rehctub,

Maybe you are thinking of the mythical doctors' wives who invest in real estate, pine plantations, the frock shop and so on.

Anyone who wants to retain more of a large income has other less risky, less exasperating and more lucrative ways of doing so.

Dear rehctub,

Here's another perspective:

http://newmatilda.com/2014/02/17/5-billion-entitlement-joe-hockey-should-end

Bazz you have the real problem at hand. The most realistic thing you have ever sayd.
Not only did it double housing rates it took the house wife with it.
No wonder the country is filling with mail order brides, they know how to look after their husband.

I stand by my thoughts buying homes as an investment drives the prices.
And negative gearing was introduced to lift building/jobs.
However many things may drive a bubble burst if however it comes it will not be driven by high rentals.

We should look at all forms of investment, and see both rises and falls in their history.
Nothing we invest in has not at times seen massive corrections.
I am not making a case/threat one is coming ,but produceing the views of others who see a very real danger.
One I have seen/think I see for some time.

Thanks Foxy, from the article....Economist Saul Eslake believes .....Such a generous tax concession might be understandable if it produced a social or economic good, but it's difficult to see the wider benefits of negative gearing.

But it does, it provides housing that would otherwise be unavailable to many and, as property values increase, the burden of NG on the tax payer decreases, as the losses are reduced.

......Supporters of negative gearing, such as the Real Estate Institute of Australia, argue that the policy helps to keep rental prices down by promoting the supply of new housing to the market.

It also allows for investors to accept a lesser return on investment, a situation that if removed, would see this burden placed on renters.

As for not providing the new housing it was supposedly introduced to, government red and green tape is what stems the flow of new housing, rather than NG often because councils/state governments can't afford the head works.

.....Although it's difficult to predict the direction of housing prices, commentators have begun to suggest that the housing market in Australia may be on the brink of collapse.

Except for QLD as it is about to see a huge cash splash from the CSG industry royalties that, if handled correctly could do wonders for this state

....If the federal government is willing to continue providing such significant tax breaks, they should be targeted at sectors that can provide a greater ongoing benefit to the nation. Like what?

What is more important than housing?

Furthermore, while it's all well and good for these people to point out the negatives about NG, I find it ironic that they call for a balanced approach, yet they fail to acknowledge the benefits of NG, such as the building industry and it's supply chain as just one example.

The reality is that investors WILL NOT invest if it means they do so with after tax dollars, then pay capital gains tax if they sell.

Tax,a transaction tax is a good area to start as it will also see an end to NG.

Bazz, are you suggesting that housing prices increased, simply because banks loaned more money.

If this is what you are saying, how then do you explain a market crash?

Do incomes take a dramatic dive?