Prime Minister Malcolm Turnbull has warned house prices will fall and rents will rise if Labor wins the Federal Election.

 

Turnbull has highlighted his promise of no changes to capital gains taxes and negative gearing arrangements. “The last thing Australia needs is Labor’s plan for higher taxes, including negative gearing, which will send investment, growth and jobs backwards,” he says.

 

Finance Minister Mathias Cormann says modeling by analysts BIS Shrapnel shows tens of thousands of households would be pushed into “rental stress” by Labor’s policy to restrict negative gearing to new-build homes.

 

Senator Cormann says, based on Real Estate Institute of Australia estimates, rent would increase 10% if Labor’s negative gearing changes went ahead. He also cited research by Dr Peter Abelson, of Applied Economics, which suggests house prices would fall 4%.

 

“Labor’s policy on negative gearing will drive down the value of Australian homes — for many families their biggest asset — and it will push up the cost of rental accommodation,” Senator Cormann says.

 

“We need more, not less, investment to increase the supply of housing and we need more investment to generate stronger growth and more jobs.”