Prominent real estate industry commentator and auctioneer Tom Panos has delivered a scathing reality check to the government, warning that its controversial shake-up of capital gains tax and negative gearing was based on assumptions that don’t stack up.
Mr Panos claimed the official narrative, that the policy changes were designed to tame a runaway housing market, didn’t pass the pub test.
He lashed out at policymakers for pretending they could accurately map out how buyers, sellers, and renters would react to the massive tax shift, claiming the housing market “humbles everyone” when it comes to making predictions.
Mr Panos made the comments after appearing on a 60 Minutes episode about the impact of recent government changes to capital gains tax and negative gearing, announced as part of the May federal budget.
“As I watched the program unfold, I found myself understanding more clearly why so many Australians have reacted so strongly to the government’s housing policies.”
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Tom Panos on 60 minutes episode Breaking Point; Off the Plan. Picture: 60 minutes, Nine Now
Mr Panos said two issues included the credibility problem of the federal government changes and the auction theory that doesn’t match reality.
“The first issue is not even about the policy itself. It’s about trust,” Mr Panos said.
“If these housing policies were genuinely considered necessary, then logic would suggest they should have been introduced when the property market was stronger, when prices were rising aggressively, when auction clearance rates were robust, and when the economy was demonstrating greater resilience.
“Because when a major policy change arrives only after an election and under vastly different market conditions, people naturally ask a simple question: ‘Was this really a change of position, or was this always the plan?’
“I believe much of the public frustration is less about the details of the housing reforms, and more about the belief that voters were not given the full picture beforehand.”
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Mr Panos said he believes most of the public frustration is due to voters believing they were not given the full picture beforehand. Picture: John Appleyard
According to Mr Panos, the second issue raised during the program was one of the most surprising claims he has heard throughout this debate – the suggestion that these policies would help first-home buyers by reducing competition from investors at auctions.
“As someone who’s spent decades auctioning almost every weekend, I found this argument disconnected from how the market actually operates,” he said.
“The reality is that first-home buyers are not typically dominant participants at auctions.”
Mr Panos said many first-home buyers actively avoid auctions due to requiring finance approval, certainty, conditions and time, while auctions demand the opposite.
“They require unconditional contracts and immediate commitment,” he said.
“As a result, a large proportion prefer private treaty sales where there is greater flexibility around finance and due diligence.
“After thousands of auctions, I can confidently say that first-home buyers are not routinely being locked out because investors are overwhelming them at auction every Saturday.”
According to Mr Panos, there can be a tendency to build policy around economic theory while underestimating the practical behaviour of actual buyers and sellers.
He added markets are not spreadsheets but people, who don’t always act the way models predict.
Federal Treasurer Jim Chalmers on the 60 minutes episode. Picture: 60 minutes, Nine Now
“After watching the program, I didn’t walk away thinking about politics,” Mr Panos said.
“I walked away thinking about the gap that can sometimes exist between policy design and market reality.
“The people I meet every week at auctions, inspections, open homes, and negotiations are not statistics.
“They’re families. They’re investors. They’re first-home buyers. They’re retirees. They’re people trying to make important financial decisions in an increasingly complex environment. My daughters are in that category.”
Mr Panos said if there’s one thing he has learned after decades in real estate, it’s that the market humbles everyone.
“The market has a habit of humbling experts, politicians, economists, commentators, and agents alike,” he said.
“That’s why the best decisions are often made when we spend less time talking about what should happen, and more time understanding what is actually happening.”
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