Federal budget changes to negative gearing and capital gains tax have added to existing pressures. “We’ve seen those three rate hikes from the RBA… and then additional pressure from the budget changes,” Saunders said. “It’s adding to the pressure that was already there.”
The reforms are intended to channel investment into new housing and improve affordability over time, but Saunders cautioned that supply constraints remain a significant obstacle. “Until you address those supply issues, we don’t see it making a meaningful dent,” he said, pointing to high construction costs, regulatory complexity and infrastructure bottlenecks as key barriers.
CommBank has also revised its house price outlook downward, now projecting flat national prices across 2026. “We now expect house prices to be flat over the course of this year,” Saunders said.
Sydney and Melbourne are expected to record near-term price declines as softer sentiment and reduced investor demand flow through those markets. Brisbane and Perth, where supply and demand are more tightly balanced, are expected to experience a smaller pullback.
On the risk of negative equity for buyers who entered the market ahead of the Budget, Saunders said exposure is likely to remain limited. “It’s a possibility that some first-home buyers could be tipped into negative equity, depending on their circumstances,” he said. “But we don’t expect this to be a widespread issue.”