Forget about percentage moves, the annual increase in home lending, that is, owner-occupied and investor credit combined, has fallen to only $10 billion for the year. The last time we saw that dollar increase in home lending was 30 years ago – right in the middle of the last recession.

Given the size of home lending is 30 times that of 1991, the percentage increase in lending is close to NIL.

Given that our economy has been designed around increasing debt and credit, and given the Government is at peak cash handouts, the future of our debt constrained economy does not look promising.

The ageing baby boom generation is seeing the stalwarts of their wealth creation strategies fall to the wayside. Remember the old days when the value of property doubled every ten years and you could get a reasonable income by investing in a secure bond portfolio. Buy commercial property and get capital gains and rent that increases by 3% + per year. Ahhh memories.

If you lose your tenant, you still must pay land tax that tops out at 2.25%. And if you are an absentee owner ie reside overseas, you can lift that land tax to 4.25% at the top marginal rate. The thing about negative gearing is the negative bit.

Now that the State Governments’ cash cow of property stamp duty on purchases is drying up, and budget deficits beckon, watch for the shift to broad-based land taxes (ie the house you live in). The Australian Capital Territory (ACT) is already moving to abolish stamp duty and replace it with increases in the Residential General rates.

More caution appears to be the order of the day as ‘return on capital’ is replaced by ‘return of capital’.