The Urban Developer
AdvertiseEventsWebinars
Urbanity
Awards
Sign In
Membership
Latest
Menu
Location
Sector
Category
Content
Type
Newsletters
Untitled design (8)
FIRST RELEASE TICKETS ON SALE FOR URBANITY-25 CONNECTING PROPERTY LEADERS ACROSS THE ASIA PACIFIC
FIRST TICKETS ON SALE FOR URBANITY-25 WHERE THE PROPERTY INDUSTRY CONNECTS
SEE DETAILSDETAILS
TheUrbanDeveloper
Follow
About
About Us
Membership
Awards
Events
Webinars
Listings
Partner Lab
Resources
Terms & Conditions
Commenting Policy
Privacy Policy
Republishing Guidelines
Editorial Charter
Complaints Handling Policy
Contact
General Enquiries
Advertise
Contribution Enquiry
Project Submission
Membership Enquiry
Newsletter
Stay up to date and with the latest news, projects, deals and features.
Subscribe
ADVERTISEMENT
SHARE
36
print
Print
RetailAna NarvaezThu 07 Mar 19

Treasury: Negative Gearing Reforms Will Have ‘Little to No Effect’ on House Prices

528e8e88-a938-41da-98ed-923a1614118e

Federal Treasury has delivered a serious rebuke to the Coalition for exaggerating the impact of Labor’s negative gearing and capital gains changes.

In emails released under freedom of information, acting treasurer Kelly O’Dwyer requested the department fact check the Coalition’s claims that Labor’s policies would cause house prices to fall.

In response, Treasury issued a correction: “The [s]tatement is not consistent with our advice.”

“We did not say that the proposed policies ‘will’ reduce house prices,” the email reads.

“We said that they ‘could’ put downward pressure on house prices in the short-term depending on what else was going on in the market at the time.

“But in the long-term they were unlikely to have much impact.”

Labor has jumped on the release, with shadow treasurer Chris Bowen saying that the government had been “caught red-handed” misrepresenting Treasury’s advice.

For his part, treasurer Josh Frydenberg denied that the government was misrepresenting Treasury, pointing to the Financial Review’s take on the release that changes “could” put downward pressure on house prices in the short term.

Frydenberg quoted building industry group the Masters Builders Association figures.

“If Labor’s policy is in place you’ll see 32,000 fewer jobs and 42,000 fewer homes being built.”

Related: House Prices Still to Bottom Out: Report

Despite the public scolding, treasurer Josh Frydenberg denied that the government misrepresented Treasury's advice.


House prices hit spending

It has been a difficult week in economic policy, with GDP figures released on Wednesday revealing that the economy has slowed significantly, entering a “per capita recession” for the first time in 13 years.

Retail trade figures for the March quarter were also sluggish, with falling house prices impacting wealth and spending.

RBA governor Philip Lowe highlighted the link between the two at the AFR annual business summit on Wednesday.

“The evidence is that a tightening in credit supply has contributed to the slowdown in credit growth,” Lowe said.

“The main story, though, is one of reduced demand for credit, rather than reduced supply.

“When housing prices are falling, investors are less likely to enter the market and to borrow. So too are owner-occupiers for a while.”

RetailAustraliaFinancePolicyReal EstatePlanningPlanningPolicy
AUTHOR
Ana Narvaez
The Urban Developer - Editorial Director
More articles by this author
ADVERTISEMENT
TOP STORIES
Bankstown cbd in Sydney NSW EDM
Exclusive

Breaking Delivery Crisis Chokehold on NSW’s Biggest Housing Market

Vanessa Croll
7 Min
Healthscope Hospital EDM
Exclusive

‘Once-in-a-Decade’ Opportunities Rise in Wake of Healthscope Collapse

Clare Burnett
7 Min
Exclusive

Parking Upsize Threatens Fatal Blow to Project Feasibility

Phil Bartsch
6 Min
One New Zealand Stadium BESIX Watpac
Exclusive

Rising to a Challenge: How BESIX Watpac Topped Australia’s Builders

Clare Burnett
7 Min
Exclusive

Rewards Outstrip Risk in SE Queensland Off-The-Plan Buys

Taryn Paris
7 Min
View All >
Aerial photo of St Mary's Intermodal Terminal in Western Sydney now sold by Pacific National to PGIM and Cadence.
Industrial

Cadence, PGIM Team Up for $145m Freight Rail Acquisition

Marisa Wikramanayake
Sydney Fish Market Blackwattle EDM
Planning

Sydney Fish Market Rezoning Clears Way for 320 Homes

Clare Burnett
Bankstown cbd in Sydney NSW EDM
Exclusive

Breaking Delivery Crisis Chokehold on NSW’s Biggest Housing Market

Vanessa Croll
Buyers are ready, the homes are not: Fixing the Western Sydney housing crisis is a sum of its parts, a Sydney summit has…
LATEST
Aerial photo of St Mary's Intermodal Terminal in Western Sydney now sold by Pacific National to PGIM and Cadence.
Industrial

Cadence, PGIM Team Up for $145m Freight Rail Acquisition

Marisa Wikramanayake
2 Min
Sydney Fish Market Blackwattle EDM
Planning

Sydney Fish Market Rezoning Clears Way for 320 Homes

Clare Burnett
2 Min
Bankstown cbd in Sydney NSW EDM
Exclusive

Breaking Delivery Crisis Chokehold on NSW’s Biggest Housing Market

Vanessa Croll
7 Min
Finance

Fast Funds, Real Help—Woodbridge Capital Delivers Both

Partner Content
5 Min
View All >
ADVERTISEMENT
Article originally posted at: https://theurbandeveloper.com/articles/treasury-rebukes-coalition-negative-gearing-will-have-little-to-no-effect-on-house-prices