[sien]

Many other countries have laws that allow negative gearing. The US has substantially cheaper housing (even at the height of the bubble in much of the country) and there you can deduct the interest on your own house against your income and get a 30 year fixed loan, something you haven't been able to do in Australia since the 1980s.

Australia has pretty tight land release laws.

If we had more cities with decent jobs you might see housing prices go down or at least go flat.

It's also worth noting that Australian housing was fairly cheap until the early 2000s (excluding Sydney)

[jbarham]

US mortgage rates are anomalous since the market has essentially been nationalized as the vast majority of mortgages are underwritten by Freddie Mac or Fannie Mae. It's insane that right now the average 30-year fixed rate mortgage rate in the US is 3.63%. (Source: http://www.freddiemac.com/pmms/index.html?intcmp=CWS-HP) That's almost half what Australians pay for a 5-year mortgage!

Australia does have tight land release laws, but it means that property prices are kept artificially high and too much capital is tied up unproductively in mortgages instead of investing in innovative, high-growth industries.

[jacques_chester]

I'm not so sure. There's still institutional bias against venture investment in Australia.

Superannuation savings are north of AU$1.5 trillion dollars at this point. Supposing that "only" a trillion of that is held by fund managers, then a mere 0.5% shift in portfolio allocations would pump $5 billion dollars into VC.

Given that the total Australian VC is a few hundred million on an outside guesstimate, that'd be pretty noticeable.

Edit: maybe I should be knocking on doors at super funds? Though I guess the local VCs are doing that already.