How will the new depreciation rule affect residential property market?

The Federal Government has proposed adjustments to depreciation legislation in the 2017 Budget.

Under the new rules which are yet to be legislated by Parliament, investors will be able to depreciate new plant and equipment assets within a new property and items they add to their property; however subsequent owners who acquire a property after 9th of May 2017 will not be able to claim depreciation on existing plant and equipment assets.

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In a few years time, how will it affect residential property market? What are your thoughts?

 

Nothing for me - I always considered deprecation to be gravy.

 

Tyron of Washington Brown did a SPI podcast on this topic recently - worth a listen, also him steamrolling over the host to get more details in.
How will the government's changes to tax depreciation impact investors? - Smart Property Investment

The impact from my angle will be less investor appeal on existing properties, and reduce competition for owner occupiers as this won't affect their "can't claim anything" status.

Not sure if the legislation has firmed up recently, but the new development rules still seem like a grey area. Technically plant and equip on a new build was purchased by the developer, not the lot owner so say bye bye to 50-60%* of your year 1 depreciation. A loss of an appealing selling point.
This, paired with the 50% local buyer role for new devs would be a risk in getting new builds started. Tyron put it as having the opposite effect to what's intended, which is a common theme with this year's budget.

*looking at my Sydney off the plan 1st year depreciation figures - Prime method