Tax Break End Won't Fix Crisis

While many blame investors and negative gearing for causing the housing crisis, research by the Grattan Institute says its effect is minimal.

Grattan Institute economist, Gene Tunny, estimates the price effect of negative gearing to be between 1% and 4%.
He says getting rid of it may change the distribution of ownership from investors to renters, but it is unlikely to improve the overall housing supply.

The number of Australian homeowners has fallen by about 10% since the mid sixties.
NSW Productivity Commissioner Peter Achterstraat says planning and zoning systems are partly to blame for the crisis.

He says they make it difficult to build enough homes where people want to live, which are close to jobs, transport and schools.

“Instead, the system encourages urban sprawl, forcing people into longer and longer commutes,” he say
He says what will lead to reduced housing costs is increasing supply with a 10% increase in dwellings leading to a 25% reduction in housing costs.