Australian Real Estate and Banks "Housing implications from the Federal ..."

Research evidence excerpt

Australian Real Estate and Banks "Housing implications from the Federal ..."

Global Research

13 May 2026ab

Australian Real Estate and Banks Equities

AustraliaHousing implications from the Federal Budget

Real Estate

Solomon Zhang, CFA

Changes to CGT and negative gearing to hit investor demand Analyst

The 2025/26 Federal budget included two significant changes to the tax framework for solomon.zhang@ubs.com

residential investment properties, which will reduce after-tax property returns and crimp +61-2-9324 2007

investment demand. First, capital gains tax will be levied on real capital gains from 1 July Cody Shield, CFA

2027 onwards, replacing the 50% CGT discount which has been in place since Sep-99. Analyst

Second, negative gearing will no longer apply for established investment properties cody.shield@ubs.com

purchased after budget night, effective from 1 July 2027. To incentivise housing supply, +61-2-9324 2903

exemptions apply for purchasers of investment properties which qualify as 'new builds', John Storey, CFA

which retain the 50% CGT discount and the ability to claim negative gearing. Analyst

john.storey@ubs.com

Pricing and volume implications for the residential market +61-2-9324 3864

We separate implications for established vs. greenfield (development) housing markets, Miriam Pritchard

given the divergence in tax settings. 1) Established markets: Treasury's expected price Analyst

impact of -2% from the two policy changes sits at the low-to-mid range of prior miriam.pritchard@ubs.com

+61-2-9324 2270

independent estimates (-1% to -5% falls). UBS anticipates a price impact at the upper

end of the range (~4% fall vs. prior estimates), with risks skewing to the downside from Nicholas Sobolev

potential -ve sentiment shocks.