Luciferase, "Perth and Sydney were the canaries in the coal-mine, once vacancy rates fell elsewhere the quarantine would take its course"

Yes.

What is conveniently forgotten - Labor and ors make a habit of disregarding inconvenient facts - is that there is no one property market in Australia but many.

Also, that direct and indirect government interference and other forces, (but particularly those new records that are continually being set by the feds in immigration and that has been the case for decades) can cause earlier spikes in smaller capitals (eg Perth). However, it is most usually true that Sydney and second Melbourne lead and are the bellwethers of far broader change.

Of course removing 'negative gearing' will have gathering negative effects and deep, across the board. That becomes easily apparent if and when the rental industry is studied as a whole.

Shorten and ors are playing with fire. It would be very easy to set in motion a run from investing long term in property. There is already far more churn in ownership of rental properties than ever before. There is plenty there to deter would-be investors if they did their due diligence, and many get burned or realise after slowing sinking for years that they are being treated as marks by State and federal governments.

The truth is that Federal and State governments are laughing all of the way to the bank with 'negative gearing'. Crumbs for large gains by government, think about it.

Only the very astute and disciplined who invest long-term in rental property know what they are doing, might with a little luck make some earnings annually out of their rental property. The management overheads alone are escalating all of the time.

However their skills would be put to better use elsewhere, where there is far less risk and superior, more reliable returns and they can sleep at night. Where they are not required to sell their asset to have some hope of getting their money back.

When will politicians stop lying?
You're joking right?

luc, while you say owner occupiers will be greatly effected as well.

The one area that appears to be taboo on this negative gearing proposal, is 'where is the land going to come from for the new homes'?

I live in a huge growth region for affordable housing, where small acreage lots (2-10ac) purchased and the existing house rented out until either the DA's are in place, or the demand is sufficient to warrant development.

Now if you take away NG you then limit the market to large cashed up developers, who will on the one hand pay much less for the land (due to reduced competition) and are likely to charge much more for the end product, due to less stock availability. It truly is a no brainer.

Of cause there are the older homes on large res lots, that are purchased, then developed into multiple dwellings, meaning one dwelling can be replaced by several if not dozens, many of which qualify for affordable housing. Negative gearing plays a huge roll in these.

So the question is who is going to buy the used lot, go through the DA and planning process, can be three years or more, then provide reduced cost housing in the end. No one!

This truly is a dumb policy.

As an investor myself I have just purchased another rental and have used equity in other assets which allowed me to borrow 105%, and it will still be positively geared.

My point is long term rental properties can be a strong investment, provided you buy in the right area. Having done so myself has allowed me to use this equity to build a portfolio, which in turn will mean we wont be a Burdon on the future tax payers. Abolishing NG will most likely see an end to this type of financial independence building.

Of cause there is also the commercial abolition of NG but that's a whole new topic but just as potentially damaging in my view.

I welcome anyone including Mr Eastlake to debate me on this topic.

I think that what this has exposed is Labor's modus operandi for policy making:

Step 1 Choose something populist that sounds good and formulate a policy,
Step 2 Ignore all studies and history that show that the policy won't work,
Step 3 Find some half arsed "independent study" that agrees with your policy, and refuse to release any details on your study.
Step 4 Rubbish all the other independent studies and lie through your teeth about not knowing about them.

This applies not only to Labor's moronic Negative gearing policy, but also to its moronic 50% carbon reduction by 2030 (for which they still have done no modelling), their taxing of multinationals, and their funding of Gonski.

It's the "G" in NG that allows the canny punter to back himself, with a small stake, into financial independence.

The punter may make a taxable capital gain and/or progress into positive gearing and pay income tax. Why should this be so for all asset classes other than older housing?

The answer, the cost of older housing will fall to the benefit of first home buyers. Meanwhile, pity renters and anyone already storing retirement acorns through home ownership/investment.

The assertion that home ownership is unaffordable is subjective, dependent upon the each market under consideration and each individual's aspiration. Opening up the land supply will widen possibilities for buyers, but nobbling housing investment by quarantining NG to achieve this is just too stupid for words, and based on envy.