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Australian Property Bubble Due to Tax Breaks

Tax breaks to blame for rising house prices. The government has ignored Ken Henry’s prescription for more affordable housing. EVERY time the Reserve Bank of Australia raises interest rates, Wayne Swan expresses his deepest sympathy for hard-pressed Australians with mortgages… …. Of course, you’ll never catch politicians criticising rising house prices……

….addressing the bias in investment housing towards negatively geared investment, which it describes as “a major distortion in the rental property market”….. The Australian Taxation Office says losses declared from negatively geared property grew by 35 per cent in 2007-08 to $8.6 billion…

…While house prices in Australia have tripled since 1996, in the US they increased by 70 per cent….. But with the International Monetary Fund warning of the risk of a housing bubble and Australia a world leader in household debt and unaffordable housing, perhaps rising interest rates or other economic stresses will find their own drastic solution to the problem sooner or later…..

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