Negative gearing change put to test in Saturday auctions

Today marked the first test of the federal government’s review of negative gearing at auctions across the country.

First home buyer Matt Beck said: “In the past we may have been competing with a lot of investors, but now, with everything that has happened, that may change somewhat.”

Annie Ird said things already seemed to have changed.

“Places that were auctioned off are now going up for sale, so I feel like people are panicking a little bit,” she said.

Matt and Annie had no luck today with their offer on a house in Inner West Sydney.

The federal government’s negative debt revision could now change buyer behavior.

“The investor who bids against someone who wants to live in that house as their first home is not going to have the taxpayer on 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 that property bought after 7.30pm on Tuesday can only be assessed negatively until July 1 next year.

After that, it is only possible for new construction or real estate purchased before the budget evening.

“They are honestly and clearly focused on offering additional opportunities to young people,” said Albanese.

However, there have been comments claiming that it won’t achieve much.

Shadow Treasurer Tim Wilson said: “They are going to raise rents, build fewer homes and put young Australians on their knees by taxing their first home deposit when it is invested.”

Government bond modeling predicts the changes will slow house price growth by 2 percent over the next two years, but also warns they could push up rents, adding an average of $2 a week.

‘I think this will put pressure on house prices in the shorter term. There’s no question about that,” Wilson said.