Have we lost the plot on negative gearing?

Falling house prices and ineffective rate cuts are hurting the appeal of investment properties

There’s a meme about official interest rates that’s been around since the financial crisis, and it goes like this: Central banks have already cut rates to almost zero (or actually zero) but advanced economies are still languishing.

property bubble

Therefore, cutting rates even further won’t achieve much.

There are a number of problems with this idea.

One is that it’s a nice illustration of the post hoc ergo propter hoc (‘after this therefore because of this’) fallacy. It ignores the counterfactual.

Maybe we would have

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