Australia politics live: bank expects home price reduction from budget to be more than twice government forecast

Commonwealth Bank economists expect 5% drag on home prices from tax changes, compared with Treasury forecast of 2%. Follow today’s news live

• Get our breaking news email, free app or daily news podcast

Contentious tax changes will have a larger drag on home prices than the government forecast in the budget, according to analysis from Australia’s largest lender, reported by Australian Associated Press.

Winding back negative gearing and the capital gains discount for established properties will weigh on home prices by 5%, compared to Treasury forecasts of a 2% drag, Commonwealth Bank senior economists Trent Saunders and Ashwin Clarke found.