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Fears for housing market as Labor’s policy ‘can’t work in its current form’

Real estate experts are worried Labor’s negative gearing policy could further harm Sydney’s housing market, which is showing no signs of improving.

For four weeks in a row, less than 50 per cent of houses have sold at auction.

Two years ago, more than 80 per cent of auctions were successful.

Labor has committed to sticking with its negative gearing and capital gains tax policies, despite a clear downturn in the market and in prices.‘s Chief Economist Nerida Conisbee tells Ray Hadley the Opposition needs to rethink.

“I think the trouble with the policy is it can’t work in its current form… there has been a lot of modelling to say there would be a pretty big hit on housing prices.

“It may not have been a problem when they first announced it, when prices were galloping ahead, but now prices are dropping quite dramatically and this will have another effect on pricing.”

Ms Conisbee says the banking royal commission will also have an impact on the market.

“At this stage, we don’t quite know what that final impact will be.”

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