Investor incentives remain, but the Government’s focus has clearly shifted toward delivering new housing stock
Leading into this year’s Federal Budget, there was significant speculation around negative gearing and capital gains tax concessions.
Understandably, that created uncertainty across the market, particularly among investors already navigating higher interest rates, tighter borrowing conditions and affordability pressures.
In the end, the dramatic changes many expected didn’t eventuate.
For investors purchasing eligible new residential property, negative gearing remains in place, depreciation benefits attached to new builds are unchanged, and long-term capital gains concessions continue to apply. That outcome removes a major layer of uncertainty that had been sitting over the market in recent months.
More importantly, it also gives a fairly clear indication of where Government policy is now heading.
The Government’s Focus Is Clearly on New Housing Supply
The broader direction coming out of this Budget is not the removal of investor incentives altogether, but rather the continued support of investment that contributes to additional housing supply.
Australia’s housing shortage remains a major issue, and the Government understands that private investment will continue to play a significant role in funding new residential construction.
As a result, new builds remain in a relatively favourable position from both a policy and taxation perspective.
For investors considering house and land or turnkey opportunities, that policy support creates a clearer framework than many expected heading into the Budget.
Why House and Land Continues to Gain Momentum
At the same time, broader market conditions are continuing to push both investors and owner-occupiers toward newer growth corridors.
The affordability gap between established inner-city housing and emerging growth areas has widened considerably over the past few years. Buyers are becoming more value conscious, while investors continue prioritising yield performance, depreciation benefits and long-term growth potential. Areas that may once have been overlooked are now attracting significantly stronger attention as infrastructure expands, new communities develop and affordability pressures reshape purchasing behaviour.
That shift has been building for some time, however current market conditions have accelerated it considerably.
What This Means for Investors
For investors, the Budget reinforces the idea that quality new housing stock remains strongly supported.That doesn’t mean every opportunity automatically stacks up. Fundamentals still matter. Location selection, builder quality, infrastructure investment and local supply pipelines all remain critical considerations. However, the overall direction is becoming easier to read.
The Government wants more housing delivered into the market, and policy settings are increasingly aligned toward supporting the part of the sector that contributes to that outcome. For investors already considering new residential property, the Budget likely creates more clarity than uncertainty.
Owner-Occupiers Are Also Adapting
Owner-occupiers are navigating many of the same affordability challenges. Interest rates, construction costs and general cost-of-living pressures continue influencing how and where people buy.
As a result, more buyers are prioritising:
- value over proximity
- turnkey solutions over renovation projects
- newer housing estates with expanding infrastructure
- growth corridors offering stronger long-term affordability
That trend is continuing to reshape demand across a number of key growth markets.
The View From Where We Sit
ALC has been sourcing, packaging and delivering new house and land packages across South East Queensland, Victoria and South Australia for over a decade. We’ve watched a number of policy cycles move through the market in that time.
This one is notable because the government hasn’t tried to remove investor incentives: it’s tried to redirect them. Toward new homes. Toward new supply. Toward the part of the market that adds to the number of dwellings available rather than recirculating ownership of existing ones.
That is the space ALC has always operated in, because quality new builds in well-selected growth markets have consistently made sense on the fundamentals.
If these changes have prompted questions from your clients, from your own planning, or from a broader sense that the market is shifting, we’re always happy to talk through what it means for the specific markets and products we work with.
Always direct your clients to a qualified financial adviser and accountant for advice tailored to their individual circumstances. The measures discussed here reflect the government’s budget announcements, which remain subject to final legislations.
