“Who are these people buying a luxury home to not live in? Why would they be negatively gearing it?" said Bill Malouf, licensee at LJ Hooker Double Bay and one of the country's leading luxury agents who sells Sydney homes priced from $10 million through to $50 million. "Most people we sell to in the prestige market, it’s not an investment, they’re not negatively gearing it. It just surprises me a little bit. I don’t know in what vein he’s given this comment. Most people that I sell luxury homes to, it’s their principal place of residence and that’s not a negative gear."

Malouf said that he does not see full-time rental properties at the top end of the Sydney waterfront market. "They do that over Christmas for a short period of time, if they’re going overseas. I do have clients that will go to Europe for three weeks and if you’ve got a holiday letting where you can get $20,000 or $30,000, then they do that occasionally but it’s not a common practice," he said.

John Bongiorno, Director of Marshall White who deals with Melbourne’s eastern suburbs luxury market, said it’s exactly the same in Melbourne. “Rarely does somebody go out and buy a property for above $2 million as an investment to negatively gear, we rarely see that, in fact it’s becoming scarcer and scarcer,” said Bongiorno.

“If you want my views on negative gearing, I just go back to the 1980s when I was operating then and saw the consequences of what happened then and I think the government would only hurt low income earners who can’t afford to get into the market and buy property.” Bongiorno says removing negative gearing would “definitely” deter investors from going into the marketplace, which will create rental pressures. “It does just hurt low income earners and families that are already struggling to rent accommodation.”

“The government have got to do other things rather than looking to kill what is truly at the moment the only industry in the country that seems to be going well,” he said. “You look at the mining downturn, you look at retail that’s struggling, the only thing that seems to be going well, especially in New South Wales and Victoria, is real estate. If the government wants to go and kill that, well they’ll have less income tax. If they kill off the real estate market, I reckon the country will go into a recession.”