Changes to Capital Gains Tax (CGT), negative gearing and trust structures have already fractured buyer confidence, with investor frustration rising sharply and concerns mounting about the impact on future rental supply, according to the Real Estate Buyers Agent Association of Australia (REBAA).
REBAA President Melinda Jennison said the tax changes had created two distinct buyer groups – those who rushed to purchase before Federal Budget night, and those who stepped back entirely in anticipation of the reforms.
“Over the past few weeks, we’ve seen some buyers wanting to purchase quickly, and others have paused, waiting for certainty,” Ms Jennison said.
“That divergence has now crystallised, and the Federal Budget has confirmed the direction many investors feared.”
She said the changes had already influenced behaviour, with many buyers reassessing how and when they invest.
“People have been delaying their decisions so that the purchase can be made in the most tax-effective way,” she said.
“When the rules shift, buyers naturally rethink their strategy – especially those making long-term investment decisions.”
Ms Jennison said the tax changes would reduce investor participation and place further pressure on already-tight rental markets.
“When investors step back, rental supply shrinks – it really is that simple,” she said.
“If these changes discourage investment, fewer rental homes will be added to the market, and that will push rents higher. Tenants will feel the impact long before the broader market adjusts.”
However, Ms Jennison said it was important for investors and their buying representatives to keep the broader context in mind.
“If tax or policy changes are the deciding factor between an investor moving forward or sitting on the sidelines, it may be worth taking a step back to look at the bigger picture,” she said.
“Property investment has never been about making decisions based on one isolated piece of information.
“Over the past 50 years, tax laws, policies and lending practices have changedcountless times, alongside numerous market cycles, yet quality property in well-selected locations has consistently performed well over time.”
She said the new rules should be understood and factored into strategy but not treated as the sole determinant of whether to invest.
“These changes absolutely need to be considered, but they are only one piece of the puzzle,” she said.
The fundamentals still matter most – location, asset quality, demand, scarcity, cash flow, long-term growth drivers and how the property aligns with the investor’s broader goals – is where the real decision-making should sit.”
Ms Jennison said the buyer pool was likely to rebalance differently across markets depending on their reliance on investor activity.
“In markets where investors have been very active, we may see a slowdown,” she said.
“But in owner-occupier-led markets, once the headlines settle down, it is likely to be business as usual as the market finds a new equilibrium.”
She said REBAA members were already seeing signs that once the initial shock passes, many investors will return to the fundamentals that have always underpinned successful property decisions.
“People invest in property for long-term security, wealth creation and financial independence,” she said,
“Those motivations don’t disappear because of a single policy change. They simply require a more considered and strategic approach.”
ENDS
For more information or to organise an interview with Ms Jennison please contact:
Bricks & Mortar Media | media@bricksandmortarmedia.com.au | 0405 801 979
