Leading economist, Saul Eslake, has lent support to my criticisms (here and here) of the Housing Industry Association’s (HIA) latest report, which argued that limiting negative gearing would worsen Australia’s housing supply situation and make homes less affordable, appearing on ABC’s The Business to debunk the HIA’s claims (video above).
According to Eslake:
“There’s no evidence that the availability of negative gearing does anything to increase the supply of housing. And there’s a lot of evidence that suggests that it drives up the price of housing to the detriment of others that would like to acquire it, particularly first home buyers…
And the absence of that subsidised purchasing would probably see house prices fall a bit. And I struggle to think of anything that would be more to the advantage of first home buyers than removing negative gearing for precisely that reason.”
Good to see the rent-seeking HIA put back in its box.
