Macro: A negative gearing bubble?

Key Points Two-thirds of property investors losing money Real house prices growing at a far faster rate than real rents Conditions ripe for a correction If there is one thing that sets our housing market apart from most others, it’s the propensity for Australians to leverage into investment properties in the face of negative income returns. Negative gearing occurs when an investor borrows money to buy an asset, but the income generated by that asset does not cover the interest on the loan. By definition, a negative gearing strategy can only make a profit if the asset rises in...

If there is one thing that sets our housing market apart from most others, it’s the propensity for Australians to leverage into investment properties in the face of negative income returns.

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