To follow up on my last point, when people apply for welfare their investments are included in asset tests and rental money is considered income while an operating loss is ignored. I would qualify for the dole, say, only if I sell my rental to reduce my income and my freed equity doesn't tip me over the asset limit.

Not too many with housing investments would or could qualify for welfare, and that situation will only get tighter.

The long view has to be taken on NG, not a knee-jerk national approach to issues specific to Sydney and Melbourne.

Dear Lucifrase and Butch,

We have indeed been here before which is why I am going to bow to the opinion of the former chief economist of the ANZ Saul Estlake.

http://www.abc.net.au/news/2017-04-10/affordable-housing-plan-must-include-negative-gearing-eslake/8430482

I'm sure we would all agree he is far more qualified than the three of us and that his opinion must carry significant weight. On the other side is Scott Morrison who before working for the Property Council did score an honours from UNSW on, wait for it, Applied Economic Geography.

Perhaps if you could find someone of Estlake's expertise to put the opposing view without an ideological agenda I will listen but until then we are probably wasting ink so to speak.

Steel, I have emailed Saul and he agrees that Sydney and Melboure are unique areas and do influence the AH debate somewhat.

I would also ask why prices in the likes of Perth have not been inflated by NG.

The simple truth is Sydney and Melbourne do not make up the whole of Australia and if one chooses to buy there, they need plenty of cash and a high paying job.

If they dont have these, then they have to buy somewhere else.

SteeleRedux, 'Saul, a heavy from the finance industry says and on this occasion that is what I say too, so its right'

There is no good reason at all for either of the two posters to throw in the towel on their critical faculties and disregard their conclusions arrived at from their own experiential learning in investment housing.

I'd say with confidence that nothing has really changed or could change in the finance services industry and there are just as many sharks as ever. Which is why small investors take their risks in real property. That is despite the array of risks, including the increasing government regulation and interference that always ends in unexpected negative effects and tears.

Government, both sides, all levels of government, has continued to see residential housing as a milch cow for taxes.

On the other hand Government has continued to act on its informed belief that government housing is too costly and impossible for government to supply and to manage. For many years Government has been forcing its responsibility for such housing onto the private sector.

So SteeleRedux, what about you tell everyone how government itself is going to provide for welfare and low cost housing and take up the slack if and when the run gets going from 'investment' property?

Realise that confidence once lost, will become a run that is not stopped so easily if at all. That has flow-on effects for such things as self super for the future, providing $ for children's education and so on.

Shorten's Class War is aimed at Useful Idiots and he knows there are always some about. Shorten gets it right in that at least.

There is a shift from the federal reserve. We may very well see a forced devaluation. Something has to happen and fast.

We can not go on like it is. But he's insistence it is a Sydney or Melbourne problem is rubbish. House prices are out of control all over the state.

45 percent of new debt is made by investors in vic and fifty percent in nsw.
Ist time home buyers get nothing, or pay unrealistic prices that will not be paid back with the first rate increase.

So the housing economy is false and unsustainable

Devalue now.

Maybe I have to be even more blunt and add that the mums and dads money that is shied away from investment housing will be expended on living. On the lifestyle that those mums and dads are presently denying themselves to provide shelter for others.

Still, the finance services industry will greedily take commissions and eventually the rump of any of those hard-earned dollars that might come their way in lieu of into property.

The Big End of Town will still be needing those ever-increased record immigration numbers as consumers, and the overcrowding in the large metropolitan centres will continue.