In a paper on housing affordability released on Friday, ANZ Research said it was low interest rates and cheap mortgages that were contributing to the rapid growth in house prices, particularly in Sydney, rather than tax policies like capital gains tax concessions or negative gearing. 

ANZ Research's David Cannington wrote that negative gearing and capital gains tax concessions have existed for around 30 years and 15 years respectively. "What has changed recently, and is more likely to have driven the house price response, has been further cuts to interest rates," Cannington wrote. 

While multi-year low interest rates have been good news for mortgage holders, they have made it harder for people to enter the porperty market by causing house deposit affordability to fall to an "all-time low," the paper states.

“Homeowners and investors are likely to benefit from low mortgage rates for years to come, while first home buyers will continue to find home deposit affordability more difficult than previous generations, unless they compromise on current housing preferences," the report states. “Looking ahead, while deposit affordability for detached houses is expected to remain difficult, a sharp increase in the supply of new apartments in the coming years in Sydney, Melbourne and Brisbane will lift the supply of housing at a lower price point”.