Bank expects home price reduction from budget to be more than twice government forecast
Contentious tax changes will have a larger drag on home prices than the government forecast in the budget, according to analysis from Australia’s largest lender, reported by Australian Associated Press.
Winding back negative gearing and the capital gains discount for established properties will weigh on home prices by 5%, compared with Treasury forecasts of a 2% drag, Commonwealth Bank senior economists Trent Saunders and Ashwin Clarke found.
A slowdown in the property market was already under way before the budget due to global uncertainty and rising interest rates.
But the quick response to the tax changes suggested the near-term impact will be sharper than expected, the duo said in a research note on Wednesday.
“We now expect national dwelling prices to be flat over 2026, down from a forecast of three per cent at budget and five per cent in March.”
Analysts still expects the Reserve Bank to hike interest rates one more time in August, despite Australian Bureau of Statistics data showing a slowdown in Australia’s economic growth rate in the March quarter.
Key events
Krishani Dhanji
Good morning, Krishani Dhanji here with you for the final day of the sitting fortnight, thanks to Martin Farrer for getting us started.
The government expects its contentious budget legislation to pass through the House today – it’s not a terrible assumption seeing they have a huge majority but we can expect lots of amendments and divisions from the opposition and crossbench that will drag the vote out.
The government will have a much trickier time getting the Greens over the line when that legislation reaches the Senate. The Greens have concerns over the government’s sweeping discretionary powers in the bill.
We’ll also be keeping a close eye on estimates today and we’ll bring you that as it comes.
I’ve got my coffee, I hope you’ve got yours, let’s get cracking!
Youngest convicted murderer sent back to prison
Australia’s youngest convicted murderer has been handed more time behind bars after a judge found him to have had complete disregard for his release conditions, Australian Associated Press reports.
The man, known for legal reasons as SLD, has spent almost two-thirds of his life in jail after the then 13-year-old abducted and fatally stabbed his three-year-old neighbour Courtney Morley-Clarke on the Central Coast in 2001.
The now 39-year-old pleaded guilty to five counts of breaching his supervisory orders and two charges relating to child abuse material.
The 39-year-old will be eligible for parole in March 2028.
“The reality is that … he cannot last long in the community without breaching the terms of his extended supervision order,” Judge Johnson said in Campbelltown district court yesterday.
The sentence took into account a mandatory minimum of four years’ imprisonment for a repeat child sexual offence, the first being his 2002 murder.
The judge also remarked that, since the age of 13, the defendant had spent all but four months behind bars.
Bank expects home price reduction from budget to be more than twice government forecast
Contentious tax changes will have a larger drag on home prices than the government forecast in the budget, according to analysis from Australia’s largest lender, reported by Australian Associated Press.
Winding back negative gearing and the capital gains discount for established properties will weigh on home prices by 5%, compared with Treasury forecasts of a 2% drag, Commonwealth Bank senior economists Trent Saunders and Ashwin Clarke found.
A slowdown in the property market was already under way before the budget due to global uncertainty and rising interest rates.
But the quick response to the tax changes suggested the near-term impact will be sharper than expected, the duo said in a research note on Wednesday.
“We now expect national dwelling prices to be flat over 2026, down from a forecast of three per cent at budget and five per cent in March.”
Analysts still expects the Reserve Bank to hike interest rates one more time in August, despite Australian Bureau of Statistics data showing a slowdown in Australia’s economic growth rate in the March quarter.
Welcome
Good morning and welcome to our live politics blog. I’m Martin Farrer with the top overnight stories and then it will be Krishani Dhanji with the main action.
Australia’s youngest convicted murderer has been sent back to jail after a judge found him to have had complete disregard for his release conditions. The man, known only as SLD, stabbed to death his three-year-old neighbour Courtney Morley-Clarke on the Central Coast in 2001. More coming up.
And expect more debate today over the government’s plan to change capital gains tax and negative gearing. The Commonwealth Bank is forecasting they will make house prices 5% lower than they otherwise would have been – more than twice the difference that Treasury had modelled.
