The Finance Brokers Association of Australia (FBAA) has urged the Federal Government to dismiss reports they are considering targeting property investors through changes to the capital gains tax discount and negative gearing.

The association says the proposed changes, reportedly to combat “intergenerational inequity” by forcing more investors out of the market and making housing more affordable for younger Australians, will have the opposite effect.

FBAA interim CEO Peter White AM said less rental properties can only drive up rental prices which have already risen significantly across Australia over recent years.

“While I commend the government for wanting to open up more housing, these changes will disadvantage the very people it seeks to help – younger Australians, as well as many other people on lower incomes.

“The theory that this will drive down the cost of housing to the extent where someone who can’t currently afford to service a mortgage and enter the property market, will suddenly be able to, is overly simplistic and ignores the many other factors in loan approval,” he said.

The FBAA’s 2023 ‘Australian mortgage and rental affordability survey’ conducted by research firm McCrindle found that even before today’s higher rental rates, those renting had to take on additional work, cut back on groceries and sell assets to afford the increased rental prices at the time.

It also found more than half of those renting had experienced higher stress, with others feeling socially disconnected and reporting increased family tension.

The association believes the only result of any move to disincentivise investors, including those who own multiple properties, will be to increase the cost of living for anyone who rents.

“Someone renting with the aim of buying a home won’t be able to save a deposit as easily, while many who are renting because they are already doing it tough will struggle to meet the increased repayments,” Mr White said.

He also pointed to the current shortage of rental properties.

“In many parts of Australia, there are 10 to 20 people or more looking at one rental property such is the lack of availability now, so why would we reduce that supply even more?”