Tuesday, 12 May 2026
Arrivals hit new highs; Budget reforms
Asking rents climb
Tonight's Budget will deliver an increase in the effective rate of capital gains tax, and will limit negative gearing benefits to new builds from 1 July 2027.
The housing market will still be mostly driven by demand from immigration and supply, but this will represent a landmark shift in tax policy for housing from a year's time.
Today the ABS figures showed that permanent and long-term arrivals rose to a new high of 1.165 million.
It looks like the slowdown in net immigration ended back in early 2025, with numbers pumping higher again since then.
The Federal Budget tonight forecasts net overseas migration to ease over the next two years, but on this evidence those hopes may not be realised.
In related news, SQM Research reported a national rental vacancy rate of just 1.2 per cent in April.
Asking rents have reaccelerated, rising by 7.3 per cent over the year, with tax changes to negative gearing set to add renewed pressure to the rental market.
You can read SQM's release here.
Budget reforms
In the Budget tonight, Treasurer Chalmers introduced wholesale changes to the tax system, that will impact housing in the name of intergenerational fairness, but also in doing so also shares, commercial property, industrial property, and all other assets.
In short...
The Federal Budget announced that negative gearing will be restricted to new build properties from 1 July 2027.
This will see a surge of financial and property advisers recommending off the plan properties from next year, at least until everything ends in a heap.
The Housing Industry Associated has noted that in an already fragile environment for apartment pre-sales the increased uncertainty will reduce rather than increase housing supply, as will the expected slower housing price growth.
Treasury reported that housing price growth will be reduced by 2 per cent, resulting in 35,000 fewer new dwellings being delivered, though the government hopes to offset this by investing in infrastructure for new housing supply.
Negative gearing benefits will be grandfathered for existing investors.
Moving forward...
For new investors in established properties after 1 July 2026 any net rental losses will be carried forward until they sell or the property becomes cashflow positive, when the tax benefit can finally be realised.
It's hard to see how this can result in anything other than a cliff-edge for investment in established rental housing until markets recalibrate.
In terms of market impacts, nationally rental yields of about 3½ per cent for houses and 4½ per cent for units will probably need to rise by at least 50 basis points one way or another.
Whether that comes from lower prices, higher rents, or a combination of the two...result will be granular and dependent on local market conditions.
This remains to be seen over the next couple of years.
But by way of a stylised example roughly a 5 per cent decline in nominal prices and a 10 per cent increase in rents would roughly account for a 50bps increase in rental yields.
Rental markets are extremely tight in Darwin, Hobart, Adelaide, Perth, Brisbane, and Sunshine Coast, so rents will likely increase in these markets.
In other areas, the middle price segments of the housing market will likely be the most impacted.
Top, middle, and bottom
In the upper price points wealthier Aussies are likely to put more wealth into the one remaining capital gains tax free investment, being the principal place of residence.
At the bottom end of the market, rising interest rates and surging construction costs mean that developers have largely stepped away from building entry level units, and this part of the market is being supported by the 5 per cent deposit scheme for first homebuyers.
There will be less incentive for owners of established rentals to repair and maintain properties, and the standard of rental properties is likely to be reduced.
Treasury forecasts than housing prices will rise by 2 per cent less than was expected before the change, though this lower growth is expected to reduce new housing supply by around 35,000 units.
It looks as though changes to the capital gains tax discount will not be grandfathered.
The minimum rate of capital gains tax going forward will be 30 per cent, so equities, stock markets, and risk-taking in business more broadly will also be adversely impacted.
This was a surprising move, as it doesn't seem to align comfortably with the notion of progressive tax legislation.
Treasurer Chalmers also announced the introduction of a 30 per cent minimum tax on the taxable income of discretionary trusts, effective from 1 July 2028, which will mark an end to income splitting and other household cashflow tricks to minimise taxation via trust structures.
Transition period and election
Housing market sentiment is already weak and will likely weaken further following today's Budget, which broke further election pledges (last time around it was $275 off your household energy bills, this time it was a whole bunch of taxes which were apparently off the table a year ago).
The opposition has already stated that it will oppose the changes to negative gearing and capital gains tax, and there will be some challenges getting the reforms through the Senate, which will require the support of the Greens and perhaps some crossbenchers.
This sets the scene for a more keenly contested election in or before May 2028, with the opposition likely to propose a reversal of such reforms.
New Zealand went down a similar route on interest deductibility, but after investment in housing was significantly reduced the changes will quickly reversed with the change of government.
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1. Download our property buying guide
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You can also check out a few of our recent property purchases here.
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3. Subscribe for my free daily blog
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By the way, I'm an 8-times published author on finance, investing, and business, so you can check out some of my books here.
My new book, co-authored with Cate Bakos is available to buy here or on Amazon here - check out our free Buy Right podcast series here.
4. Work with me privately
For a limited time you can book in a free diagnosis call with me here, so book in a call today.
Budget night live
Budget night live
Details below:
Join us for Budget night to discuss the looming changes to negative gearing and capital gains taxation.
Details below:
You can join on MCG's Facebook page or YouTube channel.
See you there.
---
1. Download our property buying guide
Download our free property buying guide here.
You can also check out a few of our recent property purchases here.
Get in contact with us today if strategic property investment is your thing.
2. Subscribe to our Top 10 Podcasts for Investors
Listen in to our podcasts
The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with over 50,000 audio downloads per month, and growing fast.
And our popular Low Rates High Returns Show also remains available on Spotify.
3. Subscribe for my free daily blog
Subscribe for my free daily blog here.
You can also catch up with me daily on Twitter here, where I'm far too active daily and have over 17k followers.
By the way, I'm an 8-times published author on finance, investing, and business, so you can check out some of my books here.
My new book, co-authored with Cate Bakos is available to buy here or on Amazon here - check out our free Buy Right podcast series here.
4. Work with me privately
For a limited time you can book in a free diagnosis call with me here, so book in a call today.
Sunday, 10 May 2026
Podcast: Budget risks for property
Property Podcast
This week Chris and I discussed the renewed surge in construction costs, and the risks in the upcoming Federal Budget for property markets.
Here's the rundown of what we discussed:
"In this week’s 2 Sense episode of the Australian Property Podcast, Pete Wargent and Chris Bates unpack a fresh construction squeeze just as the housing market heads into a Budget week that could reshape investor behaviour.
They break down the numbers behind the build-cost blowout, including the sharp rise in the cost of delivering a dwelling since 2019, and explain why higher diesel, concrete, piping, plumbing supplies and financing costs all matter. If feasible projects become marginal and marginal projects become unfeasible, the supply response Australia desperately needs gets pushed even further out.
The conversation then shifts to the policy risk. Pete and Chris explore reported changes to capital gains tax and negative gearing, the possibility of investor demand changing shape, and why anti-investor settings can still have unintended consequences for rents, supply and affordability. They also touch on softer conditions in Sydney and Melbourne, rising mortgage stress at the edges, stronger rental yields and what buyers and sellers should be thinking about strategically.
The episode rounds out with listener questions on whether to sell an investment property and move more capital into ETFs, and how to think about the right balance between property and shares for long-term retirement goals. It’s a practical, timely listen for anyone trying to read the next phase of the housing market."
Tune in here (or click on the image below):
You can also watch the YouTube version here:
---
1. Download our property buying guide
Download our free property buying guide here.
You can also check out a few of our recent property purchases here.
Get in contact with us today if strategic property investment is your thing.
2. Subscribe to our Top 10 Podcasts for Investors
Listen in to our podcasts
The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with over 50,000 audio downloads per month, and growing fast.
And our popular Low Rates High Returns Show also remains available on Spotify.
3. Subscribe for my free daily blog
Subscribe for my free daily blog here.
You can also catch up with me daily on Twitter here, where I'm far too active daily and have over 17k followers.
By the way, I'm an 8-times published author on finance, investing, and business, so you can check out some of my books here.
My new book, co-authored with Cate Bakos is available to buy here or on Amazon here - check out our free Buy Right podcast series here.
4. Work with me privately
For a limited time you can book in a free diagnosis call with me here, so book in a call today.
Podcast: How to buy in a hot versus cool market
Property Podcast
I joined Amy on the podcast to talk about how to buy in hot and cold property markets.
Tune in here (or click on the image below):
---
1. Download our property buying guide
Download our free property buying guide here.
You can also check out a few of our recent property purchases here.
Get in contact with us today if strategic property investment is your thing.
2. Subscribe to our Top 10 Podcasts for Investors
Listen in to our podcasts
The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with over 50,000 audio downloads per month, and growing fast.
And our popular Low Rates High Returns Show also remains available on Spotify.
3. Subscribe for my free daily blog
Subscribe for my free daily blog here.
You can also catch up with me daily on Twitter here, where I'm far too active daily and have over 17k followers.
By the way, I'm an 8-times published author on finance, investing, and business, so you can check out some of my books here.
My new book, co-authored with Cate Bakos is available to buy here or on Amazon here - check out our free Buy Right podcast series here.
4. Work with me privately
For a limited time you can book in a free diagnosis call with me here, so book in a call today.
Thursday, 7 May 2026
More work to be done...
RBA hikes rates
Not for the first time, markets have been having an absolute ball overnight on fresh news that the Iranian conflict might be soon drawing to an end.
Hardly something we haven't heard before, it must be said, but crude oil prices initially tumbled dramatically to under $90, before settling around -7 per cent lower on the day at around $95.
There now appears to be a greater prospect of oil prices dropping back to under $85/barrel, though this rollercoaster ride may have a few more twists in it yet.
Australia's 3-year bond yield has eased back down to where it was trading in early March, at 4.57 per cent, having briefly run above 4.9 per cent in March.
Earlier this week, the Reserve Bank of Australia hiked the cash rate target back to the previous cycle high of 4.35 per cent, with trimmed mean inflation forecasts pared back a little (to be back in the target band in the second half of next year, and down to 2½ per cent by June 2028).
Source: RBA, Statement on Monetary Policy
The RBA has now lifted the cash rate target in February, March, and May this year, so we may be due for a pause while an assessment is made of the impact of tighter policy, and any potential shifts in sentiment resulting from the forthcoming Federal Budget.
The central bank will be hoping that higher policy rates and the considerably stronger Aussie dollar (now up by more than 11 per cent over the past year versus the US dollar) will rein back inflation.
The higher Aussie dollar should help to make imported goods cheaper, such as for cars, petrol, electronic goods, and clothing, for example.
Still, market pricing suggests that the rate hiking cycle might have a way to go yet.
Another 25 basis points hike is priced in for later this year, with the terminal rate looking set to peak by March 2027.
The Federal Budget will be released in the evening of May 12, at 7.30pm AEST.
Join us for a live watch and review with some industry commentary.
---
1. Download our property buying guide
Download our free property buying guide here.
You can also check out a few of our recent property purchases here.
Get in contact with us today if strategic property investment is your thing.
2. Subscribe to our Top 10 Podcasts for Investors
Listen in to our podcasts
The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with over 50,000 audio downloads per month, and growing fast.
And our popular Low Rates High Returns Show also remains available on Spotify.
3. Subscribe for my free daily blog
Subscribe for my free daily blog here.
You can also catch up with me daily on Twitter here, where I'm far too active daily and have over 17k followers.
By the way, I'm an 8-times published author on finance, investing, and business, so you can check out some of my books here.
My new book, co-authored with Cate Bakos is available to buy here or on Amazon here - check out our free Buy Right podcast series here.
4. Work with me privately
For a limited time you can book in a free diagnosis call with me here, so book in a call today.
Tuesday, 5 May 2026
ausbiz TV: Is the latest RBA rate hike a turning point for housing?
ausbiz TV
I joined Andrew G on ausbiz TV to discuss the Reserve Bank of Australia hiking the cash rate target by 25 basis points back to the previous cycle highs of 4.35 per cent.
We also discussed the upcoming Budget reforms.
Tune in here (or click on the image below):
---
1. Download our property buying guide
Download our free property buying guide here.
You can also check out a few of our recent property purchases here.
Get in contact with us today if strategic property investment is your thing.
2. Subscribe to our Top 10 Podcasts for Investors
Listen in to our podcasts
The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with over 50,000 audio downloads per month, and growing fast.
And our popular Low Rates High Returns Show also remains available on Spotify.
3. Subscribe for my free daily blog
Subscribe for my free daily blog here.
You can also catch up with me daily on Twitter here, where I'm far too active daily and have over 17k followers.
By the way, I'm an 8-times published author on finance, investing, and business, so you can check out some of my books here.
My new book, co-authored with Cate Bakos is available to buy here or on Amazon here - check out our free Buy Right podcast series here.
4. Work with me privately
For a limited time you can book in a free diagnosis call with me here, so book in a call today.
Monday, 4 May 2026
198k dwellings approved over the year
New headwinds for construction
House approvals have picked up pretty solidly over the two years since the beginning of 2024.
It's essentially been just an increase in approvals in the booming Western Australia housing market to date.
Undersupplied Sydney and Brisbane appeared to be just shaping higher in the early part of 2026, but interest rate hikes in February, March, and May may well prove to quell the uptrend.
Apartment approvals have also picked up in Brisbane, Adelaide, and Perth over the past couple of years.
After a surge of unit approvals in February - in Melbourne and regional Queensland - saw over 19,000 approvals in a month, March saw a step back to a total of 17,300 approvals seasonally adjusted.
Detached house approvals have steadily picked up to be at the highest level since 2021, mostly thanks to Greater Perth.
Over the year there were around 198,000 dwellings approved, which is obviously some way behind the implied target of 240,000.
Overall, approvals have picked up over the past two years, but a series of interest rate hikes may now serve to kill off the uptrend.
Labour and materials shortages in regional Australia make further upside a challenge from here, while prices aren't rising in Sydney and Melbourne, making new unit projects a challenging sell in the current environment.
A renewed surge in construction costs also appears likely to tip some marginal projects from feasible to unfeasible.
---
1. Download our property buying guide
Download our free property buying guide here.
You can also check out a few of our recent property purchases here.
Get in contact with us today if strategic property investment is your thing.
2. Subscribe to our Top 10 Podcasts for Investors
Listen in to our podcasts
The Australian Property Podcast is rapidly becoming one of Australia's biggest business podcasts, now with over 50,000 audio downloads per month, and growing fast.
And our popular Low Rates High Returns Show also remains available on Spotify.
3. Subscribe for my free daily blog
Subscribe for my free daily blog here.
You can also catch up with me daily on Twitter here, where I'm far too active daily and have over 17k followers.
By the way, I'm an 8-times published author on finance, investing, and business, so you can check out some of my books here.
My new book, co-authored with Cate Bakos is available to buy here or on Amazon here - check out our free Buy Right podcast series here.
4. Work with me privately
For a limited time you can book in a free diagnosis call with me here, so book in a call today.
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