Mortgage demand across the Loan Market Group network has fallen 24 per cent since January, with investor lodgements down as much as 44 per cent in some markets. Federal reforms will restrict negative gearing on established investment homes bought after the May budget, from July 2027, while newly built homes keep existing treatment and the 50 per cent capital gains tax discount. A survey by the Property Investment Professionals of Australia found just 4.8 per cent of respondents were more willing to buy new housing because of the preserved benefits.
Australian house prices fell a record 4.7 per cent over the September quarter, according to Domain data. Perth recorded the sharpest drop at 7.4 per cent, while Brisbane and Adelaide also logged their steepest falls on record. Housing Minister Clare O'Neill said the movement reflected the cyclical nature of the property market. Economists have largely linked the falls to the Reserve Bank lifting the cash rate to its highest level in 15 years. Domain's chief residential economist Nicola Powell said prices could keep falling for many months, with confidence unlikely to recover before an interest rate cut.
Extended families and friends are teaming up to apply for rental properties as tight supply pushes prices higher. Brisbane real estate agent Avi Khan says multigenerational families and friendship groups now make up one in five rental applications to his agency. Perth renter Grady Toomath shares a home with his brother and another housemate, with rent rising from $315 to $715 a week since 2019. Property economist Lyndall Bryant says renters have been overlooked by recent housing policy, while the national rental vacancy rate sat at 1 per cent in the September quarter.
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Sydney investor Kaisser Khater, 38, has bought three houses in regional New South Wales for $340,000 over the past six months. He paid cash for homes in Moree, Cobar and Bourke, which were found off-market through buyers agency Charlies Properties. Local tradespeople are renovating the properties before they are rented out long term. Khater said Sydney no longer made sense for investors because of high interest rates, negative gearing and changes to capital gains tax. He also raised concerns that recent tax changes could make it harder for ordinary Australians to build retirement investment portfolios.
Economists expect house prices to fall up to 15 per cent from their March peak, with stabilisation not until the second half of 2027. AMP chief economist Shane Oliver expects a 10 to 12 per cent fall in prices and a similar rise in rents. Median rents have reached about $700 a week nationally, and polling shows most Australians support rental caps. Housing Minister Clare O'Neill said caps would reduce rental supply, while Greens spokeswoman Barbara Pocock pointed to the ACT's cap as evidence of benefits.
Sydney property prices have fallen for seven consecutive months, but a small number of suburbs are bucking the trend. Realestate.com.au data shows house prices fell in nearly 97 per cent of Sydney suburbs over the past three months, while six recorded modest median gains. Unit prices in Stanhope Gardens and Vaucluse rose by double digits. Ray White economist Atom Go Tian linked the falls to interest rate rises and buyer sensitivity in Sydney's highly leveraged market. The Australian Property Institute expects a recovery from July to September 2027, when new tax rules take effect.
Former treasurer Josh Frydenberg has called for a national debate on lifting the GST and removing some exemptions. Opposition leader Angus Taylor rejected the idea, saying the Coalition will not raise the GST or taxes during a cost-of-living crisis. Treasurer Jim Chalmers is facing his own difficulties, with Labor planning a 30 per cent minimum tax on discretionary trusts. Prime Minister Anthony Albanese and Chalmers have publicly disagreed over a Tax Office decision to ban credit card payments, which has angered small business.
Investors may turn to non-bank lenders after federal budget changes stopped negative gearing being used in serviceability calculations. Mortgage broker Rachelle Kroon says one client used a non-bank lender for a third investment property after a bank rejected the loan. Non-banks hold an Australian Credit Licence and are overseen by ASIC, but they are not bound by the same APRA rules as banks. Non-bank lenders can assess self-employed borrowers and those with complex files more flexibly. However, rates may be 0.4 to 1.2 percentage points higher, and many offer no offset accounts or fixed-rate options.
Changes to negative gearing and capital gains tax will reshape property investment, with the biggest effects felt beyond landlords. From 1 July 2027, negative gearing for residential property will apply only to eligible new builds. Investors buying established properties after the 2026 Budget announcement will not be able to offset losses against other income, though existing investments are protected. Writers argue the reforms could channel more capital into new housing, which would benefit local businesses in western Sydney, but only if planning and infrastructure keep pace.
Housing Minister Clare O'Neil has rejected rental caps, arguing they would push landlords to leave the market and reduce supply. A survey of 384 real estate experts expects property prices to fall eight to 11 per cent from their March peak, with recovery not starting until September 2027. Dwelling values have already dropped 5.2 per cent since March, according to Cotality. Median rents have reached about $700 a week nationally, while most Australians support rental caps, polling shows. Property experts say interest rate fears and unclear tax changes are holding back buyers, with a possible recovery from July 2027.
Housing Minister Clare O'Neil has rejected rental caps, arguing they would push landlords to leave the market and reduce supply. A survey of 384 real estate experts expects property prices to fall eight to 11 per cent from their March peak, with recovery not starting until September 2027. Dwelling values have already dropped 5.2 per cent since March, according to Cotality. Median rents have reached about $700 a week nationally, while most Australians support rental caps, polling shows. Property experts say interest rate fears and unclear tax changes are holding back buyers, with a possible recovery from July 2027.
Lyndall Murray is selling her Evans Head home to invest in Indonesia, citing changes to property tax rules. The new rules replace the 50% capital gains tax discount with inflation indexation and abolish negative gearing for established dwellings. Ms Murray had planned to buy investment properties in Australia. She said she now has the equity to do so, but the tax changes had removed the benefits she expected. She plans to buy a villa in Lombok, where she says her money would generate more rental income, and to return to Australia later without a mortgage.
Investors made up more than 40 per cent of newly listed homes for sale in Melbourne following federal budget changes to negative gearing and capital gains tax. A new PropTrack report shows fewer investors are buying established homes, with investor loans down 9 per cent over the June quarter. Investor loans for new homes rose 24 per cent nationally. About 85 per cent of recent Melbourne investor sales were profitable, according to realestate.com.au economist Luc Redman. Melbourne's median rent rose 5.3 per cent in the past year to a record $600 a week.
Property investment fell 9 per cent in the June quarter, according to a realestate.com.au report released today. The decline follows strong growth in 2024 and 2025. Economists link the drop to four interest rate rises and May federal budget changes to capital gains tax discounts and negative gearing for established rental properties. Investor loans have fallen, although about 93 per cent of investment resales this year sold for more than their purchase price. Rental markets remain tight, and economists expect yields to rebalance over the next six to 12 months.
Investors are pulling back from the property market, with many shifting towards new homes and higher-yielding rental properties after recent tax changes. A PropTrack report by senior economist Angus Moore found investor demand has cooled since interest rate rises and budget tax changes. The budget removed negative gearing for established homes, while new homes were exempt. Investor loans for new homes rose 24 per cent in the June quarter, while overall investor loans fell 9 per cent. Softness in home prices is expected to continue, with price growth not expected to return until 2027.
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Investor activity in the housing market has pulled back after strong results in 2024 and 2025. Rising interest rates and changes to housing taxes in the May federal budget have reduced demand for established homes, while new builds have drawn more investor interest. National home prices have fallen for six consecutive months, down about 3.3% from their peak. Sydney and Melbourne have seen larger falls, while Brisbane, Perth and Adelaide have declined more modestly. PropTrack expects prices to keep falling through 2026, with a possible further rate rise adding pressure.
The Australia Institute says the nation's housing market is seeing its biggest affordability improvement in 50 years. Its chief economist, Greg Jericho, credits Labor's curbs to investor tax breaks. National housing prices have fallen 5.2 per cent since March, according to property data firm Cotality. Investor loans for established homes fell 14 per cent in the June quarter, while loans for new builds rose 4.4 per cent. Rent growth has eased, and independent economist Saul Eslake says the changes have not pushed rents higher.
