Australia politics live: bank expects home price reduction from budget to be more than twice government forecast
Australia's largest lender predicts that home prices will decrease more than the government's budget forecast. The Commonwealth Bank's analysis suggests a 5% reduction in home prices due to tax changes, compared to the Treasury's 2% estimate. Analysts also anticipate one more interest rate hike from the Reserve Bank despite a slowdown in economic growth.
- ▪The Commonwealth Bank expects home prices to drop by 5% due to tax changes.
- ▪This is significantly higher than the government's forecast of a 2% reduction.
- ▪A slowdown in the property market was already occurring before the budget announcement.
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16.46 EDTBank expects home price reduction from budget to be more than twice government forecastContentious 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…
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