Anthony Albanese doubles down on his tax overhaul as house prices fall across Australia

By SARAH BROOKES - SENIOR REPORTER, AUSTRALIA Published: 01:02, 1 July 2026 | Updated: 01:28, 1 July 2026 Prime Minister Anthony Albanese has defended Labor's proposed property tax changes despite fresh data showing a decline in home values.  Home prices fell across every major capital in June, with Sydney and Perth recording the steepest declines, both down 0.5 per cent, according to REA Group data released on Wednesday. Only Darwin bucked the national trend, with values edging up 0.2 per cent over the month.  REA Group said buyers and investors were becoming increasingly cautious, adding that the Federal Budget may have contributed to more careful decision making.  The Albanese government committed to sweeping tax changes, with the existing 50 per cent capital gains tax discount due to be replaced with a new system featuring a 30 per cent flat tax and an inflation discount. Negative gearing rules will be restricted to newly built properties while existing arrangements in place before May 12 would be grandfathered. But Albanese dismissed suggestions Treasury was wrong about house price projections that suggest value will grow, but at a slower rate, due to his reforms. 'No, it's not. Treasury forecasts aren't week by week, they're serious forecasts done based upon modelling and a range of other economic modelling, showing exactly the same thing,' he told ABC News Breakfast on Wednesday.  Prime Minister Anthony Albanese (pictured) insisted modelling on house prices is not wrong Pictured, potential home buyers attend a property auction in Homebush in Sydney 'As a result of these changes, there'll be increases in the value of houses.  'It'll be slightly less - two per cent, to be precise - than it would have been otherwise. 'The great news is that this Saturday, like last Saturday, first-home buyers would have rocked up to auctions and not be competing with investors who want to negatively gear their properties and have taxpayers backing in those investments.' Health Minister Mark Butler also claimed on Wednesday it is normal for house prices to 'jump around a little bit'. 'The history of house prices in Australia is one of growth ... and that doesn't mean there won't be a week here or a week there that you get particular numbers,' he said. 'But we're very confident in Treasury's forecasts. House prices, house values for existing owners, will continue to grow. 'They'll just grow a little bit more softly for a period than otherwise would have happened.' Cotality research director Tim Lawless said the property market was facing a perfect storm of challenges, including the tax measures.  Fresh data showed Australia's housing market weakened further in June, with prices falling across every capital city except Darwin  'Even before interest rates rose, we were seeing affordability hurdles weighing on buyer demand,' Mr Lawless said. 'Higher cost-of-living pressures, deeply pessimistic sentiment and a further dampening of demand via property taxation changes announced in the federal budget are all contributing to weaker housing conditions.' Mr Lawless said the slowdown was already evident across the market, with auction clearance rates remaining below 50 per cent since late May. He added that sales activity has weakened and more homes sit unsold for longer. AMP chief economist Shane Oliver also warned the downturn may have further to run, forecasting property prices could fall another five per cent as investors grapple with Labor's proposed tax overhaul. 'Of course, it could be worse as there is uncertainty around how investors will react to the tax changes and how other buyers will react to withdrawal of investors and of course a sharp rise in unemployment could be a major problem,' he said. The comments below have not been moderated. The views expressed in the contents above are those of our users and do not necessarily reflect the views of MailOnline. By posting your comment you agree to our house rules. Do you want to automatically post your MailOnline comments to your Facebook Timeline? Your comment will be posted to MailOnline as usual. Do you want to automatically post your MailOnline comments to your Facebook Timeline? Your comment will be posted to MailOnline as usual We will automatically post your comment and a link to the news story to your Facebook timeline at the same time it is posted on MailOnline. To do this we will link your MailOnline account with your Facebook account. We’ll ask you to confirm this for your first post to Facebook. You can choose on each post whether you would like it to be posted to Facebook. Your details from Facebook will be used to provide you with tailored content, marketing and ads in line with our Privacy Policy.