Yes Luc, im with you there as the threshold for land tax is ridiculous and by now, given the movement in values should be at least 1.5 to 2 million. Just like bracket creep, its a joke.

I pity renters if the likes of you and I do chuck in the towel, because tent sales at BCF will skyrocket and governments and local councils will spend billions policing public space to move unauthorised squatters on.

Of cause that's only a rant, but I doubt the next generations will take the same risks to provide much needed housing and there in lies the real problem with this policy, who is going to pick up the baton.

Yes 4 Corners interesting tonight.
Note the part about the empty unit buildings without lights on.
This is probably related to the overseas (read Chinese) investors not
paying up at settlement time.
They use local banks for finance because of currency restrictions in
China, but the banks are having trouble getting money of them as many
were buying in the hope of selling for capital gain.
As the price escalation has slowed or indeed stopped they are in a bind.
The banks, except NAB so far, are now not lending to overseas buyers.
It will be interesting to see what effect that has in six months.

Has anyone noticed a lack of Chinese at auctions ?
They were prominent a while back.

If the competition to buy is reduced will the effect of neg gearing
be less adverse ? Pity we cannot go back to buying on one income.

4-Corners could have chosen less of a tragic than the young lady (and absent partner) trying to buy a house on a large sub-dividable block. Hardly surprising that she missed out at the end with her unrealistic expectations. It put her endeavours over the previous 12 months into question IMO, and how realistic she was being expecting a bargain. Sub-600K for a nice home with house block backyard is not ridiculous, but there she was.

I came away believing that if taxation has anything to do with the scale of the run-up in Sydney and Melbourne prices, it is due to CGT changes in 1999. The graph showed overall negative returns on rentals from then onward.

An investor with a fair belief in strong gains from supply and demand analysis might indeed decide to pin his ears back and go hard at capital gain with a 50% tax concession carrot dangling there. While interest rates were low and inflation was not affecting the bottom line, the game-plan was sound.

Negative gearing, which has been in place since the 20's or 30's and doing no harm, provided the vehicle to maximize capital gain by allowing the investor to service higher debt (a 10% increase on a 1 mil house is greater than on a 500K house).

NG is not the culprit. It is the treatment of CGT. We must remove the carrot and revert to indexation of the cost base, with no concession.

The concession was Costello's idea (as was turning super into a tax minimization scheme for the wealthy) and must be wound-back, with fairness.

Well my thoughts are that while negative gearing has played its part in inflating prices, it has come a distant second to lack of supply.

It stands to reason that if there are ten buyers and five houses, and rental demand is high, that competition will ensure a high price, however, if there are five buyers and ten houses, the opp will be the case.

If governments are serious about housing affordability, they should be leaving ng and CGT alone, and legislating the use of ones super to buy their home, under strict guidelines of cause.

This will mean more renters will be able to buy, which in turn should put downward pressure on house prices due in large to less renters.

Of cause the bleeding hearts would say we are discriminating against those with limited super, but hey, id that really societies fault, especially given the economic circumstances we have recently come through whereby anyone who wanted a job, had one.

In saying this, there must be VERY STRICK guidelines put in place to protect the value of ones super, even to the point whereby the amount drawn must be replaced within a timeframe, say ten years, along with interest at CPI rates.

"Well my thoughts are that while negative gearing has played its part in inflating prices, it has come a distant second to lack of supply."

Completely. The CGT concession ignited the house price rise, but heavy market pressure was already there and prices were headed north. NG was rounded into the fray to gear greater capital gain.

Market fundamentals will eventually come home to roost and the speculative period appears halted and possibly in reverse. Markets overshoot. However, unless something is done with CGT, there will be a repeat of sharp speculative upsurges in markets around the country in times ahead.

...not "completely", sorry, NG is third in the order of factors.

If we look at its influence over many decades I think it should be left as is. When there was no CGT (pre-1985) and supply and demand were more in balance it did not drive speculation. Market forces are the primary cause of price speculation.

If, however, there is anything at all done to NG, such as capping it, it should not just be on housing, not on used houses only, but across all asset classes. Otherwise investment in housing will be nobbled and rents will rise. Labor's plan is wrong.