Abolishing NG will have little direct effect on prices. These are determined by supply and demand, which varies across the nation hence differences in median prices.

NG has been here since the 1920's and prices have risen and fallen. While there may be correlation at times between the popularity of NG and prices there is clearly no causation. NG only affects the momentum of a rising market, not the level it settles to (Melb and Syd prices are in decline from their peaks).

How abolishing NG will indirectly affect prices is a consequence of fewer people having the cash-flow to carry investments in established housing. This will lead to competition for rentals and higher rents.

Property investment, with or without NG, is a mugs game unless values rise beyond inflation (so well done SR on your 100K gain). There are other investments that are more liquid and don't involve bad tenants, management fees, maintenance, rates, insurance, land tax, stamp duty, etc.

Higher rental returns will drive a rise in values and hence the incentive to build new houses. Gov't intervention will include more rent assistance and subsidies/tax breaks to build low-income housing, i.e. higher taxes will result.

Luciferase,
1920 ? So why continue with a system that really does not help to sustain the economy. All NG does is to borrow from the borrowers who pass on their debt-riddled system onto the next generation of borrowers.
How about taking a serious look at sustainability for a change ? I don't give hoot what all those financial experts who have dragged us from one failed scheme to another have to say. Earn a Dollar-pay 20 Cents tax & be done with it. Failed systems don't maintain an economy, incentive does ! let people make money if they can but but only let them do it by paying the same tax as everyone else. You'd be surprised at the result competent & smart people could produce if only the insipid experts didn't always stand in their way. Those who lack the drive will still make a good existense on the minumim wage, just don't keep on punishing those with drive.
Morrison would do well thinking about that.

ttbn,

I had seen your post about the Hawke government and NG but since it is merely a regurgitation of the misleading information from Wikipedia, it hardly merits a mention.

The fact is that the removal of NG won't and didn't cause an immediate rise in rents. Because there was a grandfathering component, the effects would take time to become obvious. In fact rents did rise in Sydney and Perth where vacancy rates were lowest. similar rises would work their way through the system as investors withdrew from the market.

This is what the Hawke government saw coming down the road and that is why they reversed course.

You need to ask yourself why Keating changed his mind over this after two years. Wikipedia says it was 'pressure'. From who and on what basis is left unsaid because its a made-up rational which those opposed to both NG and historic understanding are happy to just believe.

Should the ALP be so foolish as to ignore history, they will find the same problems after 3 or 4 years.

I used nothing from Wikipedia, but if it helps your ego to think I did, you believe that. You are clearly not a very sophisticated researcher yourself. Wikipedia indeed!

NG is nothing more than Welfare for the commercial sector, paid for by real taxpayers.
This nonsense needs to have an end put to it. The playing field will never level out unless we have a Flat Tax. Period !

indi, the commercial sector doesn't NG, but forms companies that carry losses forward to write down against future profits, and it pays a lower rate of tax than most f/t public servants. I suppose flat-taxers will use whatever's at hand to push their case. Denying deduction of losses will stunt enterprise.

Labor's class-war misinformation campaign is clearly working a treat.