In fact, assuming no major market or policy changes, that’s exactly what will happen.

From my non-expert reading of the house market, and quite apart from criticisms lobbed at government, the biggest factor pushing house prices up in recent years has been property investors — some of whom are quite heavily geared (i.e. buying with debt) — chasing increasingly-strong rental returns and the very favourable tax treatment for houses.

The most obvious fix is also the least likely to happen: at Federal level, simplify the mess of tax rules for investors, in exchange for cutting out discounts like 50% capital gains after a year.

At State level, it’d help to have broad policy coordination for creating more Homeswest housing to supply people who really need help. (The current release strategy has the laudable goal of not creating slums, but seems to have slowed the number of actual homes being built.)

One of the commenters at the West made a good point (one the few good points that could possibly be made in a discussion about so superficial a topic as whether “Amarillo” is a good name): how do we know that investors won’t sweep up many of these properties, keeping house prices inflated and out of reach for most first-time buyers?