Investors are pausing acquisitions and reassessing strategies as federal Budget tax proposals cast a shadow over property markets nationwide
Uncertainty over the federal Budget's proposed tax changes has prompted investors to pull back and buyers to adopt a more cautious approach, marking a shift in property market sentiment nationally, according to the Real Estate Buyers Agents Association of Australia (REBAA).
In its end-of-financial-year market update, REBAA said buyer and seller behaviour had changed noticeably in 2025/26, driven largely by the proposed changes to negative gearing and Capital Gains Tax (CGT).
The group expects the second half of 2026 to be defined by selective competition, higher stock volumes in some markets, and a more balanced dynamic between buyers and sellers pending policy clarity.
"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," said REBAA vice president Zoran Solano (pictured right).
"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."
Sydney dwelling values fell 0.9% in May and sit 2.1% below their November peak, according to Cotality data. REBAA NSW state representative Linda Johnson described a transitioning market, with upper-end houses facing greater scrutiny while units hold up better. Regional NSW has proved more resilient, with dwelling values up 2.4% over the first quarter and 8.9% annually, per Cotality and NAB data.
Melbourne's market has remained broadly stable, though conditions vary by segment. Quality homes in established eastern and inner suburbs continue to attract competition, while overpriced or compromised stock faces resistance. Investor enquiry has declined noticeably since the Budget announcement, compounding existing pressures including land tax obligations and rental compliance costs. Regional Victoria has remained comparatively resilient, supported by tight rental markets and attractive yields.
In Queensland, the market has shifted from a strong seller's environment towards more balanced conditions. Buyer sentiment has softened, with investors pulling back amid CGT and negative gearing uncertainty. Properties below $1 million continue to attract solid enquiry from first home buyers and owner-occupiers, while stock above that threshold is seeing fewer inspections and slower decision-making unless it offers clear value or lifestyle appeal.
Perth recorded dwelling value growth of 9.5% year-to-date and 25.8% annually to a median of $1,050,354. Listings have risen sharply from a record low of under 2,000 to 5,733, and days on market have extended from around nine days to 14. Investor activity has slowed markedly since Budget night, with many reassessing strategies around the proposed CGT and negative gearing changes.
Meanwhile, Adelaide continued its growth run, with dwelling values up 8.2% annually to a median of $891,004, and the median house price reaching $1.049 million. Units rose 11.32% annually to a median of $675,000. Rental conditions remain tight, with combined rents up 3.1% year-on-year. REBAA state representative Matt O'Donoghue said investor caution around proposed reforms could see the market plateau in the near term.
Canberra ended 2025/26 in a more stable position, with annual dwelling value growth of 5.6% to April 2026, though values remain 1.4% below the May 2022 peak, per Cotality. Two significant policy developments will shape the outlook: the ACT Government's "missing middle" subdivision reforms and the removal of stamp duty for first-home buyers. Rising rates and government debt exceeding $12 billion continue to pressure holding costs.
In Tasmania, the housing market recovered confidence during 2025/26. Hobart's median house price sits at approximately $746,000, with annual growth of around 8–9%. Regional markets outperformed, with Launceston up 10.6% annually to approximately $628,000 and the North West rising 18.9% to around $576,500. Investor activity improved, supported by the state's rental supply shortage and historically low vacancy rates.
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