Liberal MP hits out at negative gearing

A government backbencher says the housing market is becoming dominated by speculative investors and younger Australians are missing out on purchases.

A Liberal MP says that negative gearing has ramped up house prices to the detriment of young buyers. (AAP)

A Liberal backbencher has acknowledged that negative gearing has ramped up house prices to the detriment of young buyers.

John Alexander who led a parliamentary inquiry into housing affordability said the market is becoming dominated by speculative investors.

"Too often we see the young couple getting beaten out at the auction, and then renting out the very place that they were trying to buy," Mr Alexander told ABC TV on Monday.