Yeh affordability has been eroded. My dad bought a house in 1972 in Essex Heights. Big block, one income. 4 kids. No benefits. He was an accountant earning just over the average wage. House price was 3 times Ave annual earnings. It’s now over 10 and rising. The Ave wage earner has little opportunity without assistance of getting into the housing market like my parents did.You know, we are pretty much the most urbanised country in the world, the proportion of Australians who live in capital cities is very high. Capital city house prices matter. Yes, the ridiculously exclusive and expensive suburbs you cite are always going to be expensive, but that was why you chose them obviously. What is ridiculous is that a family with 2 professional incomes could barely afford a house in Altona these days let alone somewhere like Bentleigh. Back years ago a 1 income family of a factory worker could afford a house. We have gone backwards so far on housing affordability it is criminal.
So, if the negative gearing goes all the investors will stop buying houses. Good, maybe they will be affordable for people who actually want a home. I presume when the investors go away the houses don't just disappear. The Hawke-Keating govt reintroduced negative gearing, even though they knew it was a complete swindle, because they were gutless.
And that ain’t good for the fabric of society.