Binning negative gearing will lead to house price falls

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Abolishing negative gearing tax concessions will result in a drop in house prices, economists have predicted.

According to a recent survey by comparison site, almost two thirds (65%) of economists and analysts believe that eliminating negative gearing could result in a drop in property prices.

Almost a quarter of those surveyed (23%) said it could potentially lead to a substnatial drop in house prices, of over 5%.

When looking at the effect of removing negative gearing on the market overall, almost a third (30%) said it could increase the likelihood of a "significant" market contraction, triggering the pop of a “housing bubble”. 

The remaining 70% of economists said it would not trigger a market contraction. A third (33%) said there was no housing bubble in the Australian market.