Labor would crash housing prices: Turnbull

Labor's plan to cap negative gearing of property and wind back capital gains tax concessions would crash the housing market, Prime Minister Malcolm Turnbull has told his coalition colleagues.

Mr Turnbull told a joint meeting of Liberal and Nationals MPs on Tuesday that Labor's policy would do nothing for housing affordability, which was mainly due to a lack of supply and delays in development approvals.

More than one-third of new loans were made to housing investors and it "beggars belief" that taking those buyers out of the market would not impact on housing values.

"To crash housing prices would be very damaging to the economy," he said.

"(The ALP's policy) would represent a very significant shock to the largest single-asset class in Australia."

Mr Turnbull said the coalition's tax reform package would form one part of a broader economic plan.

The other parts included innovation, expanding markets through free trade agreements, increasing workforce participation rates, productivity gains, investment in health, education and infrastructure and microeconomic reform.

The government's push to restore the building industry watchdog, which is being blocked in the Senate and could trigger a double-dissolution election, was "not driven by ideology" but was about productivity.