"Chinatown"-Official media of Chinese Australians

On July 7 News, the Reserve Bank of Australia urged the Alberta government on Wednesday to consider the future of negative gearing. The central bank said that "it encourages debt speculation."

There is no doubt that the intervention of the central bank has put pressure on the government's policymakers, and the government had promised not to change the negative gearing policy. The Labour Party is still discussing their position on this.

The central bank believes that this policy should be reviewed.

As housing prices continue to rise, the latest RBA report pointed out that “negative gearing and preferential capital gain policies have pushed people to borrow money to invest in housing.”

"The central bank believes that the negative gearing policy should be reviewed, but it should be combined with other policies." RBA told a parliamentary investigation committee.

RBA has previously described investor-led housing price increases as "imbalances." Even Governor Glenn Stevens said "The Sydney housing market is crazy."

The combination of negative gearing and preferential capital gains makes assets that increase in value more attractive than profitable assets. When these assets are purchased by credit, these effects are further amplified.

Despite this, Federal Treasury Secretary Joe Hockey once again denied the possibility of changing the negative gearing on Thursday. "I don't think so. The current situation is still under control," he said.

News compiled from "News"

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