Chalmers defends housing changes as Liberals warn of market crash

Treasurer Jim Chalmers defended the government's negative gearing and capital gains tax changes, calling the housing downturn temporary, as the Liberals warned of a market crash. Chalmers acknowledged the budget overhaul contributed to falling prices, citing Treasury modelling predicting a 2 per cent slowdown, while Sydney and Melbourne drops hit 6.7 and 6.3 per cent. Shadow Treasurer Tim Wilson accused the government of stoking inflation to raise taxes. Former prime minister Paul Keating backed the reforms, saying governments had been "afraid" of change. First-home buyer loans fell 2.9 per cent in the June quarter, and building approvals dropped 3.6 per cent in July.