Leaders getting heated about housing

Housing has emerged as a hot-button issue in the last days of the election campaign.

Housing affordability has emerged as the key battleground in the final days of the election campaign, with Scott Morrison saying Labor’s negative gearing and capital gains tax changes will force rents up and push property values down — claims Bill Shorten yesterday dismissed as the “latest bit of government rubbish”.

Visiting a young family in the marginal Victorian seat of Corangamite, the Prime Minister talked up the Coalition’s First Home Super Savers program, which provides a tax break on savings for first-home deposits and would be abolished under Labor.

Mr Morrison was also keen to promote his new First Home Loan Deposit Scheme policy — announced at the weekend and consequently matched by Labor — which would see the government back eligible low- to middle-income first-home buyers so they require only a 5 per cent deposit to purchase a property.

He attacked Labor’s plans to phase out negative gearing for ­existing homes and halve the capital gains tax discount, saying that for those who already own a home, “Labor’s housing tax will erode the value of their home”.

GRAPHIC: What economists think of the housing policies

Mr Morrison was questioned about claims he had made earlier this week that investment analysts SQM research had found Labor’s policy would lift rents by 20 per cent.

SQM research author Louis Christopher yesterday told The New Daily his modelling had in fact found rents would rise by between 8 and 13 per cent without any changes to negative gearing or capital gains tax, and by between 13 and 22 per cent if Labor wins and those reforms were implemented.

Mr Morrison said the point of the SQM research was “in alignment completely with everything that we’ve said”.

“That is, rents will be even higher than they would rise anyway as a result of the housing tax measures of Labor,” he said.

The Opposition Leader said the government’s claim rents would rise was a “lie”.

“I would file this in the same bin that you put the confiscation of utes in 2030, the death taxes.

“This is a government who’s been telling lies through the election,” Mr Shorten said.

Labor Treasury spokesman Chris Bowen said the Coalition “just make it up when it comes to negative gearing”.

“They’ve claimed that house prices will crash, they’ve claimed that house prices will rise. They’ve claimed that rents will soar,” Mr Bowen said.

“They just make it up, and the big problem for the Prime Minister is that report that he refers to shows rents going up under his government as well, shows rents going up under a Liberal government with no policy change.”

Housing Industry Association chief economist Tim Reardon backed the government’s view that rents would rise as a result of Labor’s changes.

“I think if we’re looking for losers, the biggest losers out of this will be renters,” Mr Reardon said.

“If you increase the costs on landlords, those costs are transferred very quickly in rents.”

His view was backed by Master Builders Australia chief economist Shane Garrett and Real Estate ­Institute of Australia president Adrian Kelly.

However, Grattan Institute budget policy and institutional reform program director Danielle Wood said claims that Labor’s reforms would force rents up were “a total beat-up”.

“In the short term, you’d be ­expecting no impact at all. If there are fewer investors in the property market, those houses don’t go away,” she said.

“They’re bought by home buyers, which means fewer renters.

“The impact in the longer term could be an impact on housing supply but the fact new houses can still be negatively geared suggests small impact on housing supply.”