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{{propApi.successMessage}} {{region}} Change locationUpdated modelling: housing package estimated to cut 10,700 homes and push rents higher
Updated modelling: housing package estimated to cut 10,700 homes and push rents higher
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The modelling examines the cumulative impact of the Federal Budget’s primary housing tax reforms, including changes to negative gearing and capital gains tax concession arrangements, together with the $2 billion Housing Support Program.
The updated modelling incorporates the additional measure agreed by Labor and the Greens during negotiations to secure passage of the broader package through Parliament. This measure prohibits self-managed super funds from using limited recourse borrowing arrangements to purchase ordinary residential investment property.
The analysis by Qaive and Tulipwood Economics now finds that, between 2026–27 and 2029–30, the combined housing measures are estimated to:
- reduce new dwelling starts by 10,700;
- increase rents by approximately $10 per week;
- reduce cumulative GDP by approximately $1.05 billion; and
- Construction jobs to fall by more than 4,700.
The findings represent a further deterioration from the modelling released immediately after the Budget, which already showed that the package would reduce housing construction, weaken economic activity, and place additional pressure on renters.
The updated figures reinforce a straightforward point: Australia cannot resolve its housing shortage through policies that make it harder to finance, build, and supply rental homes.
With the national 1.2 million-home target already under significant pressure, policy settings that are estimated to remove 10,700 new homes from the market move Australia further away from its housing objectives.
Housing policy must place supply first. This means accelerating planning and approvals, delivering enabling infrastructure, supporting construction capacity and skills, and maintaining the investment needed to provide homes for Australia’s growing population.
The housing industry remains concerned about the difference between the Government’s stated expectations and the findings of the independent modelling. The Government has claimed that its housing measures will deliver:
- around 75,000 additional owner-occupiers over the next decade;
- a rent increase of less than $2 per week for a household paying the current median rent;
- house-price growth around 2 per cent lower over several years than it would otherwise have been; and
- up to 30,000 additional homes over the decade when combined with its other supply measures.
The industry will continue to monitor market data and assess the effects of the reforms against the Government’s stated claims. As evidence becomes available, the industry will report on whether those claims are being borne out and hold the Government to account for the impacts of these changes.
A copy of the supplementary independent modelling can be found here.
For more information please contact:
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