Rural Housing Network said it looked forward to seeing what the federal government did in response to Labor proposals to reduce access to the property investment tax break.

Chief executive Celia Adams said negative gearing was not now achieving its intended goals.

“The idea of negative gearing is about increasing the supply of housing, increasing construction, and that's actually not happening,” she said.

“From a tenant point of view, negative gearing has actually done little to increase the supply of affordable housing.”

But nor did Rural Housing subscribe to the theory rents would automatically rise if the tax break was decreased or removed.

“We have a critical shortage of affordable housing and that's what drives rents up, not necessarily whether or not negative gearing is in place,” Ms Adams said.

“It's that basic economics, when demand outweighs supply then costs will increase. If there was more stock there's likely to be lower rental prices.”

The chief executive said her group wanted more homes built that did not cost more than 30 per cent of people’s income in rent.

“As an organisation we would be supportive of incentives to increase the construction of affordable housing rather than incentives for people to invest in the first place,” she said. 

Leasing Albury director Tony McPhee said there needed to be some tax incentives like negative gearing for property investors.

“If no incentives, (with) the increased costs that people are probably getting at the moment, there's not a lot of reason to keep and hold their property,” he said. “They're going to look at other ways of investing their money.”

Mr McPhee said the present system seemed effective.

“We've got lots of people investing in properties in the current market, which I think has been good for everyone really,” he said.

“It's keeping prices stable and it's keeping the rental prices stable as well.”