Rents to jump 350 per cent under budget measures, modelling shows

A trio of real estate bodies have claimed this year's federal budget will increase rents by more than four times the government's $2 claim.

Master Builders Australia, the Property Council of Australia, and the Real Estate Institute of Australia have released new modelling by Qaive and Tulipwood which appears to show the budget's housing measures will cause rents to rise by $9 a week - a 350 per cent increase on that forecast by the budget - while new housing supply will fall by more than 8700, GDP will drop $864 million, and construction jobs will fall by more than 3800.

The researchers approached the subject by modelling the impact of the $2 billion Housing Support Program on the national landscape, and also separately modelled the impact of the changes to negative gearing and the capital gains tax outlined in the budget.

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"The impact of the $2 billion Housing Support Program, while increasing housing supply, did not outweigh the reduction caused from the tax changes due to negative gearing and the CGT discount," the research read.

"The main driver of the impacts were the changes to negative gearing, rather than the changes to the CGT discount."

The Treasury's budget estimate was that rents would increase at about $2 a week, while housing supply would increase by 30,000 over the next 10 years.

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"The National Housing Accord target of 1.2 million new homes by the end of 2029 is supported by builders, the government and the community," the real estate bodies said in a joint statement.

"The budget settings are not aligned with the policies that would make this target a reality."

The property industry has been widely critical of the measures introduced in the budget, saying they will stunt growth and discourage investment while disadvantaging first-home buyers and renters.

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The negative gearing changes do not apply to already-owned properties, nor to newly-built ones purchased going ahead.

"The main driver of the difference in the new home building forecasts is the expected impact of the $2 billion Local Infrastructure Fund over the next four years, with the independent modelling forecasting up to 5300 new homes compared to Treasury's 26,000 new homes," the joint statement read.

"The modelling finds that federal government revenue will increase by $3.23 billion, which is comparable to the increase in the national rent bill of $3.42 billion.

"On a $600 per week rental, the increase to rents equates to $142 per year in 2026-27, rising to $477 per year in 2029-30."

The trio of associations are urging parliament to amend the policy package to "better support housing supply and to make the Housing Accord target achievable".