"We know that the Treasury has previously said Labor's negative gearing reforms would have a modest impact on house prices, so Mr Frydenberg should release the Treasury analysis on what the impacts of a cut in migration would be on the economy and the housing market."

"The Liberal Party is going back to its 'house price falls under the Liberals good, under Labor bad' hypocrisy and Australians have woken up to it."

Housing Prices and Migration Flows, a NSW Treasury document obtained by the Financial Review, shows Sydney and national house prices would be lower than the forecast trajectory due to fewer migrants.

Under one scenario modelled, a temporary reduction in annual net overseas migration to Australia of 64,000 over five years would cause national house prices to be 7.8 per cent lower and NSW house prices to be 6.8 per cent weaker than a business-as-usual "baseline".

NSW Premier Gladys Berejiklian has called for the state's annual 90,000 migration intake to be slashed in half to 45,000. AAPIMAGE

"Even a temporary NOM [net overseas migration] reduction could significantly alleviate price pressures," says the state government document written last year.

The Morrison government has flagged plans to cut the annual permanent net overseas migration cap to 160,000, from 190,000.

NSW Premier Gladys Berejiklian has called for the state's annual 90,000 migration intake to be slashed in half to 45,000.


Mr Frydenberg said on Tuesday Labor's negative gearing changes would make every Australian home worth less. His office was asked for comment on Labor's criticism that the government was being hypocritical on house price declines.

National house prices have fallen about 5 per cent from their peak. Brendon Thorne

National house prices have fallen about 5 per cent from their peak, due to the banking regulator tightening investor lending rules, less demand for property loans, fewer foreign buyers and waning confidence in the previously hot housing market.

A future Labor government would end negative gearing for future investments, except newly-built homes, including real estate and shares.

The 50 per cent capital gains tax break would also be halved to a 25 per cent tax discount.

People with existing investments would not lose their tax breaks under Labor's planned prospective tax shake up.

The Coalition government and property industry have warned against Labor's proposed property tax changes, with the government arguing they will "smash" house prices and now is the wrong time in the property market cycle to reduce tax incentives.