buy/pay the rent?

Belly, 'It's all negative gearing's fault'

And the crowing of the rooster causes the sun to rise.

.....Say one never comes, how then will renters and first home buyers live?

The same way they afford it now, well most anyway, government assistance and/or investment incentives for investors, like NG.

You see back in 81, a house worth $40,000 rented for $80 per week, 10.4% return on investment.

Then along came negative gearing, the result being;

One, it increased prices due to investment incentives.creating thousands of jobs, jobs that would not have been created otherwise.

Two, it reduced returns on investments which in turn kept rents down.

Three it created thousands of building industry jobs, jobs that would not have been created as the demand, a least at this levels, would not have been there.

The unknown factor, one that will never be known is just how much house prices would have increased had NG not come in.

If you take that same house for instance, and say it returned 10.4% on investment, what would the rent be and what would the value be now, Another unknown, BUT, a large portion of the housing boom was caused by population growth and shift, and that would have still occurred.

Belly, it is my view that the only thing that will cause a housing bubble to burst will be interest rates, because many struggle today on just 6%.

But then, if interest rates increase to say 12% and NG remains, then rents will go through the roof simply due to supply V demand, and greed.

I know I sound like a broken record, but a true transaction tax, taxing every single transaction is worth a shot, as among other things it will remove negative gearing without hurting housing as everyone will have so much extra cash to splash around, including land lords, because the only reason they negative gear, is to minimize tax, and at 2% there would be no need for this. Look out accountants!

rehctub, "the only reason they negative gear, is to minimize tax"

While that view might be popular in some quarters, what if your assumption is wrong?

Onthebeach, why else would they negative gear?

No Rehctub, the reason houses shot up in price is the old more money
higher prices syndrome.
When the sisterhood forced the governments to force the lending banks
etc to lend on two incomes, then the old rule came into effect;

If you double the amount of money in a market then prices will rise to
meet the available money.

Pretty simple isn't it. If you were a builder wouldn't you take that
into account ?