It is also partly because the losses reported by the Australian Taxation Office (ATO) include non-cash costs, which aren't incurred annually by the owner.
As an example of why most informed investors for whom cash flow is a key consideration need not consider selling even if house prices are stagnant for a period of time - or even falling - refer to the below hypothetical example of a two year old house bought recently by an investor in Brisbane.
Note that since tax is saved at the marginal rate, this strategy is particularly beneficial to higher rate taxpayers.
The depreciation and capital allowances are clearly beneficial to the investor in this example.
This is rarely well understood in market analysis, in all likelihood because much of the commentary railing against negative gearing is naturally enough undertaken by folk that have never owned a rental.