The Property Council of Australia has supported the Federal Government's $47 billion National Housing and Homelessness Plan, and a Productivity Commission review into housing supply barriers.
However, they warn the government's proposed tax hikes must be met with equally bold action on supply.
The Plan, the Property Council said, will addresses long-standing constraints across the construction and development pipeline.
The $47 billion Homes for Australia package - which includes a Productivity Commission review and funding for modern construction methods, arrives as the Government simultaneously presses ahead with significant changes to capital gains tax and negative gearing.
Both the Treasury Laws Amendment (Tax Reform No. 1) Bill 2026, and the Income Tax Rates Amendment (Tax Reform No. 1) Bill 2026 are now tabled in Parliament.
“We welcome the plan as we welcomed the national housing targets because these are the booster rockets of state planning reform,” said Property Council chief executive, Mike Zorbas.
”This plan comes at a time of profound uncertainty for new projects across the country.
"The government needs the policy courage to monitor the budget tax hikes and amend them to support the delivery of new homes if the secondary effects are worse than they expect.
“If the tabled legislation proceeds, I would say to the Senate that the Government’s safe harbour and grandfathering arrangements for new housing must be protected, because without them the impacts on market confidence and housing supply would surely be even harsher."
The Government’s $39.3 million investment in modern construction methods will help scale, and support consistent certification ofthese approaches across states and territories.
“In large pockets of the market, construction methods have changed little for half a century," said Zorbas.
“This productivity shot in the arm will be a slow build but worth it in the long run."
The proposed Productivity Commission inquiry into housing supply barriers, including post-permit approvals, land use and infrastructure constraints is essential.
Project delays after planning approval have been granted continue to hold back delivery of city assets around the nation.
“Keeping project approvals growing is vital but it is only the first half of the game,” said Zorbas.
“This review can really help us unlock more enabling infrastructure, including better local, environmental and cultural post-permit approval methods and, above all, better coordination with energy and water suppliers so we can move projects from plans to buildings faster.”
Zorbas noted on budget night that the changes were a risk-laden roll of the dice and said early market signs should keep governments alert at every level.
“When war in the Middle East is driving up already high construction costs and when Australia desperately needs more homes, the risk of further uncertainty and falling house prices cannot be underestimated,” said Zorbas.
“Australia already taxes investment in housing harder than any other part of the economy.
“Up to 40 cents in every dollar that buys a new home goes to government taxes and charges across three levels of government."
Zorbas said changes to negative gearing and capital gains tax must be considered together, because of their combined impact on investor behaviour, housing feasibility and market confidence.
“The established housing market and new housing supply are directly connected,” said Zorbas.
“If confidence falls in the established market and prices weaken significantly, the feasibility of many new apartment and housing projects will be directly undermined.
“That has direct consequences for future housing supply, rental availability and affordability."
Zorbas said maintaining a clear and consistent focus on supply will be essential as these reforms move through Parliament and into the market.
“As legislation is considered, it will be important to closely monitor how these settings influence investment decisions, project commencements and activity across housing markets,” said Zorbas.
“When all is said and done, the fastest long term guarantee of housing affordability is doubling supply.”
