You’ve probably noticed the headlines. Property price growth is stalling, the Reserve Bank has lifted rates three times this year, and the Federal Budget just rewrote the rules for property investors. If you’re weighing up whether to buy property in Australia or whether to hold off then the timing feels unusually complicated right now.
The honest answer is that “now” isn’t universally good or bad. It depends heavily on who you are. A first home buyer and a seasoned investor are looking at two very different markets right now, even though they’re reading the same news. This post breaks down what’s actually changed and what it means for each group.
What’s Actually Happening in the Market
Three things are colliding at once, and it’s worth separating them out.
Interest rates have moved higher. The RBA lifted the cash rate in February, March and May 2026, reversing the cutting cycle from the year before. Higher rates push up borrowing costs and cool buyer demand, which takes some heat out of price growth.
The Federal Budget changed property tax settings. From budget night, negative gearing deductions on new residential property investments can no longer offset your other income, like your salary. Existing investments are grandfathered, so this mainly affects new purchases going forward. From July 2027, the capital gains tax discount will shift from a flat 50% to a system based on how long you’ve held the asset, with a new 30% minimum tax rate on the taxable portion. Newly built dwellings get more favourable treatment than established property under the new rules, which is a deliberate push to steer investment toward new housing supply.
Forecasters disagree on the size of the hit. CommBank expects prices to end up around 3% lower than they otherwise would have been. AMP’s chief economist has flagged falls of up to 5% in the near term as investors reassess after-tax returns. Westpac expects capital city dwelling values to sit roughly flat for the year, with Sydney and Melbourne recording actual monthly falls, while smaller capitals like Perth and Adelaide keep growing. The federal Housing Minister has pushed back on the more dramatic forecasts, arguing the tax changes alone won’t be the main driver if prices do fall further.
The upshot: growth has clearly slowed from the strong run in 2025, but nobody serious is forecasting a crash. It’s a cooling, not a collapse and the effects are landing unevenly across cities and property types.
For First Home Buyers: A Rare Window Is Opening
If you’ve been trying to buy for the past couple of years, you’ll know how brutal it’s felt competing against investors at auction. That competition is now easing, and that changes your position more than the price falls themselves do.
Less investor competition works in your favour. Westpac expects new investor activity to fall by around a third in the near term as the tax changes bite. Fewer investors bidding against you at auction means fewer bidding wars over the exact three-bedroom house you actually want to live in even in suburbs where headline prices haven’t dropped much.
Flat or falling prices buy you time. When growth is stalling rather than sprinting, you’re not racing to buy before the market runs away from you. You can actually take a few extra weeks to get finance sorted properly, inspect more properties, and negotiate rather than panic-bid.
Rates cut both ways for you. Higher interest rates mean your borrowing capacity is lower than it would have been a year ago, so it’s worth getting a proper assessment of what you can actually borrow before you start looking. This is exactly where talking to a broker earns its keep — we can model your capacity against current rates and any government scheme you might be eligible for, so you’re shopping with a realistic number in mind.
Don’t wait for the “perfect” bottom. Trying to time the exact low point of a property cycle is a losing game even for professional investors. If a property suits your life and the numbers work at today’s rates, a slightly softer market with less competition is arguably a better entry point than waiting and hoping prices fall further while rates stay elevated.
For Investors: The Playbook Has Changed, Not Ended
If you’re an existing investor, the grandfathering provisions mean your current negative gearing arrangements aren’t retrospectively affected. It’s new purchases where the calculus has shifted.
New builds now have a clear tax advantage over the tax treatment when you buy an established property in Australia. Because negative gearing on new investment property has been preserved while established property investment loses that non-property income offset, the numbers increasingly favour new dwellings, off-the-plan purchases, and knockdown-rebuild strategies over buying an existing house to rent out.
Your after-tax return calculation needs an update. Run your numbers again rather than relying on assumptions from a year ago. The combination of a higher cash rate and the loss of the income offset on established properties can meaningfully change whether a deal still stacks up. This is worth doing with your broker and accountant together before you commit to anything.
Softer prices can mean better entry points, if your fundamentals are sound. A cooling market with less competition can work in an investor’s favour too, particularly for new-build purchases where the tax settings are now more favourable. The catch is financing: with rates higher than a year ago, you need to stress-test serviceability more carefully than you might have previously.
CGT changes reward patience. The move to indexation-based capital gains tax from July 2027 changes the maths on how long you hold an asset. Shorter-term flips become less attractive relative to longer holds, which is worth factoring into your exit strategy from day one rather than as an afterthought.
Diversify how you think about “investment grade.” With Sydney and Melbourne facing the most direct price pressure while Perth, Adelaide and Brisbane continue growing, a purely Sydney or Melbourne-focused strategy might not be the safest bet right now. Worth widening the lens.
So, Is Now a Good Time to Buy?
For first home buyers, the current conditions – cooling prices, easing investor competition, and time to breathe rather than panic-bid are about as favourable as they’ve been in years, provided you can still comfortably service a loan at today’s rates.
For investors, the opportunity hasn’t disappeared, but the rules of the game have changed. New builds are now the more tax-effective play, and the numbers need re-running before you commit.
In both cases, the right move on whether to buy property in Australia or not depends on your borrowing capacity, your goals, and how the new tax settings actually affect your specific situation – not on trying to guess where the market bottoms out. That’s exactly the kind of thing worth talking through before you make an offer.
If you want to know what you can actually borrow under the current rates and rules, get in touch with Ingram Financial and we’ll run the numbers with you.
This article is general information only and doesn’t take into account your personal financial situation. Speak with a mortgage broker and financial adviser about your specific circumstances before making property decisions.
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