Today witnessed the inaugural test of the federal government’s revamped negative gearing policy, as property auctions unfolded nationwide.
Matt Beck, a prospective first-time homebuyer, shared his thoughts, saying, “Previously, we often found ourselves competing against numerous investors. However, with the recent changes, that dynamic might shift a bit.”
Annie Ird echoed this sentiment, observing noticeable differences in the market.
“Properties that were initially going to auction are now being listed for sale instead. It seems like people are getting a bit anxious,” she commented.
Despite their efforts, Matt and Annie were unsuccessful in securing their desired home in Inner West Sydney during today’s auction.
The federal government’s negative gearing overhaul could now change how buyers behave.
“The investor who is bidding against someone who wants to live in that home as their first home won’t have the taxpayer by their side,” he said.
Andrew Wilson, chief economist at My Housing Market, said: “I think we’ll see fewer buyers. And there should be a transition period between fewer investors and more first home buyers.”
New rules mean any property purchased after 7.30pm on Tuesday can only be negatively geared until July 1 next year.
After that, it’s for new builds or property purchased before budget night only.
“They are aimed fairly and squarely at providing additional opportunity for young people,” Albanese said.
However there has been backlash with claims it won’t do much.
Shadow treasurer Tim Wilson said: “They’re going to increase rents, build fewer homes and kneecap young Australians by taxing their first home deposit when it’s invested.”
In pictures: The federal budget newspaper front pages
Treasury modelling predicts the changes will slow house price growth by 2 per cent over the next two years but it also warns it could push rents up, adding an average $2 per week.
“I think in the shorter term it will put house prices under pressure. There’s no doubt about that,” Wilson said.