Ray White managing director Dan White and chief economist Nerida Conisbee.
The nation’s largest real estate group has launched a scathing strike against potential changes to negative gearing and capital gains tax (CGT), warning a shake-up would spark a collapse in rental supply and send prices soaring for 2.9 million households.
In an urgent letter sent to 10,500 members, Ray White managing director Dan White and chief economist Nerida Conisbee warned May’s federal budget could reduce or eliminate the current 50 per cent CGT discount available for property investors for established properties.
The industry giants highlighted further speculation of direct restrictions to negative gearing, arguing the move would only increase renter pain by forcing investors to pass on the higher costs of owning an investment property.
Higher costs for investors would be passed on to renters, Ray White warned.
“These potential changes are being considered in an attempt to reduce investor demand for residential property to assist owner-occupiers, especially first-home buyers,” Mr White said.
“While we acknowledge the increasing challenge of housing affordability, our position, and the position of many industry bodies, is that reducing or eliminating the CGT discount will result in higher costs for the 2.9 million households that are renters.
“These measures will put even more pressure on renters that have had to absorb rent increases of 49.6 per cent over the past five years.”
The group, which manages 222,036 properties for landlords, pointed to Victoria as a grim case study, where increased land taxes and regulation resulted in 24,000 fewer rental listings in 2024.
Less private landlords means less choice for the nation’s renters.
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In NSW, Ray White data showed land tax hikes of 60 per cent and rising insurance costs had already sparked surge in rents of close to 50 per cent over five years.
“When investor settings tighten and after-tax returns of investors are reduced, there is a higher correlation to faster rent increases,” the letter stated.
“Rents will rise. Negative policies towards investors ultimately flow through the renters.
Mr White and Ms Conisbee raised particular concern for young Aussies using rent-vesting as a strategy to enter the market.
They said the likely tax changes would reduce the viability of the popular pathway, which allowed first-home buyers to build equity without sacrificing where they wanted to live.
Rentvesting is a popular option for owners like Marie and Lee Brown, pictured at home in Victoria Point. Picture: Lachie Millard
While private landlords now make up 83.1 per cent of the rental market, cutting their available after-tax return would set the stage for institutional investors with long holding periods to step in, reducing housing turnover and upping competition for first-home buyers.
“Treasury’s own modelling indicates that changes to the CGT discount would have a very small or negligible impact on overall housing prices and supply,” the letter stated.
“While such reforms may alter the mix of buyers in the market, they are not expected to materially improve purchase affordability.
“This means the policy risks disrupting investor participation and rental supply without delivering a meaningful reduction in house prices.”
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