Aussies face a faltering economy, lower employment prospects, higher interest rates and higher rents under a Labor government, warns the REIA.
President Adrian Kelly said that this is in spite of Labor looking for improved housing affordability by a “levelling of the playing field”.
Mr Kelly reiterated the REIA’s “strong” opposition to the Labor Party’s negative gearing and capital gains tax policy, especially following its most recent announcement that the trigger date is 1 January 2020 should they win the election.
“The REIA has always been concerned with the impact the policy would have on housing markets, buyers, renters and economic activity,” he said.
“This concern is magnified in the current market.”
Mr Kelly said that there is “almost truckloads” of analysis showing the adverse impacts of the policy on mum and dad investors, home owners, renters, the construction industry, state governments and the economy.
“The latest was last week when SQM Research showed that house prices would drop between 5 per cent and 12 per cent on a weighted average for the capital cities for 2020 to 2022 over and above any other falls being experienced.”
He said the research suggested that there would be further implications as well.
“Rents are expected to increase by between 8 per cent and 15 per cent on a weighted average for the capital cities for 2020 to 2022,” Mr Kelly said.
“[Also], housing construction activity will fall by 25 per cent to 30 per cent from 2019 levels.”
Mr Kelly also said the research suggested macro consequences to Labor’s proposed plan.
“This will have employment and GDP impacts; property sales turnover is forecast to fall by a further 12 per cent to 15 per cent, resulting in a drop in state stamp duty revenue of approximately $2.3 billion.”