Federal Budget 2026 Could Accelerate Demand Across Australia’s New Property Market
Existing Investors Appear Protected
One of the most important takeaways from the proposed reforms is that existing property owners appear largely protected through grandfathering provisions.
Investors who owned property prior to budget night are expected to retain existing negative gearing benefits, while also preserving access to current capital gains tax arrangements for gains accrued before the reforms commence.
This may help reduce the likelihood of sudden market disruption while encouraging many existing investors to hold property longer term, potentially tightening available housing supply further.
New Apartments and Units Positioned to Benefit
The clearest beneficiary from the proposed reforms appears to be newly constructed housing, particularly apartments and unit developments located within major growth corridors and infrastructure connected urban markets.
Under the proposed framework, new builds are expected to retain access to negative gearing benefits, while investors may also be able to choose between the traditional 50% CGT discount or the new inflation indexed taxation model.
This creates a strong incentive for investment into new apartments, off the plan projects, and build to rent developments as investors increasingly shift away from established property.
According to Black Swan Property Group Director Sophia Wang, the reforms could significantly reshape investor demand over the coming years.
“This could become one of the biggest shifts toward new property investment we’ve seen in decades,” said Sophia. “Well positioned apartment and unit developments may see particularly strong demand as investors look for opportunities that still benefit from favourable tax treatment.”
Sophia noted that supply shortages across key urban markets may further support demand for quality new unit stock.
“With population growth continuing to place pressure on rental markets, quality new apartments in well connected locations may become increasingly valuable over the coming years,” she said.
Strong Population Growth Continues Supporting Demand
At the same time, Australia’s long term housing demand outlook remains well supported, with migration forecasts continuing to remain elevated through to 2028.
Following the post COVID peak of more than 528,000 net overseas migrants in 2022 to 2023, migration levels have moderated but remain historically strong, with approximately 446,000 arrivals recorded in 2023 to 2024 and forecasts still sitting above 295,000 for 2025 to 2026.
This continued population growth is placing ongoing pressure on rental markets and housing supply across major capital cities, particularly in well connected and supply constrained locations.
“The underlying fundamentals supporting Australian property remain very strong,” Sophia said. “Population growth, limited housing supply, and continued rental demand are all contributing to long term support for quality property assets.”
Construction Challenges May Continue Supporting Prices
While the Budget aims to stimulate new housing supply, rising construction costs and labour shortages continue creating challenges for developers nationally.
Construction inflation remains elevated, while financing and material costs continue impacting project feasibility across many markets.
As a result, fewer projects are progressing at the pace required to meet demand, potentially placing further upward pressure on the value of completed new apartments and units in key growth corridors.
A Market Entering a New Phase
For decades, Australian property investment has largely focused on established property and tax driven strategies.
The proposed Budget reforms may mark the beginning of a broader shift toward investment strategies centred around housing creation, long term supply shortages, and rental demand fundamentals.
As market conditions continue evolving, quality apartment developments located within supply constrained urban markets may become increasingly attractive to both investors and owner occupiers alike.
At Black Swan Property Group, we’ll continue monitoring the proposed reforms closely while helping clients navigate the evolving property market with confidence and clarity
Disclaimer: The information provided is general in nature and does not constitute legal, financial, or tax advice. Please consider your own circumstances and seek independent professional advice. Terms & Conditions apply.
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