Sydney to be the best for house prices

So says a management consultant recently arrived from England, preparing to buy his fifth Australian house. "The tax breaks are just fantastic. You can offset losses on rental income against your tax, which you can't do in England."
Is this the real reason for the ridiculously high prices of houses for sale in Australia, and for the distorted ratio between house sale prices and the equivalent rental prices, reported in an earlier blog (2nd Jan)?
In the 1980's the labour government tried to do away with negative gearing for houses, but was shouted down and relented. Maybe if, instead of trying to impose a snap change, they had phased things out slowly, we wouldn't be in the present crazy situation where average house prices are eight times average income instead of the three or so which is generally accepted as normal. That attempted change was 20 years ago, so if the government had announced a progressive 5% reduction each year, negative gearing would be gone by now, and house prices might not have risen nearly 200% in the last ten years. Slowly slowly just might have caught the monkey!