Australian industry groups warn housing tax reforms will reduce supply

Four major Australian industry bodies—Master Builders Australia, the Housing Industry Association, the Property Council of Australia, and the Real Estate Institute of Australia—have released economic modelling warning that the Federal Government’s housing tax reforms could significantly reduce new housing supply.

The joint analysis, conducted by Qaive and Tulipwood Economics, suggests the package could result in approximately 10,700 fewer new dwelling starts over the four years leading to 2029–30. The modelling indicates that changes to negative gearing, capital gains tax concessions, and new restrictions on self-managed super funds (SMSF) borrowing for residential investment property will impact the market.

Key projected consequences include a reduction in cumulative GDP by approximately $1.05 billion and a loss of roughly 4,740 construction jobs. Additionally, the groups warn that the tightening of rental supply could drive average weekly rents up by $10 by 2029–30, potentially hindering the government’s Housing Accord targets.