{"id":461805,"date":"2026-05-27T01:44:17","date_gmt":"2026-05-27T01:44:17","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/461805\/"},"modified":"2026-05-27T01:44:17","modified_gmt":"2026-05-27T01:44:17","slug":"government-cgt-changes-data-shows-the-times-property-investors-fled-the-market","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/461805\/","title":{"rendered":"Government CGT changes: Data shows the times property investors fled the market"},"content":{"rendered":"

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Property investors motivated by the potential for capital gains have exited the market when the chance of making money on their investment becomes pressured via interest rates or regulation, data shows.<\/p>\n

Over the past 12 years, there have been four dips in the value of lending to investors, as they were unable to access credit during periods of tightening, according to Tim Lawless, Cotality\u2019s executive research director. This has broadly tracked a skinnying in property prices.<\/p>\n

Experts say federal budget policy changes could spark another investor retreat, with industry commentators already seeing investors shying away from auctions over recent weeks.<\/a><\/p>\n

\u201cAustralian property investors \u2026 the primary motivation tends to be opportunities for a capital gain. They tend to move with the cycles, almost perfectly,\u201d Lawless said.<\/p>\n

\u201cThey\u2019ve really treated opportunities for cash flow, or yield, as an afterthought, probably because they know that they \u2026 previously can offset any sort of cash flow loss or rental loss on their tax income, their negative gearing strategy.\u201d<\/p>\n

\"ExpertsExperts say federal budget policy changes could see another investor retreat.Jason South<\/p>\n

But this could change following the 2026 federal budget<\/a>, which confirmed plans to curb negative gearing and limit the capital gains tax discount to new build properties. Some experts think these moves may make property investing less attractive<\/a>, while others are taking a \u201cwait and see\u201d approach on the impact of the reforms.<\/p>\n

\u201cIt\u2019ll be really interesting to see how the market reacts in these initial few months, but also in the longer term, when we look back in two years\u2019 time or three years\u2019 time,\u201d said Sally Tindall, Canstar director of data insights.<\/p>\n

\u201cA lot of it\u2019s driven by sentiment \u2026 particularly in investor lending and what they think the prospect of growth is in that property.\u201d<\/p>\n

Still, Lawless said the federal budget policy changes could have a negative impact on investor demand.<\/p>\n

Related Article\"The<\/a><\/p>\n

\u201cI think there\u2019s definitely going to be a portion of investors that simply choose not to invest in housing because it\u2019s becoming too hard,\u201d he said, noting that stamp duty or holding costs such as land taxes and council rates could also be disincentives.<\/p>\n

Some lenders have already updated brokers about changes to how negative gearing would be factored into serviceability calculations for established homes following the budget announcements.<\/p>\n

Lawless thought a portion of investors would consider newly built housing<\/a>, as that is exempt from the budget\u2019s negative gearing restrictions, due to begin in July 2027.<\/p>\n

\u201cPotentially this most recent tax policy change could be the straw that breaks the camel\u2019s back in some ways, and really disincentivises investment buying into the established market,\u201d said Lawless.<\/p>\n

Indeed, property investors have exited the market before when faced with changes. According to Cotality analysis, based on its own property value data and ABS lending data, investor lending has dipped four times since early 2014.<\/p>\n

Drops in investor lending were due to a \u201cmixture of cyclical and structural factors\u201d, Lawless said, including the rise and fall of housing prices as well as credit or monetary policy moves.<\/p>\n

\"InvestorsInvestors who want to maintain their strategy may need to look at new properties or off-the-plan, a broker said.Sitthixay Ditthavong<\/p>\n

The first dip was in March 2016, when the value of investment lending fell by 28.4 per cent in 12 months. The second was a slump that ran from March 2018 to June 2019, with the annual decline peaking at 28.3 per cent over the year ending March 2019.<\/p>\n

Related Article\"Lisa<\/a><\/p>\n

These two falls came after the Australian Prudential Regulation Authority, the banking regulator, put in place temporary rules designed to stem the flow of credit. The first in late 2014, required banks to limit growth in investor loan growth to no more than 10 per cent a year, while a second policy, announced in early 2017, imposed a 30 per cent interest-only mortgage limit.<\/p>\n

KPMG urban economist Terry Rawnsley said following the 2017 cap, there was a shift away from investor lending for around three to four years.<\/p>\n

\u201cAt the same time, property price growth eased, and state planning controls helped to halt the apartment market boom in Sydney and Melbourne,\u201d he said.<\/p>\n

A third dip came in the 12 months ending March 2023, when the value of investor lending fell 31.6 per cent, which Lawless said coincided with interest rates starting to rise from emergency lows in May 2022 as well as COVID-era support being removed. The fourth one was in June 2025, albeit still positive at 7.7 per cent growth over 12 months.<\/p>\n

\u201cEven though interest rates were still rising, the market rebounded pretty strongly through 2024, but just ran out of puff by the end of 2024, and it wasn\u2019t really until interest rates came down in February 2025 that the market got revitalised,\u201d Lawless said.<\/p>\n

\"SomeSome mortgage brokers say potential buyers are pulling out of deals.Joe Armao<\/p>\n

More recently, investor lending pulled back in the March quarter, with the total value of new investor housing loans falling by $1.3 billion, or 3 per cent, over the first three months of the year, according to ABS data.<\/p>\n

\u201cDespite the dip, the value of new investor lending remains well above the levels a year ago, up 25 per cent year-on-year,\u201d said Tindall.<\/p>\n

Over recent weeks, some real estate agents have reported<\/a> seeing fewer investors at auctions. Some mortgage brokers say potential buyers are pulling out of deals or looking at how to restructure their investments, as they try to understand how the budget policies may impact them.<\/p>\n

\u201cIt definitely has got investors second guessing and reassessing,\u201d said Matthew Mohl, head of private clients at mortgage broker Alcove Private.<\/p>\n

Mohl said for investors who want to maintain their strategy, buying new properties or off-the-plan may be \u201cthe only way forward on that front\u201d.<\/p>\n

Lawless said going forward the \u201crecipe for investment is probably going to have to change because investors won\u2019t have the crutch of negative gearing to lean on.\u201d<\/p>\n

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\"AliceAlice Uribe<\/a> is the deputy property editor at The Sydney Morning Herald and The Age.Connect via email<\/a>.From our partners<\/p>\n","protected":false},"excerpt":{"rendered":"Save You have reached your maximum number of saved items. Remove items from your saved list to add…\n","protected":false},"author":2,"featured_media":461591,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[114,268,85,46,266,267],"class_list":["post-461805","post","type-post","status-publish","format-standard","has-post-thumbnail","category-personal-finance","tag-business","tag-finance","tag-il","tag-israel","tag-personal-finance","tag-personalfinance"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/461805","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/comments?post=461805"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/posts\/461805\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media\/461591"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/media?parent=461805"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/categories?post=461805"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/il\/wp-json\/wp\/v2\/tags?post=461805"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}