Key events
Contentious 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 to Treasury forecasts of a 2% drag, Commonwealth Bank senior economists Trent Saunders and Ashwin Clarke found.
A slowdown in the property market was already underway 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 note on Wednesday.
“We now expect national dwelling prices to be flat over 2026, down from a forecast of three per cent at budget and five per cent in March.”
Analysts still expects the Reserve Bank to hike interest rates one more time in August, despite Australian Bureau of Statistics data showing a slowdown in Australia’s economic growth rate in the March quarter.
Welcome
Good morning and welcome to our live politics blog. I’m Martin Farrer with the top overnight stories and then it will be Krishani Dhanji with the main action.
Australia’s youngest convicted murderer has been sent back to jail after a judge found him to have had complete disregard for his release conditions. The man, known only as SLD, stabbed to death his three-year-old neighbour Courtney Morley-Clarke on the Central Coast in 2001. More coming up.
And expect more debate today over the government’s plan to change capital gains tax and negative gearing. The Commonwealth Bank is forecasting they will make house prices 5% lower than they otherwise would have been – more than twice the difference that Treasury had modelled.
