why is the housing market in Australia so bad?
In: Economics
Tax rules, including negative gearing and a discount on capital gains tax make housing an attractive wealth-building investment. For people who bought houses decades ago when they were relatively cheap, as the value of their properties increased, the equity made it easy for them to buy multiple houses, and negative gearing made it less of a problem to pay higher prices for them. The result is that cashed-up older people priced young people out of the market and now older generations own a huge proportion of the wealth and young people have to rent.
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