Any move to curtail the ability of residential property investors to use negative gearing tax concessions would be a drag on bank stocks, especially Commonwealth Bank and Westpac, according to broker Citi, and probably push rents up too.

Following reports that Treasury is exploring options to restrict negative gearing – which allows property investors to use losses to reduce taxable income – the investment bank found similar moves in New Zealand in 2021, and Australia back in the 1980s, may have improved access for first home buyers but came at a cost to renters.