Price growth across Australia’s $6 trillion housing market will be supported by last week’s interest rate cut and the Budget double that left negative gearing intact and super looking less favourable.

 

Mark Steinert, CEO of developer Stockland, says these events will underpin the housing market rather than reignite boom conditions. “It’s not sufficient to see double-digit price increases,” he says.

 

The Reserve Bank last week cut the cash rate to a record low of 1.75% with economists predicting another 0.25 point cut before the end of the year.

 

Meanwhile in the Federal Budget, negatively-geared investments and capital gains tax concessions were untouched. But superannuation tax concessions were tightened, including for those with taxable incomes of more than $250,000 a year and with super balances of $1.6 million and above.

 

Financial adviser and head of MySMSF Robert Joseph expects more money to move into property investment, development and funding at the expense of superannuation. “Super is going to be damaged and treated with caution by the wealthy,” he says.