Speculation over negative gearing and CGT changes has prompted a pullback from property investors
Property investor participation in south-east Queensland has declined by more than 20% since the start of 2026, according to data from Brisbane-based agency Image Property.
The agency analysed more than 5,000 offers received on its listings between 1 July 2025 and 30 April 2026. In the second half of 2025, investors accounted for 28% of all offers.
Since January 2026, that figure has dropped to 22% — a fall of 21% — which the agency attributes to growing uncertainty over possible Federal Budget changes to negative gearing and the capital gains tax (CGT) discount.
The Australian Financial Review, citing people familiar with the Budget, has reported that Labor will grant property investors a one-year reprieve before the negative gearing and CGT changes take effect — though the reforms themselves appear certain to proceed.
"The moment the government began signalling possible cuts to negative gearing or the CGT discount, investor confidence took a hit across Southeast Queensland," said Joel Davis (pictured right), managing director at Image Property.
"We're seeing investors pause, hesitate or withdraw entirely and that hesitation is already flowing through to reduced rental supply. This is not sentiment or theory – it's real-time behavioural change across thousands of transactions."
The pullback coincides with vacancy rates across the region sitting at historic lows. Greater Brisbane is at approximately 0.9%, while the Gold Coast and Sunshine Coast are both at 1%. A healthy rental market is generally considered to require vacancy rates of between 2.6 and 3.5%.
"Reduced investor activity will only deepen the crisis if the mooted tax reforms become a reality next week," Davis said. "If investors continue to step back, vacancy rates will tighten even further and rents will rise.
"Young people will be squeezed hardest and not just in the rental market, but in their ability to save for a first home. The government has consistently struggled to deliver new rental supply, so if investors desert the market, where exactly is the new stock going to come from?"
Davis called on the Federal Government to adopt policies that encourage new housing supply rather than reduce investor incentives. "Maintaining the CGT discount and preserving negative gearing – at least for investors who buy or build new stock – would directly support the creation of additional rental homes," he said.
"If the goal is more supply, policy should reward the people actually providing it."
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