Most of the conversation right now is focused on the recent tax changes, but the real story is supply and demand.
Housing supply (h2)
Many commentators are highlighting that investors purchased around 40% of established homes last year.
What they fail to mention is that investors also sold around 40% of established homes.
The question now becomes:
Why would investors sell if existing properties retain their grandfathered tax benefits?
In fact, we’ve already seen signs of tightening supply, with reports suggesting around 15% of listings were pulled from the market following the budget announcement.
At the same time, builders are reporting a serious slowdown in new home sales.
That combination matters.
- Less existing stock for sale.
- Less new housing being built.
The broader market likely won’t fully appreciate the impact until the June quarter housing data is released later this year.
By then, much of the repositioning may have already occurred.
Housing demand (h2)
At the exact same time supply is tightening, Australia’s population growth outlook is increasing.
Migration forecasts have been revised higher, with Australia adding approximately 450,000 people per year, while another 450,000 people are currently waiting on visas.
This is all occurring while Australia was already underbuilding housing by an estimated 40,000 homes per year.
The result seems increasingly obvious:
Over the next 6–12 months, we expect significant pressure on the rental market.
Latest annual rental growth figures already show:
• Brisbane: +8.7%
• Melbourne: +6.3%
• Perth: +6.1%
• Adelaide: +4.6%
Some analysts are now forecasting rents could rise as much as 10% over the next 12 months if supply shortages continue.
Longer term, we also expect increasing focus on:
• New housing supply
• Higher-density housing
• Duplexes and subdivision opportunities
• Investment strategies aligned with future housing incentives
Take-away for property investors (h2)
Periods like this often create opportunity for people who understand the fundamentals before the broader market fully catches on.
At Custodian, our role is to help clients cut through headlines and focus on long-term strategy, market fundamentals, and positioning for the future.
If you’d like to discuss your current position or future opportunities, our team is here to help.
