Residential property developers to shed staff and build fewer homes under Labor negative gearing policy: UDIA

A survey by the Urban Development Institute of Australia has found that the Federal Opposition's proposed changes to the negative gearing would prompt many residential property developers to shed staff and then build fewer homes.

The UDIA Property Industry Forecast Survey of 200 property industry business leaders found more than 50% of respondents said it was likely they would reduce their number of employees as well as the production of new dwellings.

“We are seven weeks into the election campaign and are yet to see any substantive evidence on the impacts of changes to negative gearing,” the UDIA national president, Michael Corcoran said.

“The people that know the impacts are the industry and they have said definitively that there is too much at risk to change.”

The UDIA had previously welcomed the Turnbull Government's announcement that there will be no changes to negative gearing and capital gains tax.

UDIA modelling, validated independently by MacroPlan Dimasi, suggested that a median investment house under current NG & CGT arrangements still delivers between $43,897 to $71,699 net revenue to the Federal Budget bottom line.

"Changes to the status of Negative Gearing and CGT will hurt middle and low income Australian renters enormously.

"Changes to the status will spike rental prices, cause falls in the value of the family home and reduce supply of needed rental housing which is derived from both established and new housing stocks. Additionally, many first home buyers, who see building a new home as their path to home ownership, will be outbid for their new home by investors who have been forced in to this one segment " said UDIA President Michael Corcoran.