The survey forecasts property price softening over the next 12 months, with average predicted falls of 4.2% in Sydney and 3.7% in Melbourne, while Perth is expected to rise by 0.5%.
Shane Oliver (pictured right), chief economist at AMP Bank, offered a cautious assessment, noting that while reduced investor demand may assist some first-home buyers, the reforms do not address the underlying supply deficit.
“By depressing investor demand, it will help some FHBs get into the property market, but they won’t make a huge difference to poor housing affordability because it won’t address the fundamental housing shortage and could even make it worse over time (because there will be less investors as a result of the tax changes which will mean less supply. Even the Budget papers say supply will be lower by 35,000 homes over a decade,” Oliver said.
“By depressing housing supply, it could make things harder for renters. It also removes opportunities for wealth generation for younger generations that older generations have been able to take advantage of. The CGT changes also risk reducing the availability of risk capital in Australia (because they bias investors to safer investments less dependent on capital growth) and this could work against the need to boost productivity.”
Associate professor Evgenia Dechter, from UNSW, agreed the changes could offer modest assistance to first-home buyers by reducing investor tax concessions. “However, housing affordability is also a supply problem, so the effect for first-home buyers is likely to be modest unless planning, infrastructure, and construction costs are also addressed,” she added.