Abolishing negative gearing tax concessions will result in a drop in house prices, economists have predicted.
According to a recent survey by comparison site finder.com.au, 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.