Australia politics live: bank expects home price reduction from budget to be more than twice government forecast | Australia news
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Contentious tax changes will have a bigger impact on house prices than the government predicted in the budget, according to analysis by Australia’s largest lender reported by the Australian Associated Press.
Commonwealth Bank senior economists Trent Saunders and Ashwin Clarke found that the rollback of negative gearing and capital gains relief for established properties would put 5% pressure on house prices, compared with Treasury forecasts of a 2% decline.
There was already a pre-budget slowdown in the real estate market due to global uncertainty and rising interest rates.
But the rapid response to the tax changes suggests the short-term impact will be sharper than expected, the duo said in a research note on Wednesday.
“We now expect national house prices to remain stable in 2026, below forecasts of three per cent in the budget and five per cent in March.”
Despite data from the Australian Bureau of Statistics showing a slowdown in Australia’s economic growth rate in the March quarter, analysts still expect the Reserve Bank to raise interest rates once again in August.
Welcome
Good morning and welcome to our live politics blog. I Martin Farrer with the best night stories and then it will be Krishani Dhanji with the main action.
Australia’s youngest convicted murderer has been sent back to prison after a judge found he had completely disregarded the conditions of his release. Man known only as SLD stabbed three-year-old neighbor to death Courtney Morley-Clarke On the Central Coast in 2001. More to come.
And today we expect further debate about the government’s plan to replace capital gains tax and adverse practices. The Commonwealth Bank predicts it will push house prices 5% lower than they would otherwise be, more than twice the difference modeled by the Treasury.
