A majority of Australian’s most important asset increased by a whopping 27 percent during the 2-year absence of negative gearing in the 1980’s.
From when it was first scrapped in July 1985 to when it was reinstated in September 1987, median house values boomed in dozens of regional locations across Australia along with Sydney (36 percent), Melbourne (19 percent), Perth (18 percent) and Hobart (14 percent).
Regardless of the forever increased taxes that all 3-levels of government whack on Australian real estate, history is littered with evidence of property booms and lean periods.
While one is connected to the other, tax policies and property markets are very separate things.
A typical Australian house was worth $75,000 when the Hawke-Keating government implemented two (2) major taxes on property in 1985:
- the introduction of an enormous new tax on the gains made upon the sale of an income-producing asset (capital gains tax), and
- the decision to scrap negative gearing. Essentially, that short-lived legislation disallowed property investors from being able to do the same thing that all other individuals with multiple income sources has done since the 1880’s (ie. amalgamate all sources of income and expenses).
Over the 41-years since Hawke-Keating’s assault on financial aspirants, the most valuable asset for the average Australian household improved to $1.2 million.
Over that period, the national population progressively increased from 15.8 million to 28.1 million and homeownership rates were between 67 and 72 percent for the entire time.
The combined contribution from of all state, territory and the federal government to the national rental pool was 340,000 dwellings at the start of that 4-decade period.
The Australian public might be surprised to know that their collective contribution remains at 340,000 dwellings today (with an extra 12.3 million people).
Let that sink in!
The remaining 3 million+ dwellings which provide shelter for those who depend on rental accommodation are funded by everyday Aussie property investors.
Related article: History of negative gearing
Australian conditions: 1985-87 compared to now
During the 2-year window of mid-1985 to mid-1987, house values in some cities and towns across Australia produced growth of 35 percent, some saw circa 25 percent capital growth, others produced mild growth of 10 percent, and a few didn’t produce any growth at all.
In many ways, conditions are significantly better in Australia now than they were in the mid-late 1980’s.
- Oil prices were even higher in the 1980’s than they are now.
- Cost-of-living was under intense pressure in the mid-1980’s, with inflation at 9 percent (it is currently 2 percent).
- There was less stability with household incomes in the 1980’s, with the unemployment rate at 8 percent (it is currently extremely low at 3 percent).
- Borrowers back then were paying home loan interest rates of 16 percent (they are currently 25 percent).
- Australia’s population increased by 3 percent in both periods.
- Significant global conflict was prevalent in both periods.
The 2025 calendar year saw double-digit rates of capital growth in 34 of Australia’s 50 largest cities.
And I have no doubt that various locations across Australia will again produce double-digit rates of growth in 2026.
I also anticipate that Sydney, Melbourne and Canberra will be among the worst performed property markets.
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Lies, damn lies and more lies
Aside from the aforementioned 2-year period, the accounting of rental property income and expenses was supported by thirty-one (31) different Prime Ministers since Federation in 1901.
The gumflapping from those currently empowered to run this country imply that the primary objective of their policies is ‘helping young people.’
Pigs also fly. Backwards. Apparently!
Of all the things which they could do, the best thing that those who work at the Federal Institution For Idiots can come up with is to punish rental suppliers and financial goal setters.
They believe that increasing the rate of tax payable when an investor sells a property is all in the name of ‘helping young people.’
And they could not be more adamant that negative gearing is some kind of super power responsible for property prices soaring every year.
Either they are telling more blatant lies, or they have zero comprehension about market forces. That means they are either extremely dangerous or embarrassingly stupid!
How can an intelligent person claim that national tax policy makes housing unaffordable and also explain why property values in different corners of the country produced such vastly different rates of capital growth over the last 10 years?
Come on, Mr Albanese…
Why did the median value of an apartment in Sydney NSW increase by a piddly 20 percent over the last 10 years while house values in Dubbo NSW increased by 90 percent?
Do the migrants in Dubbo use a better ‘negative gearing recipe’ than Sydney migrants?
Mr Albanese, has Hobart converted its ‘negative gearing factory’ to solar power?
I’m keen to hear your intelligent explanation for house values in Hobart TAS increasing by 110 percent over the last 10 years, while house values increased by 60 percent in Perth WA and 90 percent in Bendigo VIC. I’m all ears!
Maybe Dr Chalmers can enlighten us…
Are there more negative gearing shops in Queensland’s Fraser Coast than in Australia’s second biggest city, Melbourne?
If not, how did negative gearing magically make house values in Hervey Bay and Maryborough increase by 135 percent over the same 10-year period that Melbourne’s house values increased by 50 percent?
Surely the person empowered to manage the finances of an entire country with 28 million people can educate us all on how negative gearing made Darwin NT apartment values decline 15 percent over the last 10-years when apartments in Adelaide SA and houses in Broken Hill NSW both increased.
Come on Einstein, how did that happen?
They are liars, not leaders!
The newspaper clipping below is one example of how they lied about housing in the 1980’s.
And here’s a reminder of some of this current government’s lies:
- They lied about Stage 3 tax cuts,
- They lied about building this nation’s most important piece of infrastructure (Inland Rail Project),
- They keep lying about building 2 million homes in 5-years,
- They lied about fixing our skilled labour shortage and implementing a responsible immigration policy, and
- They lied (no less than 52-times) about leaving CGT and negative gearing alone.
How is this helping housing?
The actual details in the 2026 Federal Budget contain absolutely nothing to materially improve the following:
- Taking less tax out of people’s hard-earned income, so they have more take-home pay to save a deposit,
- Reducing the interest expenses paid by borrowers,
- Removing the enormous entry barrier through governments charging $40,000 to $100,000 stamp duty, and
- Supporting extra supply of rental accommodation for tenants,
- Making it easier for the public sector to build more homes for people to buy,
- Reducing the taxes that the 3-levels of government charge on new properties (40 percent of the purchase price paid by the buyer of a new property are government taxes),
- Reducing the cost of building materials,
- Increasing the volume of skilled labour for the construction sector,
- Reducing the timeframe (and cost) to assess building applications, and
- Policies which encourage aspirational actions, which support goal setters and provide reward for effort.
Real progress for real people
While politicians try to squash people’s dreams with poor policies and demotivating statements like “it is no longer possible for young people to buy a home”, the Propertyology team continues to demonstrate every day what is possible for anyone who has a positive attitude and a preparedness to be disciplined.
As a completely borderless business that buys property all over Australia, the average price of properties purchased by our buyer’s agency during the 2025 calendar year was $700,000.
And we (deliberately) only buy low maintenance, detached houses.
Anyone who says that is “not possible” is not trying!
At the coalface every day, Propertyology’s buyer’s agency continues experience tight conditions and upward pressure on asset values.
We discussed this and more in the latest episode of Connecting The Dots, a videocast produced exclusively Propertyology clients.
Propertyology are national buyer’s agents and Australia’s premier property market analyst. Every capital city and every non-capital city, Propertyology analyse fundamentals in every market, every day. We use this valuable research to help everyday Aussies to invest in strategically-chosen locations (literally) all over Australia. Like to know more? Contact us here.
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