Property investors, buyers and mortgage brokers are closely watching tonight’s Federal Budget amid growing speculation that changes to tax settings could reshape investment strategies across Australia’s housing market.
The debate has intensified in recent days as Treasurer Jim Chalmers flagged concerns about housing affordability and the interaction between the tax system and the property market, while finance commentators and industry figures warned that investor behaviour is already shifting ahead of any formal announcement.
Real estate trainer and commentator Tom Panos said even a single Budget measure could alter the way Australians approach property investment.
“Tomorrow night one line in the federal budget could make one property more,” Panos said in a social media video released ahead of the Budget.
He suggested investors may increasingly focus on developments and higher-yielding assets if tax concessions attached to traditional investment strategies are reduced.
“The game used to be buy an existing property, negative gear it, wait for it…” Panos said.
He pointed to growing interest in “land with upside, duplex sites, townhouse developments, boarding houses,” as investors reassess future returns and taxation outcomes.
The comments come after weeks of speculation surrounding potential changes to capital gains tax concessions and negative gearing, although the federal government has not confirmed any policy shifts.
Property commentator Tom Panos says investor behaviour could shift sharply if tax settings change, with buyers moving away from traditional negatively geared properties towards higher-yield and development-focused assets such as duplex sites, townhouse projects and boarding houses
Speaking last week, Chalmers acknowledged mounting pressure in the housing market and said younger Australians were finding it increasingly difficult to buy homes.
“I think it’s really clear to a lot of Australians that the housing market and the tax system is making it harder for people, particularly for younger people,” Chalmers said during a Sky News interview.
“Our motivation there is not to make judgments about people who’ve done well, but to make it easier for people who feel locked out of housing because of the way that our housing market and our tax system interacts.”
Mortgage broker Julian Finch has warned that uncertainty itself is already affecting the market.
“We are seeing hesitation, second-guessing and in some cases, people walking away from property investment altogether,” Finch said.
“When confidence drops, markets slow. It’s that simple.”
Panos argued the market could move towards investments with stronger rental returns and development potential if tax settings change.
“So suddenly the investor mindset changes from not what suburb should I buy…” he said.
“Cash flow is about to become sexy again.”
He also suggested some older apartment stock could come under pressure if investor demand weakens.
“Meanwhile generic older apartments could feel the pressure because future…” Panos said.
“It may completely change what Australians want to buy.”
Housing affordability remains one of the central economic and political issues facing the government ahead of the Budget, with rents, mortgage repayments and housing supply all under pressure across major Australian cities.
Industry groups, economists and investors are expected to scrutinise any changes closely once Treasurer Chalmers hands down the Budget tonight.
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