SPQR,

Saul and Graham have an association I think.

Saul,

Excellent response.

...Suse, did you read it?

The last time negative gearing was removed they had to bring back a year or two later.
Perhaps the number of investment houses that were put on the
market were not cheap enough for those that rented them.

The "real" problem is the very system that allows wildly escallating property prices in the first place. Negative gearing is merely one of many symptoms of that corrupt system.

We have quite strict controls, and rightly so, over what we pay for many things in life. But property is unfortunately exempt. Basically you can name your own over inflated price, and if someone is willing to pay that price, you immediately profit. That's why property prices are a scandal of manipulation and greed, and not just now --- it goes back to infinity. The reason this corruption is so popular "these days" is because the middle class profits (forget about the mega rich millionaires, as they'll make millions elsewhere if necessary). It enables middle class people to build big wealth, that they would otherwise never, ever have. It enables them to have that level of wealth without lifting a finger in actual "work".

It's a corrupt system that advantages the middle classes and wealthy, and throws the less well off who can never, ever get a foot in the door, onto the financial scrapheap. And hardly anyone gives a damn, because they all want to have at least the opportunity to build great wealth without actually working for every dollar gained.

It's a system of wealth building that's based on the very definition of corruption. But society accepts it, approves of it and encourages it.

"Bazz", the reason that 'negative gearing' was brought back a short period after having been abolished in 1986 was in response to please from the NSW Labor Party which was about to lose the 1988 State election. Ever since then, defenders of NG have pointed to what they say happened as a result of its temporary abolition - that it 'caused' a surge in rents, and that the same thing would happen again if NG were to be abolished again.

Rents did rise in Sydney and Perth at this time - but that was because vacancy rates in both cities were less than 2%. In other words, rents would have risen anyway, whether NG had been abolished or not. If abolishing NG had been the 'cause', rents should have escalated in other parts of Australia as well - but they didn't.

So this assertion by proponents of 'negative gearing' is actually an illustration of what Josef Goebbels is supposed to have said, namely that if you repeat a lie often enough, and the lie is big enough, people will come to accept it as the truth.

And yes, as "SPQR" says, I have known Graham since the early 1980s.

Ee gads! Paul, confusing Poirot with me --what a put down.

True, Saul.

I was house hunting for a rental in Perth in early 1986, and it was woeful.

I think the vacancy rate was about 0.7% at that stage.

SPQR,

Being mistaken for Poirot is the best compliment you'll get all day

: )