The call comes as new data from property tracker Cotality shows national auction clearance rates have hit 44 per cent, the lowest figure since April 2020 when lockdowns were in place. The number of capital-city auctions is more than 40 per cent down on a year ago.
The Reserve Bank last month downgraded its housing outlook, predicting dwelling investment to fall about 2.5 per cent from late next year until 2029, casting doubt on Labor’s target of 1.2 million homes. The bank attributed the drop-off to the “ongoing housing market downturn”, caused by higher-than-expected interest rates and worsened by the effect of Labor’s property tax changes.
Shadow Treasurer Tim Wilson said it was becoming clear that the government’s budget forecast of 35,000 fewer houses as a result of the investor clampdown had underestimated the effect on market sentiment. “The treasurer needs to do a complete U-turn on the taxes in his federal budget or we will see a continuation of rents rising [and] housing supply falling,” Wilson told this masthead.
Government ministers acknowledge the changes to negative gearing, capital gains tax and trusts were always likely to draw opposition. Labor has said they will benefit voters in the long run if more young people could buy homes. Employment Minister Amanda Rishworth defended Labor’s economic record, telling News24’s Sunday Agenda: “Inflation has bounced around over the period of our government. Obviously, we inherited an inflation number that had a six in front of it.”
Prime Minister Anthony Albanese, in the Philippines for the ASEAN summit, noted many nations were grappling with high inflation. “Inflation had a 2 in front of it in the Philippines at the beginning of this year. It now has a 7 in front of it,” he told reporters.
The Australian Chamber of Commerce and Industry, the Housing Institute of Australia, Master Builders and the Property Council have written to senators arguing that discretionary trusts were commonly used by family-owned businesses who would probably now find it harder to build. “As drafted, the bill will increase compliance costs, reduce flexibility and undermine the risk-management approaches many builders rely on,” the letter said.
The Coalition has promised to repeal the tax changes, a move that would punch a hole in budget forecasts on top of a $220 billion tax cut not fully costed.
Data to be released later this week on real wages and unemployment will indicate whether the RBA needs to raise interest rates again. The government expects to pass its 30 per cent minimum tax rate on discretionary trusts with Greens support, as focus turns to Labor’s tax agenda in the coming fortnight.