Negative gearing has been available for a hundred plus years hasn't it? So where is the historical evidence of its alleged dramatic effect on prices?

The high prices reflect demand and that is high in the larger metropolitan capitals such as Sydney and Melbourne because of:

- High Immigration. Bob Carr and other premiers were right to say that the federal government had no regard for the resultant infrastructure problems for States. The quote given earlier refers,

<Bob Carr calls for Australian immigration to be cut by one-half
February 17, 2016.

"I think the Australian people, if asked, would want immigration slowed," Mr Carr said at a press conference in Sydney on Tuesday. "We've got a third-world style population growth rate.

"If you bring 100,000 people into the Sydney basin every year, the price of housing goes up [...] people wonder why their youngsters can't get houses in the big cities... the answer is we are going for breakneck population growth." >
[SMH,February 17, 2016]

- High Taxes on property. It is a milch cow for government, federal, State and local. Property development tax treatment is complicated due to the number of potential taxes and their breadth of application. However increased expectations of government, particularly of State and local government services requires higher taxes. Land tax is expensive and a disincentive. Its original purpose was lost many years ago, but government is addicted to taxes and kept it.

- Changes in demographics and expectations. Increase in single person households for instance. Increased number of bathrooms and other features such as air-conditioning.

It is typical of spendthrift Labor&Greens that they are focussed on new taxes and they have such a short term view - immediate gratification and undisciplined. Why any alternative government would purport to disrupt and deter small investors providing for their own retirement and education of their children is beyond me. It is one of the few sectors where the small investors has any control of his/her investment and where it is real and not something written only on paper that could disappear overnight.

Too right beach, just look at what almost happened to Qantas a few years back, whereby a union thug went on a personal vendetta to bury the company. How many mums and dads almost lost out there, and how many lost money by abandoning ship when the price was low.

In summary, there is only one real potential winner here, and that is housing affordability, but there are a multitude of potential losers.

Meanwhile our stupid governments continue to ignore the effects mass immigration is having on our economy. These immigrants breed in totally unsustainable proportions in situations where there is no hope for a future, one can only imagine how many children they will have when the realize we are stupid enough to care for them.

But no one dare utter a word for fear of being called racist.

Perhaps migrants, refugee and economic, could be incentivized to settle elsewhere in Oz rather than a majority Sydney and Melbourne.

If 100,000 people per annum are coming into the Sydney bowl alone, it's a recipe for rising rents and house prices, with concessionally taxed capital fanning the flame.

http://www.businessinsider.com.au/chart-australian-capital-city-house-price-growth-since-the-gfc-2016-5

Such steep house price rises have not extended to capitals not experiencing such inflows.

South Australia could be a place for the canny investor to consider, with the level of Gov't largess going its way over the next few years and a progressive gov't. It'd be my tip for AJP, if he has the skills for work outside of manufacturing, and not too far away from the eastern seaboard.

Labor's proposed changes to NG and CGT will not attack the fundamental issue, will stymy M&D investors, will reduce the wealth of home-owners and investors alike, will drive property values down and raise rents. It's CGT change will exacerbate what already unfairly strikes the investor who has a nominal CG and not a real one.

For the punter who is not across the details, Labor may well make sense in its budget speech reply, so it's good politics, but bad policy.

Overpopulation indeed !
Sydney's population is expected to reach 5 million by December.
Now that is a national disaster.
The latest complaints from commuters;
They have to drive to work because they cannot park anywhere near the station !
I have seen this massive swing to public transport myself.
I walked to the station and found that if I had taken the car to the
station I would have parked halfway to the station.
A place I visit which is just three blocks from the station now has
the streets full of commuters cars.

Public transport has had very significantly increased patronage.
This has happened with low petrol prices, what will happen when they go up again ?

Luciferase, "Perhaps migrants, refugee and economic, could be incentivized to settle elsewhere in Oz rather than a majority Sydney and Melbourne"

A simpler solution is to cut immigration. Tighten immigration until those problems, which have defied solution for decades, are solved. Government has gone as far as building new cities (Whitlam and Albury-Wodonga), decentralisation Whitlam called it.

The enduring fact is that only some peoples will choose country areas and stay there to bloom. While the 'diversity' tail swings the immigration policy dog and worse there are large numbers involved, the problems remain intractable.

To take an example, there are plenty of young skilled people from Europe, especially skilled trades eg building trades, who would like to live in farming communities and would be able to set up new industries at the same time. But the 'diversity-Australia-is-somehow-being-compelled-to-have' puts diversity first. So we have umpteen accountancy, business and computer graduates from Asia (coals to Newcastle!) lobbing in the major metro cities. Along with the Centrelink-dependent bandits of course.

Much of this is because the dullards in Parliament past and present (and Hawke was one such) never understood the Mercator map and imagine that Australia is close to India and China and must become 'Asian' to fit in to its part of the world as they see it (ie as a predominately Asian nation).

Australian education has a lot to be sorry for.

Then there is the paranoia of 'populate or perish' that imagines if Oz isn't populated to the max and right now, those 'jealous' Asians will take over.

Some migration is welcome, but in much smaller numbers and targeted to real needs, with tightened quality control. It is a buyers market and it always was that way.

However NONE of the major parties and certainly not the feckless Greens is willing to have an open, frank and honest conversation on immigration with the Australian people. Make no bones about it, immigration is a big issue in the next and future federal elections.

Here's a holistic look at NG, per se. I concurs with what I have said here. Poirot, and other class warriors, might take the time to read it.

http://ipa.org.au/publications/2464/what-politicians-need-to-know-about-negative-gearing.

The recent Reserve Bank memo concerning financial stability in Australia, read in conjunction with this document, directs me to the conclusion that sharp property price rises in Australia (i.e. Sydney and Melbourne) are brought about by too little supply and too great a concession on CGT.

In fact, since NG has been in place for nearly a century, and there was no CGT until 1999, it would be fair to put the level of past and present price rises down to short supply, and, the rate of attaining the level partially down to leverage through NG, which can be strongly mitigated by a non-concessional CGT.

Market can rise quickly, overshoot, then correct. However, this is no reason to remove the "time-shift" (Davidson) of operating losses that NG effectively is. It aids people of modest means to invest and become financially independent of government.