Australia politics live: bank expects home price reduction from budget to be more than twice government forecast
Summary
Australia’s largest bank expects that changes to tax rules on property, such as less generous negative gearing and capital gains discounts, will lower home prices by 5%. This is more than double the government’s forecast of a 2% drop, and the housing market is already slowing due to global uncertainty and rising interest rates.Key Facts
- The Commonwealth Bank analyzed the impact of new tax changes on the housing market.
- Negative gearing and capital gains tax discounts for existing properties will reduce home prices by 5%.
- The government Treasury forecasted only a 2% reduction in home prices from these changes.
- The property market slowdown started before the budget because of global uncertainty and higher interest rates.
- The bank now expects home prices to remain flat in 2026, revising down from earlier forecasts of growth.
- Interest rates are predicted to rise once more in August, despite slower economic growth shown in recent data.
- The tax changes caused a faster and bigger market response than expected.
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