Have we reached the peak in property prices?

Have property prices already peaked, and is now the right time to buy? This is a question that many aspiring homeowners are weighing up.

While it’s difficult to predict exactly where the market will peak or trough, many investors focus on longer-term trends rather than short-term movements. With the Federal Budget reshaping the investment landscape at the same time as interest rates push higher, the answer is layered.


Cost-of-living relief was a key theme of the 2026–27 Federal Budget, with the Government scaling back negative gearing and Capital Gains Tax (CGT) concessions for investors in existing properties. The Treasury says this could help tens of thousands of Australians buy their first home over the next decade, by making more established homes available to owner-occupiers rather than investors. 

With that in mind, here are a few broader insights to help you understand the current market environment.


Price growth is slowing

According to Cotality data, every capital city across Australia recorded a slower pace of growth in April, suggesting a moderation in housing market conditions.

The national home value index rose 0.3% over the month, marking the slowest rate of growth since January 2025. A range of factors are influencing this trend, including affordability and borrowing capacity constraints, along with broader economic conditions such as interest rates, inflation and consumer sentiment.


The property market is fragmented

While growth slowed across all capital cities in April, market conditions are still playing out quite differently depending on the location.

Sydney and Melbourne both saw values ease by 0.6% over the month. Sydney’s prices are now sitting around 1% below their November peak, while Melbourne has seen a slightly larger pullback, with values below recent highs.

At the same time, other markets are continuing to move forward. Perth recorded a 2.1% increase in April, while Brisbane, Adelaide and Darwin also saw values rise—albeit at a more measured pace than earlier in the year.

Overall, the data highlights how varied the property landscape remains, with different cities responding in different ways to the current environment.


There’s been a slowdown in buyer demand

Consumer confidence has fallen sharply in recent weeks. The ANZ-Roy Morgan Australian Consumer Confidence Index fell to one of its lowest levels on record, dating back to 1973. This suggests many households may be feeling more cautious in the current environment.


This shift is also being reflected in market activity. Property sales across the capital cities are reportedly lower than this time last year and below the five-year average, pointing to a moderation in buyer demand.

At the same time, listing levels are starting to lift in some markets. In Sydney and Melbourne, advertised stock is now sitting above average levels, giving buyers slightly more choice than they’ve had in recent months.


Conditions look a little different across the mid-sized capitals, where available stock remains relatively tight. While listings are beginning to rise, they are still below typical levels for this time of year.

Auction activity has also been on the slow side, with clearance rates trending lower since earlier in the year. This may reflect a more measured approach from buyers as they navigate changing interest rates and broader market conditions.


Lower segments are experiencing more growth

Across the capital cities, lower-priced properties have generally been recording stronger growth than the upper end of the market. This may reflect a combination of factors, including borrowing capacity constraints and support available to first home buyers.

Government support schemes for eligible buyers may also be contributing to activity in this segment by helping more buyers enter the market.

The difference is particularly noticeable in Sydney. Lower-tier house values are up 2.9% over the past year, while values at the upper end of the market have declined by 3.3%, highlighting the varied conditions across price points.


Regional markets are proving more resilient

Regional markets have shown more resilience compared to the broader slowdown seen in capital cities. This may reflect a mix of factors, including relative affordability and continued movement of people towards regional areas.

Over the first four months of 2026, the combined regional index rose 4.2%, compared to 1.8% across the capital cities, highlighting the different pace of growth between these markets.


The broader outlook

Most forecasters still point to continued, if modest, growth through 2026. Earlier this year, KPMG forecast that house values could rise by around 7.7% and units by 7.1%, with supply constraints and rental demand expected to support growth.

More recently, some forecasts have been revised lower, reflecting ongoing uncertainty in the global and domestic environment, including inflation and geopolitical factors. Current estimates for capital city growth are closer to 2–3% this year.

What seems clear is that the stronger conditions of 2025 are behind us for now. Higher rates, reduced investor activity in established properties, and cautious consumers all point toward a more measured market.


So, is now a good time to buy?

Whether or not now is the right time to buy largely depends on your unique situation and goals. While increasing interest rates and affordability constraints create challenges, there are also opportunities for prepared buyers in the right locations.


If you do decide to jump in, we can run you through your finance options. As your mortgage broker, we’ll compare the market for you and line you up with a competitive home loan that meets your needs. Get in touch today.

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Are investors changing course after the new negative gearing reforms?

August 20, 2026
The Federal Government’s negative gearing and Capital Gains Tax (CGT) reforms represents a significant shift in how future property investments will be treated for tax purposes. For investors considering their next purchase, the changes may influence everything from the type of property they buy to how they assess cash flow and long-term returns. Legislated, many investors are reassessing their property purchasing plans and strategies. The core reforms have now passed Parliament, although some of the more detailed implementation rules are still being finalised ahead of their commencement. If you’re looking to buy an investment property down the track, here’s what you need to know about the reforms and how they change the playing field. What is changing? On 12 May, Treasurer Jim Chalmers handed down the Federal Budget , which included major changes to negative gearing and CGT rules. From 1 July 2027: Negative gearing for residential property investments will be limited to new builds. The 50 per cent CGT discount will be replaced with cost base indexation and a 30 per cent minimum tax rate on capital gains. Properties held before the announcement (7:30pm AEST 12 May 2026) will be exempt from the negative gearing changes, while the CGT reforms will only apply to gains accruing after 1 July 2027. How have the reforms affected the market and investors? When the changes were announced, Australia’s property market had already been cooling, driven by a combination of cash rate hikes, housing affordability constraints, the Middle East conflict, and cost-of-living pressures. But the Federal Budget reforms dampened the market even further, with auction clearance rates slipping to levels worse than during the pandemic, and investor confidence dropping. One survey of more than 1,400 Australian investors found that more than 80% believed residential investment property had become less attractive following the 2026 Federal Budget changes. At the same time, 51.5% said they planned to hold their existing investments and wait to see how the proposed legislation evolves. Overall, the survey offers a useful snapshot of investor sentiment, although it should not be taken as representative of every Australian property investor. Key shifts in strategy Since the announcement, there have been early signs that some investors are reconsidering where and how they invest, although it is too soon to say how the reforms will reshape the broader property market over the long term. New builds could attract more attention With negative gearing limited to new builds from 1 July 2027, there are signs that some investors are pivoting towards newly constructed properties. Data from property fund manager Oliver Hume shows the proportion of new-build sales to investors in Victoria has risen above 40 per cent for the first time since December 2024, for example. Experts say investors will likely switch to new units or houses on the outer city fringes, while suburbs in the middle of cities could experience a decrease in stock, potentially resulting in higher rents . Holding or grandfathering existing assets Investors with established properties purchased before 12 May 2026 may choose to retain those properties, as they are exempt from the negative gearing reforms and can continue to access the existing tax treatment that applies to grandfathered properties. These investors can keep negative gearing the property against their wage income and retain the full benefits until they sell. Cash flow could become an even bigger consideration Historically, negative gearing enabled investors to offset losses on established investment properties against their taxable income. But under the changes , investors purchasing established properties would no longer receive immediate tax relief on those losses. The changes may prompt some investors to focus more heavily on rental yield , cash flow and long-term returns when assessing investment opportunities. As a result, positively geared properties could become more attractive relative to investments that rely heavily on tax concessions to support returns. Some may also look for properties with the potential to transition to positive gearing over time as rental income grows. What about the changes to SMSF borrowing? In addition to the CGT and negative gearing reforms, there are new rules around self-managed super fund (SMSF) borrowing. From 10 August 2026, SMSFs can no longer use Limited Recourse Borrowing Arrangements (LRBAs) to buy residential property. Current LRBAs are grandfathered. SMSFs can still purchase residential property outright using cash , and LRBAs can be used to acquire business real property. The changes have been met with mixed reviews among investors, and some critics questioning whether it would make it harder for Australians to build retirement wealth . Some experts also believe that the changes could increase the appeal of commercial property among SMSF investors, although SMSF property investment can involve complex lending, tax and superannuation requirements, so specialist financial, legal and tax advice is particularly important. Considering an investment property purchase? The changes in the budget mean investors may need to think differently about the type of property they purchase, its cash flow and how the investment fits within their broader financial plans. While we can’t provide tax or financial advice, we can help you understand the lending side of the equation. We can review your borrowing capacity, compare suitable loan options and help you understand how different property and loan scenarios could affect your repayments and overall finance structure. If you’re considering your next investment property, get in touch! We can help you explore your finance options so you can make your next move with a clearer understanding.