{"id":779451,"date":"2026-07-04T23:11:14","date_gmt":"2026-07-04T23:11:14","guid":{"rendered":"https:\/\/www.newsbeep.com\/au\/779451\/"},"modified":"2026-07-04T23:11:14","modified_gmt":"2026-07-04T23:11:14","slug":"another-blow-for-embattled-construction-industry-as-fewer-builders-are-erecting-homes-under-labors-tax-changes","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/au\/779451\/","title":{"rendered":"Another blow for embattled construction industry as fewer builders are erecting homes under Labor\u2019s tax changes"},"content":{"rendered":"

One embattled industry already plagued with high rates of collapse is suffering another setback due to Labor\u2019s tax changes.<\/p>\n

The Albanese government\u2019s decision to restrict negative gearing and scrap the capital gains tax discount has rattled the nation\u2019s housing sector.<\/p>\n

Clearance rates have plummeted and property prices have either gone backwards or slowed across all major cities.<\/p>\n

The downturn in house prices has also spooked builders, who now have less incentive to construct new properties, the Centre for Independent Studies\u2019 chief economist Peter Tulip noted.<\/p>\n

\u201cAs house prices fall, builders no longer make the profits that they thought they would,\u201d Mr Tulip told Business Weekend.<\/p>\n

\u201cSo what was a marginal development ends up having its financing pulled and house prices are a very clear (and) strong determinant of construction in the short run.\u201d<\/p>\n

The recent housing stress also comes as the Reserve Bank of Australia was forced to lift the cash rate 75 basis points this year.<\/p>\n

This completely undid the three rate cuts handed down in 2025 when inflation was falling.<\/p>\n

Cotality data shows<\/a> house prices in Sydney fell 3.2 per cent in the June quarter, while Melbourne experienced a 2.6 per cent decline and Canberra prices dropped 1.3 per cent.<\/p>\n

More concern about the nation\u2019s construction sector came from Housing Industry Association boss Tim Reardon.<\/p>\n

He told News Corp that builders were seeing a pullback that was \u201centirely caused by the government talking\u201d.<\/p>\n

\u201cEvery builder in the past week, all the big guys are seeing what we are seeing,\u201d Mr Reardon said.<\/p>\n

\u201cA collapse in the work coming into the pipeline. The number of contracts out is down, the number of quotes being issued is down, the number of sales is down.<\/p>\n

\"Anthony<\/p>\n

\u201cIt just highlights that in making the changes to investors, they (the federal government) also undermined the confidence of owner occupiers and first-time buyers.\u201d<\/p>\n

The nation\u2019s construction sector is also battling a wave of closures amid rising costs.<\/p>\n

Creditor reporting agency Equifax shows there was a 10 per cent spike in construction businesses closing in the first quarter of 2026 compared to the same period in 2025.<\/p>\n

Meanwhile, construction accounts for 27 per cent of all corporate insolvencies, with the sector continuing to be the largest source of business failure for the fourth year in a row.<\/p>\n

This poses a massive threat to Labor\u2019s goal to build 1.2 million homes in the five years to July 2029.<\/p>\n

Housing approvals fell by 1.1 per cent in May, according to recent Australian Bureau of Statistics data, marking the third time this figure has fallen in as many months.<\/p>\n

This spells trouble for the target as an average of 20,000 homes need to be approved every month until 2029 to reach the target.<\/p>\n

Australia was on track to build just over 200,000 new properties in the year to May 31, but this is still below the necessary 240,000 homes per year target.<\/p>\n

Despite the recent slump, Mr Tulip stressed the near-term setback to the housing sector from the tax changes, and recent interest rate rises, will be short-lived.<\/p>\n

\u201cIn the longer run, we (will) see land prices adjust, profits adjust and construction seems to have no long-term relationship with house prices,\u201d Mr Tulip added.<\/p>\n","protected":false},"excerpt":{"rendered":"One embattled industry already plagued with high rates of collapse is suffering another setback due to Labor\u2019s tax…\n","protected":false},"author":2,"featured_media":779452,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[5],"tags":[64,63,40140,22674,99,11758,7688,369155,1788,1003,47714,68048],"class_list":["post-779451","post","type-post","status-publish","format-standard","has-post-thumbnail","category-business","tag-au","tag-australia","tag-builders","tag-building","tag-business","tag-construction","tag-housing","tag-housing-sector","tag-labor","tag-real-estate","tag-sky-news","tag-tradies"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/779451","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=779451"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/779451\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/779452"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=779451"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=779451"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=779451"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}