Tax blow-up fuels record Aus landlord exodus<\/a><\/p>\nHowever, questions have emerged about the accuracy of the Treasury forecasts amid predictions Australia is heading towards the biggest housing downturn in 40 years.<\/p>\n
The heavily redacted Treasury documents note that modelling is \u201csubject to significant uncertainty\u201d.<\/p>\n
\u201cThe Australian literature on the economic impact of similar reforms shows a wide range of estimated effects, in part due to different policy specifications and modelling choices across studies (including the calibration of shocks),\u2019\u2019 the document states.<\/p>\n
\u201cTreasury\u2019s preliminary modelling produces broadly similar impacts on dwelling prices to other studies.<\/p>\n
\u201cImpacts on the dwelling stock and rental prices are at the lower end of comparable studies, partly reflecting that the policy changes have been designed to limit the impact on housing supply.<\/p>\n
\u201cThe modelling reflects average impacts across the economy based on owner-occupier and investor households investing in a single type of dwelling asset.<\/p>\n
\u201cIt does not separately identify distributional impacts across households, between different types of dwellings, or between<\/p>\n
different geographical areas.\u201d<\/p>\n
Housing downturn<\/p>\n
Australia is on track for one of the biggest housing downturns in 40 years but the government has doubled down, insisting it\u2019s good news for first-home buyers.<\/p>\n
The trajectory of the housing market has dominated question time with the Liberal Party hammering the Albanese Government over house prices.<\/p>\n
Prices have jumped by up to 75 per cent in the last five years in Adelaide, 120 per cent in Brisbane, 109 per cent in Perth and 57 per cent in Sydney.<\/p>\n
But rising interest rates and tax changes to negative gearing and capital gains tax have now hit the housing market, with predictions that prices could fall by as much as 18 per cent annually in Sydney.<\/p>\n
Prices previously dropped by 8.2 per cent over 19 months in 2017-19 and 8.1 per cent over 2022-23.<\/p>\n
\u201cSydney house prices are plummeting so fast that they are on track for the biggest crash in 40 years. The Prime Minister has not been transparent with Australians on modelling,\u201d Liberal frontbencher Tim Wilson said in question time.<\/p>\n
\u201cDo you still stand by treasury that property prices will fall by only 2 per cent?.\u201d<\/p>\n
Minister for Housing Clare O\u2019Neil said that the question was \u201caccurate in one sense that house prices are softening across the country\u201d but insisted it wasn\u2019t unprecedented.<\/p>\n
\u201cThis is the fourth time that we have seen this occur in a decade in our country,\u201d she said.<\/p>\n
\u201cNow, I\u2019m asked about the role that the tax changes have played in this, and Speaker, the Government could not have been more transparent about this in the federal budget.<\/p>\n
\u201cTreasury modelling suggests the reform will increase the owner occupier share of the housing market, resulting in around 75,000 additional owner occupiers across the decade.<\/p>\n
\u201cThis is equivalent to reversing around 10 years of deadlines in home ownership rate.\u201d<\/p>\n
The context that the Coalition was omitting, Ms O\u2019Neil said, was the fact that house prices had gone up by a whopping 400 per cent over the last 25 years.<\/p>\n
\u201cWhat I would say to the parliament is we put what is happening in the property market in context,\u201d she said.<\/p>\n
\u201cI want to remind the parliament we have seen house price growth of 400 per cent in the last 25 years.<\/p>\n
\u201cIn fact, the member opposite asked me about Sydney house prices, he might like to remind himself in the 9 years those opposite were in power, house prices have doubled.<\/p>\n
\u201cWe\u2019ve seen house prices grow by 50 per cent in the last six years. Now, that\u2019s the context that is really important here, I know those opposite don\u2019t have anything sensible to say about this.<\/p>\n
\u201cOur side of the parliament wants to see first homeowners have a realistic shot at getting in the housing market.<\/p>\n
\u201cWe\u2019ve got a broken housing market in this country, a Government trying to do something about it, and the opposition who are the last man standing defending a broken system. We\u2019re very happy to stand on the side of first homeowners when it comes to this debate.\u201d<\/p>\n
Earlier, Liberal leader Angus Taylor noted that the Property Council had described Labor\u2019s tax changes as \u201cas a ram raid on house prices.\u201d<\/p>\n
\u2018Intergenerational inequity\u2019<\/p>\n
But the Treasurer hit back, noting that Liberal frontbencher Tim Wilson had himself previously suggested he wanted price growth to slow.<\/p>\n
\u201cI\u2019ve got a quote here, a transcript, of what the Shadow Treasurer in a podcast on 14 July \u201820-\u201921 said about house prices,\u201d he said.<\/p>\n
\u201cWould you like to hear what the Shadow Treasurer said? I\u2019m quoting the Shadow Treasurer. \u201dI said quite publicly I would like to slow the growth in the price of housing.\u201d<\/p>\n
Cotality research director Tim Lawless said whether you call it a correction, or a \u2018crash\u2019 of a softening of the market was largely semantics. <\/p>\n
\u201cWhat we are seeing now is part of a typical cycle in that housing downturns generally follow periods of upswing,\u201d he told news.com.au.<\/p>\n
\u201cThe speed of this downturn is not quite as fast as the short and sharp drop in values we saw as interest rose from their emergency lows from the middle of 2022, but values are falling faster than they were through the 2017-19 downturn.\u201d<\/p>\n","protected":false},"excerpt":{"rendered":"Treasurer Jim Chalmers was warned in confidential Treasury advice that planned tax changes would put downward pressure 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