New Zealand tried it first.
The data tells a different story.
From 1 July 2027, negative gearing on existing residential property ends in Australia. Critics point across the Tasman as proof the policy backfires. We pulled the charts the economists are actually citing — and the rent story isn't what the headlines suggest.
NZ rents and net migration peaked in the same year. Then both fell.
Macrobusiness Chief Economist Leith van Onselen argues the rent surge attributed to ending negative gearing actually tracks net migration almost exactly. Both peaked in 2023. When migration tanked, so did rents.
NZ residential rent growth vs net migration
Annual % rent growth (left) · Net migration, thousands (right)
Reconstructed from Macrobond series referenced in news.com.au, 14 May 2026.
"After immigration tanked in New Zealand, so did rents."
NZ values fell 30% in real terms since the 2021 peak.
Removing negative gearing did contribute, van Onselen says — but high interest rates, foreign buyer bans, eased migration and Auckland zoning reform all hit at once. Kiwi economist Shamubeel Eaqub puts the fall down almost entirely to interest rates.
NZ real (inflation-adjusted) house price index
2020 = 100 · Peak in 2021 followed by sustained correction
Indicative reconstruction of the trend referenced in news.com.au, 14 May 2026.
"Rents are not set on a cost plus basis, rather the maximum price the market will bear; which is more related to lack of supply rather than tax settings."
Last time AU tried this, only two cities saw real rents rise.
The Hawke government removed negative gearing in 1985 and reversed the decision two years later. The popular story is that rents surged. The actual data shows rents rose only in Sydney and Perth — both already running tight vacancy rates. Melbourne, Adelaide and Brisbane were flat or falling.
Real rent change by capital city, 1985-1987
% change · Inflation-adjusted · Two-year window during NG removal
Tight vacancy markets shown in gold. Source: news.com.au, 14 May 2026.
"The claim that the removal of negative gearing between 1985 and 1987 drove up rents has been debunked. Real rents rose in Sydney and Perth due to tight vacancy rates at the time — but stayed flat or fell in the other capitals."
Not everyone agrees with the data read.
Treasurer Jim Chalmers frames the change as improving "intergenerational equity" and helping young Australians onto the property ladder. From 1 July 2027 negative gearing will apply to new builds only.
The Block auctioneer Tom Panos argues NZ's experience produced fewer rentals, more tenant competition and higher rents — citing NZ's 2024 reversal under PM Christopher Luxon as proof the policy backfired.
Thinking about how the 2027 change affects your portfolio?
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Talk to tonylawson exp & HOSOSource article: news.com.au · "Truth about New Zealand's failed negative gearing experiment" · Harrison Christian · 14 May 2026