ausbiz | How the Budget Will Reshape the Property Market for Investors

Oliver Hume Chief Economist Matt Bell joined ausbiz to break down the implications of the federal budget's changes to capital gains tax and negative gearing, and what they mean for Australia's housing market and property investors.

Bell described the policy as deliberately designed to reduce investor activity in established properties, creating more room for first home buyers and owner-occupiers. He noted that strong grandfathering provisions remove any incentive for existing investors to sell, suggesting the more likely outcome is extended holding periods rather than a wave of forced sales hitting the market.

From mid-2027, Bell expects established property to become less attractive to new investors, with some capital redirecting toward shares and new housing, where tax concessions remain intact. He anticipates a higher proportion of investors flowing into new builds and a corresponding softening in demand for established stock, with price estimates pointing to a 2–5% drag on existing homes, a figure Bell characterised as modest relative to the double-digit annual gains recorded in recent years.

For investors seeking exposure to new residential development without taking on direct construction risk, Bell pointed to listed developers including Stockland (ASX:SGP), Mirvac (ASX:MGR), and Lendlease (ASX:LLC) as key beneficiaries of the policy shift. Overall, Bell's view is that the market transition will be gradual rather than disruptive.

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