How Tonight’s Budget May Impact the Property Market
Before this year’s Federal Budget, we decided to review 100 years of Australian housing policy. The pattern was clearer than expected: Australia has already tried to cool housing prices many times before. Not just once, not just recently, many times across the past century.
A few examples that stood out
1931 – NSW rent controls: Rents were reduced and evictions were limited to protect tenants during the Great Depression. But over time, some landlords became less willing to rent out homes, adding pressure to rental supply.
World War II – Rent and price controls: Prices were held down by law to control inflation. But the market became distorted, and demand returned quickly once controls ended.
1975 – Foreign investment review: Australia created a formal system to review foreign investment. The goal was not to ban foreign buyers completely, but to direct more capital toward new housing and development.
1985 – Capital gains tax introduced: Property gains became part of the tax system.
1985–1987 – Negative gearing restrictions: The policy aimed to limit investor tax deductions, but created strong political pressure and was reversed in 1987.
1999 – 50% CGT discount: Long-term asset holding became more tax effective, especially for assets held for more than 12 months.
Recent years – Foreign buyer surcharges and vacancy taxes: These policies stayed because they were narrow, targeted and easier to explain.
2019 – Labor’s proposed tax changes: Labor proposed changes to negative gearing and the CGT discount, but the proposal did not proceed after the election.
Three takeaways for investors
The same policy can affect different markets in different ways. Sydney, Perth, Brisbane and regional areas do not always respond the same way.
Policy details matter. New homes, established homes, investors, owner-occupiers and foreign buyers can all be treated differently.
Long-term value still comes back to fundamentals: population growth, jobs, rental demand, land supply and housing approvals still drive the bigger picture.
The real question with any budget announcement is not just what gets announced, it’s how each policy affects supply, demand and local market fundamentals. That is where the real investment impact usually sits.
This email contains general information only and does not constitute financial, legal or investment advice. Past performance is not a guarantee of future results. Always seek advice from qualified professionals before making investment decisions.