2017-03-06smh.com.au

The federal government's problem with making housing more affordable is that it becomes, by definition, cheaper. And that's not something that the federal government wants to see happen for some very understandable reasons.

Back in the Howard era Australians were encouraged to invest in housing as a form of wealth creation, partially as a way of addressing rental strain and mainly as a way to ensure people had assets and therefore didn't go selfishly claiming pensions later on. That's when the negative gearing and capital gains exemptions were introduced that made buying property such a sweet deal.

So now there are a lot of Australians who have put their retirement eggs in the basket marked "leveraging the hell out of my mortgage to buy more investment properties" for the last couple of decades and who will be therefore disadvantaged if the value of housing drops.

The Aussies find themselves in a familiar conundrum. Who could'a predicted it??



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