Housing Policies Risk Supply

New modelling suggests the Federal Government’s housing tax changes could have the opposite effect to their stated objective by reducing new housing supply and placing additional pressure on rents.

Independent modelling commissioned by four major housing industry bodies estimates the combined changes to negative gearing, capital gains tax and SMSF borrowing could result in 10,700 fewer new homes commencing between 2026-27 and 2029-30.

The analysis also forecasts rents could rise by around $10 per week, while more than 4,700 construction jobs and $1.05 billion in economic activity could be lost.

The industry groups say the findings highlight the importance of encouraging rather than discouraging investment in new housing.

“With the national 1.2 million-home target already under significant pressure, policy settings that are estimated to remove 10,700 new homes from the market move Australia further away from its housing objectives,” they said.

Their message is straightforward: Australia’s housing challenge ultimately requires more homes, more investment and fewer barriers to construction.