As auction clearance rates hit lows not seen since the COVID-19 pandemic, Clare O'Neil said it was unclear how much the planned changes to negative gearing and capital gains taxes would drive down values.
She would not guarantee a key measure of housing construction would improve under Labor's policies.
Levelling the playing field for first home buyers has been a prominent selling point of the government's tax reform package, but ministers are still putting out fires weeks after announcing the overhaul in the budget.
Asked about suggestions house prices could fall as much as 10 per cent under the plan, which pares back concessions for property investors, Ms O'Neil said the government's policies were not the main driver of the property market.
"When house prices in our country move, the biggest driver of them is what goes on with interest rates," she told the ABC's Insiders program on Sunday.
Treasury modelling predicts dwelling prices will continue to rise under the changes, but marginally slower than would otherwise have been the case.
Ms O'Neil gave no guarantees the government's plan to build more homes would increase dwelling completion rates but insisted her policies would make a positive difference.
"What I can tell you is that government policy is going to lift (the number of homes being built) by 420,000 based off what they would otherwise be," she said.
The government is reluctant to promise completion rates will increase because the housing market is also affected by factors beyond its control.
Ms O'Neil's comments come as the proportion of homes successfully sold at auction falls to the lowest level since April 2020, when the pandemic started.
Property research firm Cotality said the auction clearance rate "hit a new cyclical" during the week, falling to a preliminary 54.5 per cent.
The figure is considered a key leading indicator for property prices in the major-city markets and points to a decline in the coming weeks and months.
While analysts believe much of the downturn has been driven by higher interest rates and the broader property price cycle, investors are also likely to back out of the existing homes market as a result of Labor's changes.
At the same time, the government is attempting to sell its overhaul by pointing out the falling rate of home ownership among young people.
Home ownership rates among 25 to 34-year-olds have fallen faster than for other age groups, sinking seven percentage points from 2001 to 2021.
The combination of the 50 per cent capital gains tax discount - brought in by the Howard coalition government in 1999 - and negative gearing has made housing an enticing investment, the government says, at the expense of owner-occupiers.
Reserve Bank research has also found the proportion of Baby Boomer property investors has climbed sharply since the capital gains discount was introduced, from 12 per cent in 2000 to 28 per cent in 2023.
The share of investors younger than 30 fell from nine per cent to four per cent during the same time.
Under Labor's changes, the 50 per cent discount will be scrapped and gains adjusted for inflation will be taxed instead, with negative gearing on purchases of existing properties phased out.
Attractive tax treatment will remain open for new builds.
Opposition Leader Angus Taylor labelled the reform package "toxic" and a war on aspiration at a Liberal Party federal council meeting in Melbourne on Saturday.
He promised to repeal the changes if the coalition won power.
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