Seriously though, negative gearing only affects property closer to the city in good high growth areas. People refuse to suck it up and buy a shithole in a below average suburb to get their foot in the property door. Live there for a while, do some work on it, turn it around and boom you've got fire-power to attack the inner city market. It's a long road and so many I've spoken to have unrealistic expectations of what their first house will be/where they want to live. Your first house should ******* suck, but it will generate you mad equity if you do the right things, and you bunny hop to your next house.
A deposit for a 200-250k house is **** all (especially with the stupidly low deposit homeloans these days), if you have to go down that route and don't have a parents house to borrow against their equity with.