Treasury predicted a two percent fall in house prices. The Commonwealth Bank is now forecasting ten percent. Sharri Markson says that gap tells you everything about how wrong Labor got this.
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Markson didn't soften her assessment — Labor's own Treasury modelling, she says, is clearly wrong, particularly when it comes to underestimating the impact of scrapping negative gearing and cutting capital gains tax discounts.
Here's where it gets interesting. Jim Chalmers was repeatedly pressed on this, and his defence was that the budget's modelling looks two years ahead, not two months. He argued it's unfair to judge long-term forecasting against early market data.
But here's the thing — when directly asked whether a housing crash could happen, Chalmers refused to rule it out completely, only to later claim we won't see a crash at all. An assessment the Commonwealth Bank's own outlook seems to directly contradict.
Watch this — former Treasurer Phil Glynn and senior Treasury figures spoke out publicly, criticising Treasury for failing to anticipate just how broadly these tax reforms would actually bite, extending well beyond wealthy investors and straight into first-home buyer territory.
That's not even the crazy part. Some first-home buyers are already sitting in negative equity, directly undercutting the policy's own stated goal of improving affordability for exactly that group.
And it doesn't stop there. ABC journalist Kieran Gilbert asked Chalmers a pointed question — wouldn't these reforms have made more sense during a market upswing, rather than in the middle of a downturn? Chalmers sidestepped it, falling back on long-term fairness arguments instead of addressing the timing directly.
Let that sink in for a second, because house prices were already falling before the budget was even announced — suggesting Treasury's models missed momentum that was already building.
So what does this mean for you? Whether you're buying your first home or already own one, the gap between what Treasury predicted and what the market is actually doing might be the real story here — not the policy itself, but whether anyone in government actually saw it coming.
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