A new report showed that Labor’s negative gearing and capital gains tax crackdown will cause a slump in sales activity of between 17 and 20 per cent. As a result, national treasurer Scott Morrison attacked Labor for not releasing modeling to back its new policies.
“Let me remind Australians what a four per cent reduction in the value of your home means. That’s about two to three years in the reduction in the principal in your mortgage you would pay off over that time, gone like that, by the stroke of Labor’s pen,” he said.
However, Labor used two reports—one from Brisbane-based consultancy Adept Economics and one by SQM Research—on its policy to hit back at government suggestions that it would force rents to rise.
According to research by Adept Economics, property prices would be four per cent lower than otherwise as a result of Labor’s changes and that an investor would face a $20,000 loss on a $500,000 unit over a decade because of lower returns produced by Labor’s policy.
Meanwhile, the SQM report suggested that the impact of Labor’s policy changes could last for two to four years, with prices falling from 2017 to 2018 if there is no interest rate cut. Lower sales turnovers could cost governments between $3.1 billion and $3.8 billion in stamp duty collections.
“Malcolm Turnbull and Scott Morrison have been telling lies about Labor’s housing affordability policy for months,” said Opposition Treasury spokesman Chris Bowen. “They don’t have a housing affordability of their own. Labor is the only major party with a policy that will see first home buyers on an even playing field with property investors.”
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