Uncertainty around the Federal Budget’s proposed tax reforms has seen investors retreat and buyers become more cautious, marking a clear turning point in market sentiment across the country, according to the Real Estate Buyers Agents Association of Australia (REBAA) end-of-financial year market update.
REBAA Vice President Zoran Solano said the 2025/26 financial year was closing with a noticeable shift in buyer and seller behaviour nationwide, driven largely by the uncertainty created by the proposed changes to negative gearing and Capital Gains Tax.
“The policy debate alone had been enough to cool confidence across multiple markets, with many investors pausing acquisitions, reassessing borrowing capacity and re-running the numbers on cash flow, holding costs, and long-term strategy,” Mr Solano said.
“The impact had not been uniform, but the pattern is clear with investor enquiry softer and days on market longer in several states.
“Buyers of all types have become more selective and value-driven, plus, we’re seeing a more cautious and segmented market emerge across the country.”
He said quality, well-located properties are still attracting sound interest, but compromised stock or unrealistic pricing is being met with resistance from all buyer types.
“Population growth, tight rental markets, and structural undersupply continue to underpin conditions in many regions, but the Budget-related uncertainty, combined with cost-of-living pressures and interest rate movements, had shifted the tone of the market from urgency to deliberation,” Mr Solano said.
“The fundamentals remain sound in most states, but confidence has clearly taken a big hit.
“Buyers are active, but they’re taking their time, doing more due diligence, and negotiating harder.”
Mr Solano said the second half of 2026 was likely to be defined by selective competition, increased stock in some markets, and a more balanced dynamic between buyers and sellers as they wait for clarity on the final shape of the reforms.
NEW SOUTH WALES
REBAA New South Wales State Representative Linda Johnson said New South Wales is officially in a transitioning market and has moved into a more selective, price-sensitive phase, rather than a uniform downturn.
“Sydney is carrying the clearest signs of fatigue, with Cotality reporting Sydney dwelling values fell 0.9 per cent in May and are now 2.1 per cent below their November peak.
“The urgency seen earlier in the cycle has subsided, with buyers becoming less willing to compete for properties that are not well-presented, well-located or accurately priced.
“Houses at the upper end are facing greater scrutiny, while well-positioned units and lower-maintenance homes continue to attract demand as affordability pressures still shape buyer behaviour.
“Recent industry commentary supports this shift toward a more segmented Sydney market, with units holding up better as both vendors and buyers adjust expectations.
“Regional NSW remains comparatively resilient, although conditions vary sharply by location. By comparison, Cotality and NAB data show regional NSW dwelling values rose 2.4 per cent over the first quarter and 8.9 per cent annually, with houses
outperforming units.
“Newcastle, Wollongong and the Central Coast continue to benefit from commuter, lifestyle and infrastructure-led demand, while inland centres such as Orange, Bathurst, Wagga Wagga, Tamworth and Dubbo remain supported by affordability,
local employment bases and limited quality stock.
“The Federal Budget has had largely a negative effect on market confidence, evidenced by falling auction clearance rates, discounted prices, less buyer activity and in some areas either a backlog of stock, or continuing limited stock availability in
others.
“The Budget’s emphasis on directing tax support toward new housing supply is likely to push some investor attention toward new builds, while some established investment stock may face softer demand as buyers re-run the numbers on yield,
holding costs, and future tax treatment.
“Whilst we have witnessed investor activity significantly decline on the ground, it has not disappeared. ABS lending data shows national investor loan commitments fell 5.3 per cent in the March quarter, although they remained 18.8 per cent higher than
a year earlier.
The average investor loan size also eased by just under $20,000 December to March.
“Investors are still active where rental demand is deep, vacancy risk is low, and the asset has strong long-term fundamentals. However, speculative buying has reduced, and some are exploring diversification. Investors are now more focused on cash flow
resilience, depreciation benefits, land tax exposure, and exit liquidity.
“Looking ahead, NSW is likely to remain a two-speed market. Sydney should continue to favour patient, well-advised buyers, particularly where vendors are unrealistic.
“Regional markets should remain supported however growth is likely to be more selective than broad-based. Buyer demand is still present, but confidence is now tied closely to affordability, interest rate expectations, rental conditions and clarity around
the Budget’s policy changes.
“While there are vendors and buyers uncertain and sitting on the side lines, taking a watch and wait approach, savvy buyers who have the capacity and readiness, are taking advantage of the window of opportunity currently in the market that will not
last forever.”
VICTORIA
REBAA Victoria State Representative Matt Scafidi said Melbourne’s property market has remained relatively stable throughout the financial year, however conditions continue to vary significantly across different market segments.
“Quality family homes in established suburbs, particularly throughout Melbourne’s eastern and inner suburbs, continue to attract strong buyer competition, while compromised properties and those with unrealistic vendor expectations are experiencing longer selling campaigns and increased negotiation,” Mr Scafidi said.
“Buyer demand remains healthy, but buyers are becoming increasingly selective. Rising construction costs, ongoing concerns around property condition and affordability pressures mean purchasers are conducting greater due diligence before
committing.
“One of the most noticeable shifts in recent months has been investor sentiment following the Federal Budget announcement. While existing investors have largely been protected through grandfathering provisions, the proposed changes to negative
gearing and Capital Gains Tax have created significant uncertainty for future investment decisions.
“At the coal face, we have observed a noticeable decline in investor enquiry levels and activity since the announcement, particularly for established dwellings. Many investors appear to be adopting a wait-and-see approach while they assess the long
term impact of the proposed reforms.
“This comes on top of existing challenges facing Victorian investors, including increased land tax obligations, rental compliance requirements and higher holding costs.
“The immediate impact has not been an influx of first-home buyers replacing investors, but rather a reduction in overall investor confidence. Investors are becoming more selective, delaying acquisitions and reassessing portfolio strategies.
This is particularly evident in Melbourne, where investor participation had already been under pressure compared to other states.
“Regional Victoria has remained comparatively resilient, supported by tight rental markets and attractive rental yields. Investor interest continues to be strongest in locations offering affordability, population growth and rental demand fundamentals.
“Looking ahead, we expect Melbourne to continue operating under similar market conditions throughout the second half of 2026. Buyer demand should remain strongest for quality, well-located family homes, while properties with perceived risk
or value concerns may continue to face resistance.
“The key theme moving forward will be confidence. Buyers remain active and finance-ready however investor participation is likely to remain subdued until there is greater certainty around future taxation policy and the broader economic outlook.
“As a result, we expect a more balanced market with selective competition rather than broad-based market momentum.”
QUEENSLAND
REBAA Queensland State Representative Melinda Granzien said Queensland’s property market has entered a period of adjustment following several years of exceptionally strong growth.
“While population growth, interstate migration and housing undersupply continue to support the market, buyer sentiment has become noticeably more cautious throughout 2026,” Ms Granzien said.
“Across Southeast Queensland and many regional markets, conditions are shifting from a strong seller’s market towards a more balanced environment. Buyers are taking longer to make decisions, undertaking greater due diligence and showing
increased sensitivity to price and value.
“A key factor influencing sentiment has been uncertainty surrounding proposed budget changes to negative gearing and capital gains tax arrangements. While these measures have not been legislated, the discussion alone has caused many investors
to pause or adjust purchasing decisions.
“Combined with cost-of-living pressures, interest rate rises since the start of the year, and broader economic uncertainty, investor activity has reduced noticeably across many established Queensland markets.
“Owner occupiers are also becoming more selective. The fear of missing out that drove much of the market over recent years has eased, with buyers now more willing to negotiate and walk away from properties they believe are overpriced.
“Properties under $1 million continue to attract solid enquiry, particularly from first home buyers and owner occupiers. In contrast, many properties above the $1 million price point are experiencing reduced inspection numbers and slower decision making unless they offer exceptional value, location or lifestyle appeal.
“Across Queensland, demand remains strongest for quality family homes, well-located acreage and lifestyle properties within reasonable proximity to essential services, and units and apartments that offer affordability and convenience for owner
occupiers and investors.
“Buyers are seeking affordability and lifestyle benefits compared to metropolitan markets. However, properties with maintenance concerns, poor presentation or unrealistic pricing are generally taking longer to sell.
“One noticeable change is the increase in available stock. While more properties are being listed, many are also remaining on the market for longer periods rather than selling within days. Vendors need to recognise that market conditions have changed
and price expectations must align with current buyer sentiment.
“Looking ahead to the second half of 2026, I expect similar conditions to continue.
Buyers will focus on quality properties that are well-presented and realistically priced, while secondary stock may experience longer days on market and increased negotiation.
“For finance-ready buyers, the current environment presents opportunities through increased choice, reduced competition and stronger negotiating positions than we have seen for several years.”
WESTERN AUSTRALIA
REBAA Western Australia State Representative Peter Gavalas said the Perth market has continued to see strong growth this year with prices increasing 9.5 per cent for the year to date and 25.8 per cent for the year to be a median value of $1,050,354.
“It’s been a story of low supply and strong demand from owner occupiers and investors,” Mr Gavalas said.
“Stock levels started the year with a record low number of properties for sale which for the first time dipped below 2000 listings. We have, however, seen a large increase in listings over the year to currently be at 5733 properties for sale as we head to the end of the financial year.
“As a result in increased listings, days on market has seen a shift from around nine days to sell a property to 14 days in May. This trend appears set to continue with a lot of property campaigns now running for three weeks.
“With three interest rates rises this year, the war in Iran and cost of living pressures, we have seen a more subdued market in the last couple of months with monthly growth slowing from the fast start in the first quarter of the year.
“Since budget night in May, we have seen a big slowdown in investor activity, with the proposed changes to CGT and negative gearing, it has seen most investors move to the sidelines and reassess their investment strategies and buying entities.
“It’s early to determine yet, but it appears the removal of negative gearing is reducing investors cash flow and borrowing capacity. However, high yielding properties are still popular, and yield-added options are in demand still with investors.
“New builds have started to get the attention of some investors, where negative gearing will still apply and allowing them to continue investing using the same strategies.
“Post budget changes have also seen a larger number of investment stock listings as long term investors put their properties up for sale, to avoid changes to capital gains tax. This has seen current stock listing be represented by 60 per cent of properties
below the median price.
“With investors largely sidelined from the market for now, it’s been left to local buyers and first home buyers to take up the excess properties in the lower price range. The first home buyer activity has, however, slowed down as confidence is low and new
stock is coming to the market quicker than it can sell.
“We expect growth to be moderate over the next quarter as the market absorbs the excess stock levels and consumer confidence rebounds. A steady interest rate setting and reduced oil prices will help buyer confidence throughout the rest of the
year.
“The fundamentals haven’t changed in Western Australia, and we are still well below a balanced market of 12,000 to 13,000 listings.”
SOUTH AUSTRALIA
REBAA South Australia State Representative Matt O’Donoghue said the Adelaide property market has continued with its strong growth pattern.
“The year was characterised by strong buyer demand, limited supply and ongoing competition from buyers looking at established low maintenance dwellings,” Mr O’Donoghue said.
“Adelaide dwelling values were up 8.2 per cent over the year, with a median dwelling value of $891,004. Adelaide’s median house price hit $1.049 million – up 10.5 per cent year-on-year. Stock levels remained at historically low levels.
“Home units increased in popularity with metro unit/apartment medians at $675,000 – recording 11.32 per cent in annualised growth.
“Real Estate Institute of SA (REISA) showed both price and sales volumes lifting. South Australia median house price was $789,000. Sales volumes rose strongly quarter-on-quarter with SA up 16.85 per cent and metro up by 21.27 per cent.
“Buyers were purchasing with confidence and acting quickly given that days on market also remained at historical lows.
“Adelaide’s rental market remained very tight through late 2025/26 with the Adelaide combined rents up 3.1 per cent year-on-year and the average house rents at around $680.65 per week.
“Most market monitors are suggesting an increase of between six per cent to eight per cent for 2026, which was less than the last number of years. With the impending budget changes, my thoughts are that investors looking at established dwellings may
sit on their hands moving forward until the dust settles.
“Home and land packages will become an attractive alternative however some are reticent to buy off the plan – rather wanting to invest in something tangible.
“Adelaide will settle because of this, and we may see the market plateau, which will be far better for buyers as we have been in a sellers’ market since post-COVID19. Time will tell.”
ACT
REBAA ACT State Representative Claire Corby said Canberra closed out the 2025/26 year in a more settled position than where it began.
“After an extended standoff between vendor expectations and buyer capacity, the market has finally settled into a more workable equilibrium and transaction activity has returned,” Ms Corby said.
“For much of 2025 and into early 2026, the ACT market was characterised by stalemate. Vendors held firm on price expectations, while buyers, navigating the cumulative impact of successive rate rises, were unwilling to bridge the gap.
“Cotality data in May found Canberra dwelling values still sitting 1.4 per cent below the record highs of May 2022, yet annual growth in the 12 months to April 2026 was quintessentially Canberran at a conservative +5.6 per cent, with a modest quarterly
gain of just +0.4 per cent.
“The most significant story for the year ahead is supply. For the first time in Canberra’s history, subdivision is now permitted in residential areas.
“The ACT Government’s ‘missing middle’ reforms represent a significant shift in a city serviced by 99-year leasehold titles since its creation over 100 years ago.
Subdivision, rather than unit titling supported by a body corporate, is imminent and will permit separately titled townhouses, triplexes, duplexes and secondary dwellings throughout Canberra’s established suburbs.
“Whether this translates to meaningful supply will depend on construction margins and builder capacity, with end sale prices feeling on shaky ground. The potential to add real depth to Canberra’s housing stock is an exciting development.
“On the demand side, the ACT Government has announced the complete removal of stamp duty for first home buyers, regardless of purchase price or income levels. This policy is expected to stimulate buyer demand for the lower band of homes in the year
ahead.
“With other buyer groups also benefitting from this announcement, such as individuals who have not owned property in the past five years, eligible pensioners and NDIS participants, it’s anticipated that entry-level homes in the Canberra market
will experience a surge in demand from 1 July.
“The holding costs for property owners are only increasing, though, as the ACT Government’s debt escalates beyond $12 billion. The cost of funding the light rail is a contentious one that has divided the community more deeply than the Northside-
Southside debate, and the most recent budget announced rates increases of up to 13 per cent.
“While stamp duty cuts may be a crowd pleaser, the longer-term costs and debt repayments appear to fall to the shoulders of property owners via consistent increases to rates and land tax.”
TASMANIA
REBAA Tasmania State Representative Samantha Spilsbury said Tasmania’s property market moved through the 2025/26 financial year with renewed confidence, following a period of more subdued activity after the pandemic-era boom.
“While conditions have not returned to the extraordinary pace of 2020 to 2022, buyer demand has strengthened, stock remains relatively constrained in many locations, and quality properties continue to attract competitive interest,” Ms Spilsbury said.
“In Hobart, the market has been particularly resilient, with median house prices sitting at approximately $746,000 and annual growth of around eight to nine per cent.
Well-located family homes, character properties and homes close to schools,services and employment hubs have continued to perform strongly. Buyers remain price-sensitive, however, with turnkey homes attracting the strongest competition
while overpriced properties are spending longer on the market.
“Regional Tasmania has been the standout performer during the financial year. Launceston’s median house price reached approximately $628,000, recording annual growth of 10.6 per cent, while the North West market experienced some of
the strongest growth in the state, with median house prices rising 18.9 per cent to around $576,500.
“These markets continue to attract buyers seeking affordability, lifestyle benefits and stronger rental returns than are typically available in larger mainland cities.
“Investor activity has noticeably improved throughout the year, supported by Tasmania’s ongoing rental supply shortage and historically low vacancy rates.
Investors have been particularly active in Launceston and the North West, where rental yields remain attractive and entry prices are comparatively affordable.
“Hobart has also seen renewed investor enquiry, although higher purchase prices and increased holding costs continue to influence decision-making.
“Looking ahead, Tasmania is likely to experience similar conditions over the coming year. Demand is expected to remain underpinned by affordability relative to mainland capitals, limited housing supply and continued lifestyle appeal.
“While rapid price growth is unlikely, the market appears well-positioned for steady activity levels, particularly across regional centres where affordability continues to drive both owner-occupier and investor demand.”
ENDS
For more information or to organise an interview with Mr Solano please contact:
Bricks & Mortar Media | media@bricksandmortarmedia.com.au | 0405 801 979
Contact details for REBAA State Representatives can be found via:
State Representatives | Real Estate Buyers Agents Association of Australia
(REBAA) Inc
