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• Alan Kohler claims that real estate is a poor investment.

Financial expert Alan Kohler has stated that Australian real estate is now considered a ‘poor investment’ and has urged individuals to cease viewing home ownership as a means of accumulating wealth.

On the Equity Mates podcast, the ABC personality mentioned that he has grown more hopeful about housing affordability for the first time since 2024.

Kohler mentioned that the market is shifting because of Labor’s newly introduced modifications to capital gains tax (CGT) benefits and negative gearing.

He also highlighted the rise in housing development, relaxation of immigration policies, and increased interest rates.

“I believe real estate is a poor investment these days,” Kohler said to hosts Alec Renehan and Bryce Leske.

This is essentially what we mean when discussing housing becoming more affordable: we’re referring to it turning into a poor investment.

The practice of using housing as a means to accumulate wealth must come to an end, and it should simply serve as a residence.

That is what must occur, and I believe for the first time now, that is likely to take place.

Throughout the podcast, Kohler acknowledged the Albanese government’s reforms but contended that they would not be sufficient to address Australia’s housing shortage by themselves.

“I support the changes in the Budget that were revealed. I believe they represent a positive beginning,” he stated.

In May, the government imposed restrictions on negative gearing for new constructions and eliminated the 50 percent capital gains tax discount, substituting it with a fixed 30 percent tax that is adjusted for inflation.

The two modifications were part of several suggestions Kohler introduced in his Quarterly Essay.

“I believe those are positive symbolic changes. They won’t have a significant impact,” he said.

They are worth undertaking, but essentially what needs to occur is a significant increase in the construction of homes.

Kohler anticipated a decline in housing prices for the rest of the year, stating that the factors which drove Australia’s extended real estate surge had mostly vanished.

“They are already declining in Melbourne and Sydney. The national average in May remained stable, and I believe that for the rest of the year, we will witness a drop in property prices throughout the country,” he said.

For the first time, I have reached the perspective that we are likely to witness property prices remaining stable for an extended period.

As per Cotality information, Australia’s biggest housing markets saw drops in July, with Sydney leading the way, as property values decreased by 1.4 percent during the month.

Melbourne experienced a 1.2 percent decrease, while Brisbane and Adelaide, which had previously been some of the nation’s top performing markets, saw drops of 0.6 percent and 0.2 percent respectively.

Perth was the sole major capital that did not experience a decline, as property values increased slightly by 0.1 per cent.

Kohler mentioned that a mix of elements is probably going to maintain a downward influence on prices.

“I believe the era of extremely low interest rates that led to a significant rise in property prices over the last decade or so has come to an end,” he stated.

Current interest rates stand at 4.35 percent. I don’t believe they will increase again, but I also don’t think they will decrease significantly, if at all.

Although he remained hopeful, Kohler acknowledged that Australia must overcome substantial difficulties in boosting housing supply and meeting the National Housing Accord’s goal of constructing 1.2 million new homes by 2029.

New Australian Bureau of Statistics figures published this week highlight the scale of the challenge.

In June, a total of 18,328 homes were approved across the country, marking a slight decrease from the 18,375 approvals recorded in June 2016, even though there has been a significant increase in population over the last ten years.

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