Underquoting is one of the biggest frustrations for first home buyers in Melbourne. You see a property advertised within budget. You inspect it. You like it. You speak with your broker. You imagine yourself living there. You may even pay for building and pest inspections or contract advice and other due diligence. Then auction day arrives and the property sells well above the quoted range. That is not just disappointing. It wastes time, money, energy and confidence. For first home buyers, underquoting is dangerous because it creates a false sense of affordability. It makes buyers chase properties they were never realistically going to secure. Why Underquoting Hurts First Home Buyers First home buyers are usually still learning the market. They may not know which comparable sales matter. They may not understand how buyer competition affects price. They may not know how to read a Statement of Information properly. They may assume the selling agent is giving them reliable guidance, and this is a risky assumption. Selling agents represent the seller. Their job is to secure the highest possible price and best terms for the vendor. The sales process is wired for the seller, not the buyer. That is why first home buyers must look past the marketing narrative and assess the property value independently. The Price Guide Is Not the Property’s True Value A price guide is not an independent valuation. It is part of the sales agent's sales campaign. A property quoted at one level may sell much higher if the home has strong owner-occupier appeal, scarce features, a good school zone, good land content, a better street, low supply or multiple emotional buyers competing. This is where first home buyers often get trapped. First home buyers compare the quoted price guide against their budget. Experienced buyers compare the property against the market. That means looking at recent sales, land size, building condition, location quality, floorplan, renovation standard, zoning, overlays, buyer demand and resale appeal. The question is not: “Can I afford the price guide?” The question is: “What will this property realistically sell for — and is it worth that price?” Data Does Not Lie, But Narratives Do Every property has a sales story. “Great first home.” "Perfect entry-level opportunity.” “Renovated and ready to enjoy.” “Won’t last long.” “Good growth.” "Best pocket in the suburb." While some of that may be true, most of it are marketing fluff. At Concierge Buyers Advocates, we ignore the noise and assess the evidence. We look at recent comparable sales, suburb trends, property condition, contract risks, zoning, historical data and buyer demand. We do not rely on the agent’s narrative. We assess the property independently, and build our own price opinion. That is how first home buyers avoid walking into auction blind. How to Read the Statement of Information In Victoria, residential properties must come with a Statement of Information. This can be useful, but it should not be read lazily. You need to look at: The indicative selling price. The properties being compared to. The date of each sale. The distance from the subject property. The land size, building type, condition and location of each comparable. Whether the selected sales are inferior or superior to the property being sold. A "comparable" sale may look similar on paper but be very different in reality. A townhouse on a better street may not compare with one on a main road. A renovated house may not compare with an original-condition house. A school-zone property may not compare with one outside the zone. This is where inexperienced buyers can misread value. How First Home Buyers Can Protect Themselves Before you spend money on reports or emotionally commit to a property, you should know: What similar properties have sold for. How strong buyer demand is. Whether the property has scarce or compromised features. Whether the location supports long-term resale. What price would be considered fair value. What price becomes too expensive. What your walk-away number is. This, unfortunately, is the part many first home buyers skip. They inspect first, fall in love second, then try to justify the price later. That is backwards. That is wrong. Price discipline must come before emotion. Why Auctions Make Underquoting Feel Worse Underquoting is especially painful at auction because auctions are designed to create pressure. A low guide attracts more buyers. => More buyers create more competition. => Competition creates urgency. => Urgency creates emotional bidding. That is how the sales campaign work. That is how buyers end up paying above fair value. The auction floor is no place for guesswork. By the time the auctioneer is calling for another bid, your strategy should already be locked in. If the price moves beyond your limit, you walk. How Concierge Buyers Advocates Helps Buyers Avoid Underquoting Traps At Concierge Buyers Advocates, we help first home buyers see through price guides and sales campaigns. We use AI-powered market analysis, comparable sales research, suburb data, property due diligence and local buyer advocacy experience to assess what a property is really worth. We tell you whether the property is worth pursuing before you waste time and money. We help you understand: Whether the guide is realistic. Whether the property is suitable. Whether the location makes sense. What the property is likely to sell for. What you should pay. When to walk away. This gives first home buyers the confidence to act quickly when the right property appears — and the discipline to avoid the wrong one. The Bottom Line Underquoting is not just a pricing issue. It is not because the agent is bad at appraisals. It is a strategy issue. If you rely only on the selling agent’s price guide, you are playing the game on the seller’s terms. The smarter approach is to build your own evidence-based view of value before you bid, negotiate or emotionally commit. At Concierge Buyers Advocates, we help first home buyers in Melbourne cut through underquoting, sales spin and auction pressure so they can buy with clarity and confidence. The goal is not to win any property. The goal is to buy the right property, at the right price.

Property investment in Melbourne and Australia used to be simpler. Buy a property, collect rent, sell, calculate CGT, pay taxes. That changed significantly on Budget Day, 12 May 2026. From 7.30pm on that day, negative gearing rules have changed, and CGT is calculated differently. What's changed in Budget 2026? Couple of major changes were announced during Budget 2026. Negative Gearing. Investors used to be able to use negative gearing to offset their other income in the Financial Year. That changed. Losses for established properties bought after budget day, can now only be used to offset future income from the investment, such as when your property turns positively geared or when you sell. New builds still enjoy the ability to offset against other income. Capital Gains Tax (CGT). Method for CGT calculation will also change. Instead of the simpler 50% discount method, gains are now indexed. This applies to both established properties and new builds. However, new builds has the added advantage of being able to chose between the 50% method and the indexation method, depending on which is better for them. Now, this leads to other knock-on effects. Mortgage lending and serviceability calculation is affected, as the "benefit" of negative gearing can no longer be considered as "income", thus, reducing the borrower's serviceability. On average, serviceability dropped between 10-30%, depending on the borrower's other financial situation and tax brackets. These changes created some significant uncertainties in the property market, and made the property investment landscape more "exciting" and confusing for investors. Investors will now have to consider if they should buy new builds or established, the effect on their serviceability, etc. Established Properties vs New Builds. Which is better for property investors? Property investors are often told to chase tax benefits, depreciation, negative gearing, and “brand new” property. But when you strip away the brochure language and actually run the numbers, the conclusion can look very different. In this example, we compare four possible investment properties over a 10-year holding period: Property A: $1 million established house in middle-ring Melbourne Property B: $800,000 new build in a Melbourne growth corridor with average fundamentals Property C: $750,000 new build in a Melbourne growth corridor with better fundamentals Property D: $600,000 established regional property The question is simple: Which property creates the most wealth in the New Budget, once we include rent, cashflow, capital growth and CGT? The Four Investment Options For this discussion we will discuss 4 typical Melbourne investment scenarios: Property Typical Location / Type Purchase Price Starting Rent Rent Growth Capital Growth A Average Metro Melbourne established $1,000,000 $800/wk 5% p.a. 6% p.a. B Growth-corridor new build, average fundamentals $800,000 $450/wk 2% p.a. 3% p.a. C Growth-corridor new build, better fundamentals $750,000 $450/wk 3% p.a. 4% p.a. D Regional established $600,000 $500/wk 5% p.a. 5% p.a. The assumptions used are: Purchase price, Rent in the area, Growth Numbers used are typical numbers for Victoria 80% loan-to-value ratio 6.5% interest-only loan 10-year holding period Rent grows annually based on the stated assumptions Property is sold in year 10 Indexation CGT method used Excludes vacancy rates considerations Note: This is a modelling exercise, not tax or investment advice. Always assess every property independently, do not rely on sales and marketing brochures. Rental Yield: The First Warning Sign Before getting excited about tax benefits or capital growth, let us look at the rent, and the gross yield Property Purchase Price Starting Rent Gross Yield A $1,000,000 $800/wk 4.16% B $800,000 $450/wk 2.93% C $750,000 $450/wk 3.12% D $600,000 $500/wk 4.33% Both established properties performed well. Property D has the strongest yield. Property A is also respectable. But New Builds in Growth corridor, Properties B and C, are much weaker on rent. This is the most significant problem with many new-build investments. The tax benefits may look attractive, but the actual rent often does not support the purchase price, due to poorer location, over supply of rental properties and high vacancy rates, typical in Growth Corridors. This is the first lesson: Tax benefits do not fix weak rent. 10-Year Rental Income Now let’s look at how much rent each property collects over 10 years. Property Starting Rent Rent Growth Year 10 Rent 10-Year Total Rent A $800/wk 5% p.a. $1,241/wk $523,240 B $450/wk 2% p.a. $538/wk $256,223 C $450/wk 3% p.a. $588/wk $268,255 D $500/wk 5% p.a. $776/wk $327,025 This is where an average new build, Property B, looks very weak. Property B costs $800,000, but only collects around $256,000 rent over 10 years. Established Regional property, Property D, costs $600,000 and collects around $327,000 rent over the same period. In other words, the cheaper regional property collects around $71,000 more rent than the more expensive growth-corridor new build. That is not a small difference. That is the difference between an investment property helping you and one quietly chewing through your wallet. 10-Year Cashflow Next, we compare rent against interest and estimated holding costs. Property 10-Year Rent 10-Year Interest Other Holding Costs 10-Year Cashflow A $523,240 -$520,000 -$100,000 -$96,760 B $256,223 -$416,000 -$80,000 -$239,777 C $268,255 -$390,000 -$75,000 -$196,745 D $327,025 -$312,000 -$70,000 -$54,975 On cashflow, the winner is clearly the established property in regional location, Property D. It has the lowest debt, strongest starting yield, and lowest 10-year holding loss. Established property in metro Melbourne, Property A is more expensive to hold, but still manageable compared with New Builds, Properties B and C. The average New Build, Property B is the weakest. It suffers from low rent, low rent growth, and a large enough loan to make the holding cost painful. With better fundamentals, Property C, improves on Property B because the better fundamentals results in stronger capital growth, and rent growth. But it is still significantly weaker on cashflow than both established properties, Property A and Property D. Negative Gearing Treatment on Investment Properties This is where the Budget 2026 tax changes becomes important. The new budget changes stops investors of established from using investment losses to offset other earned income, such as salary. Losses are still kept with the investors and can only be used to For this modelling exercise: Property A is established, so it does not receive an income-tax offset from rental losses. Property D is established, so it also does not receive an income-tax offset from rental losses. Property B is new, so it can use rental losses to offset income tax. Property C is new, so it can also use rental losses to offset income tax. Property Pre-Tax Cashflow Income-Tax Offset? Estimated Tax Saving After-Tax Cashflow A -$96,760 No $0 -$96,760 B -$239,777 Yes +$76,729 -$163,048 C -$196,745 Yes +$62,958 -$133,787 D -$54,975 No $0 -$54,975 Tax helps Property B and Property C. But notice something important: Even after tax benefits, Property B and Property C still have worse cashflow than Property D. This is the danger of buying for tax. Tax softens the pain. It does not remove the pain. 10-Year Capital Growth Now let’s look at capital growth. Property Purchase Price Capital Growth Sale Value After 10 Years Capital Gain A $1,000,000 6% p.a. $1,790,848 $790,848 B $800,000 3% p.a. $1,075,133 $275,133 C $750,000 4% p.a. $1,110,183 $360,183 D $600,000 5% p.a. $977,337 $377,337 This is where established in metropolitan Melbourne, Property A dominates. A middle-ring Melbourne property has the advantage of land scarcity, deeper owner-occupier demand, better resale liquidity, and stronger long-term buyer depth. The established property in regional Victoria, Property D performs well too. Despite starting at only $600,000, it produces a higher capital gain than both new builds, Property B and revised Property C, over 10 years. Property D is cheaper than both B and C, has better rent, and still produces stronger capital growth than both. In the right location, with better growth, Property C is improved, but it still does not beat D on total capital gain. The average New Build, Property B, is clearly the weakest from a growth perspective. CGT Using the Indexation Method Now let’s include CGT into the discussion. Using an indexation-style CGT method, the cost base is adjusted for inflation before the taxable gain is calculated. For this example, we conservatively assume 2.5% annual indexation. Property Capital Gain Indexed Taxable Gain Estimated CGT After-Tax Capital Gain A $790,848 $510,763 -$234,909 $555,939 B $275,133 $51,065 -$19,566 $255,568 C $360,183 $150,120 -$65,406 $294,777 D $377,337 $209,286 -$93,214 $284,122 This part is interesting. New Builds with good fundamentals, Property C, slightly beats the established property in regional Victoria, Property D, on after-tax capital gain because indexation shelters more of its gain relative to its purchase price and growth rate. But investing is not just about capital gain after CGT. We still need to add cashflow. Final Result: Total Profit and ROI This final result, studies the effect of Established vs New Builds. It considers initial buying cost, holding costs, rent, growth, CGT, negative gearing, etc. This gives a more complete picture for anyone looking to determine New Build vs Established. In this table, we calculate the Return on Investment (ROI). In the simplest form, this is calculated as: Total Profit ÷ Initial 20% Deposit Property Initial Deposit After-Tax Capital Gain After-Tax Cashflow Total Profit After CGT & Tax Treatment Cash-on-Cash ROI A $200,000 $555,939 -$96,760 $459,179 229.6% B $160,000 $255,568 -$163,048 $92,520 57.8% C $150,000 $294,777 -$133,787 $160,990 107.3% D $120,000 $284,122 -$54,975 $229,147 190.9% Final Ranking This is the most telling conclusion. For a typical 10 year investment, and considering the negative gearing, overall growth, etc, the overall picture is clear. Rank Property Total Profit Cash-on-Cash ROI Verdict 1 Established Metro Melbourne Property A $459,179 229.6% Best long-term wealth creation 2 Established Regional Victoria Property D $229,147 190.9% Best risk-adjusted and cashflow option 3 New Build Better Growth Corridor Property C $160,990 107.3% Improved new-build option, but still behind 4 New Build Average Growth Corridor Property B $92,520 57.8% Weakest overall Investing in Established properties is still not dead. It is still workable, even with an average established property. With good fundamentals, the established property in metropolitan Melbourne can be many times better than investing in New Builds, solely to utilise tax incentive. The Problem with Investing in Established Property in Metropolitan Locations But there is a catch. Given almost ALL established properties in metropolitan area are negative from day one, and you can no longer use your rental loss to offset your other income, you will now need to be in a better financial position to invest in established properties. You need deeper pockets to hold the property until it turns positively geared. Are established properties being reserved for the rich ones with deeper pockets? It seems so. The Problem with Investing in New Builds For a long time, many experienced property investors have avoided new builds, especially those in outer growth corridors. The reasons are not new, and they have not changed. New builds often suffer from: Poor locations Oversupply Higher vacancy risk Lower rental yields Uncertain build quality Poor workmanship, even from some well-known builders Limited land scarcity Weaker long-term owner-occupier appeal And now, we may need to add another concern: poorer resale value. Why Will New Builds Have Poorer Resale from Here On? The fundamental issues with new builds have not disappeared. If a property is in a weaker location, surrounded by competing stock, built to average standards, and attracting lower rent, those problems do not magically disappear just because the property is new. The bigger issue is resale. A new build can only be “new” once. As the new build buyer, you may enjoy the benefit of negative gearing incentives and depreciation. But the next buyer who purchases the property from you will not receive the same new-build advantage. To them, your property is now simply an established property, competing against other established homes, but often in a location with less scarcity, weaker rental demand, and more surrounding supply. That changes the equation. When the tax advantage disappears, the property must stand on its own fundamentals. If those fundamentals are weak, the resale value is likely to suffer. Negative gearing tax incentives exists to ease the pain of investing in one. What This Tells Us Is it Still Worthwhile Investing in Established Properties? Yes — and the numbers show why. Based on the growth and rental return assumptions above, which are fairly typical of quality established properties in metropolitan Melbourne and selected parts of regional Victoria, investing in established properties can still make strong financial sense. The numbers do not lie. Even without the same tax incentives available to some new builds, well-selected established properties can still outperform because they often have stronger fundamentals: better land value, greater scarcity, stronger tenant demand, deeper resale markets and more reliable long-term growth. And because the assumptions used in this comparison are REAL and relatively conservative, there is good potential for a well-chosen established property to outperform these projections. But it has a catch. Because losses from established investment properties bought after 12 May 2026 can no longer be used to offset other earned income, you now need to be able to sustain this "loss", at least for the first 5-10 years. Well chosen this period of "loss" will be shorter, as our example has shown. Our property broke even in the 3rd year. Let’s explain this further below. Established Metropolitan Melbourne Property A: The Wealth Builder The Established Property in Metropolitan Melbourne is still the clear winner. It has the highest purchase price and the highest debt, but it also has the strongest capital growth. Even without annual negative gearing income-tax benefits, it still produces the highest total profit and the highest ROI. The Established Metropolitan Melbourne Property is not winning because of tax. It is winning because it is the better asset. The strong fundamentals excels over tax benefits. It has: stronger capital growth larger asset base middle-ring Melbourne land value better scarcity deeper owner-occupier demand stronger resale appeal This is the classic strength of a quality established Melbourne property. It may not be the easiest to hold for some investors, but over the long term, the compounding effect is powerful. Established Regional Victoria Property D: The Portfolio Builder Regional Property is the best risk-adjusted option. It does not beat an established property in metropolitan Melbourne on total wealth creation, but it is much easier to hold. It has: lowest debt best starting yield strongest cashflow lower deposit requirement strong cash-on-cash ROI decent capital growth For an investor on a $130,000 income, Property D may be the more practical choice. It is easier to hold and may preserve more borrowing capacity for the next purchase. The risk is that it is regional. If you are unfamiliar with regional locations, most regional locations are best avoided. Regional properties can have smaller buyer pools, less liquidity, and more dependence on local employment. So the location selection becomes critical. But based on these numbers, established property in regional Victoria, Property D is a very strong investment. It is not the highest wealth creator, but it is the most comfortable and balanced. Most cheap regional properties are the type of property favoured by investors, as that allow them to boast they have 10/20/30 properties around BBQ pits. But as professional investors, we investor in good fundamentals. We look past the need to have x number of properties by age y. That's good for boasting, does nothing to build wealth. If you are unfamiliar with investing in properties in regional Victoria, it's always recommended to engage buyer's advocates with extensive experience in regional investment properties. In addition to servicing premium clientele, Concierge Buyers Advocates also specialise in regional investment locations, for our investors. Our property picks have consistently outperformed popular locations, such as Ballarat, Bendigo, Traralgon. Recent purchases have more than 50-60% growth in 3 years, better than hotspots in Brisbane and Perth. This property grew a stella 65% in 3 years! And it is right here in Victoria. Are New Builds Better Investment Properties than Established Properties? Before writing off new builds entirely, it is worth looking at the numbers properly. The fact that new builds may be eligible for tax write-offs against other income can appeal to some investors. Cash-strapped investors, or investors wanting to offset property losses against their earned income, may still consider new builds as part of their strategy. However, as shown above, investors should not automatically expect the returns from new builds to be as appealing as established properties. The issue is not simply tax. The issue is fundamentals. Many new builds are located in outer growth corridors, where there may be weaker land scarcity, higher surrounding supply, lower rental demand, poorer resale depth and more competition from similar properties. That does not mean every new build is a poor investment. But it does mean investors need to be far more careful. A new build may help with tax. But an established property with stronger fundamentals may still create more wealth. Let’s look at the numbers in more detail. New Build with Good Fundamentals Property C: Better, But Still Not Outstanding New Build in Growth Corridor with better fundamentals is better. At $750,000, with 4% capital growth and 3% rent growth, it is clearly better than a New Build with average fundamentals (Property B). The annual tax offset also helps. It is easier to hold, but it still falls behind an established property in regional Victoria because the rent is too weak for the purchase price. It gets worse when you factor in the higher vacancy rates, typical of Growth Corridors. Even with tax benefits, Property C produces: lower total profit than D lower ROI than D worse cashflow than D That is the issue. The tax benefit helps, but the underlying asset still needs to carry itself. Property C is acceptable, but not compelling. New Build with Average Fundamentals Property B: Nice in Brochures, Sad to Own New Build in a Growth Corridor with average fundamentals is the weakest. It may look good in a sales brochures because it is new and looks attractive in tax benefits in the sale presentation. But the fundamentals are poor: low starting rent low rental yield weak rent growth weak capital growth high cashflow loss growth-corridor supply risk lowest total profit lowest ROI Even after including the tax benefit, Property B only produces around $92,520 total profit over 10 years. On a $160,000 deposit, that is only 57.8% cash-on-cash ROI over 10 years. That is not exciting. Once stamp duty, selling costs, vacancies, repairs, land tax and property management fees are included, the outcome may look even weaker. The Big Lesson for Property Investors The biggest lesson is simple: Tax benefits help, but they do not beat asset quality. A weak property with tax benefits is still a weak property. A strong property without tax benefits can still outperform because the growth, rent and resale demand are stronger. That is exactly what happens here. Established Properties (Property A and Property D) do not receive annual negative gearing income-tax offsets in this model, yet they still finish first and second. Why? Because the assets are better. Established Property in Metropolitan Melbourne has the strongest capital growth. Established Property in Regional Victoria has the strongest cashflow and excellent return on the initial deposit. New Builds (Property B and Property C) receive tax benefits, but their weaker rental and growth profile drags them down. Final Conclusion If the investor wants maximum long-term wealth creation, an established Metropolitan Melbourne property (Property A) is the clear winner. If the investor wants stronger cashflow, lower holding stress and a more balanced portfolio strategy, an established Regional Victorian property (Property D) is the better practical option. If the investor insists on maximising the negative gearing tax benefit and buying a new build, a New Build with good fundamentals Property C is much better than an average New Build Property B. Property B should be treated with caution. It relies too heavily on tax benefits and not enough on investment fundamentals. The final ranking is: Established Metropolitan Property A — best wealth creator Established Regional Property D — best risk-adjusted option New Build with Good Fundamentals Property C — acceptable new-build option New Build with average Fundamentals Property B — weakest overall In plain English: Metropolitan Established property builds the most wealth. Regional Established property gives the best balance. New Build with good fundamentals is acceptable but uninspiring. New Build with average fundamentals is the one that needs a glossy brochure to look attractive. Still not sure if you should invest in an established property or new build? Have a chat with our buyers advocates.

Amidst the doom and gloom of multiple interest rates hikes, savvy buyers are snapping good deals. Good deals are still selling fast, and a fantastic deal will still sell within 3 days. And this is one such property. It was bought within 3 days of listing. Here is our story of one of our recent buys. In the Melbourne real estate market, people say you must be crazy to sell your house over the Christmas period. Many buyers (and agents) are away on holidays, and it is pointless selling when no-one is buying. This is one-such property. It was listed the week before Christmas. And we took it off the market within a week. Deal Snapshot Location: Northern Victoria Buyer type: Investor Strategy: Private sale Campaign timing: Day 3 inspection, multiple offers pre-inspection end Purchase price: $430,000 Vendor ask / guide: Guide range: $415,000–$425,000 Negotiated outcome: we paid above price guide - read why below Settlement: Feb 2023 Land / dwelling: 3 bed | 2 bath | 900 sqm Conditions: confidential Now, here is the story. How Do Buyers Advocates Select The Properties We Buy? We're always monitoring the market for good deals, and this caught our attention. Due diligence showed this property is within 5 minutes of major universities (yes, 2 universities), major shopping mall, and hospital. A second set of shopping malls and hospital is a short 15 minutes away. The bonus is, it is on a large 900sqm block of land, with an outstanding potential for further manufactured growth. Research data also showed the location has already experienced 40-50% growth in 3 years, and it has another 20%+ more growth potential in the near future. It is what our client was looking for, and it ticked all boxes. We presented this property to our client and we were given the go ahead to acquire it. We expected strong competition for this regional property in Northern Victoria — but not this strong. The inspection was held on just the third day of the campaign, and eight other buyer groups were already through. That’s serious heat, especially after seven interest rate hikes in seven months and with Christmas around the corner. This is exactly why regional buying demands stricter due diligence than metro. Regional property purchases operate on a different level of complexity. It is best left to the experts, if you’re not 100% confident in what you’re doing, it’s easy to miss the risks, and overpay for them. Our checks flagged this as an A-grade investment property, so we knew it would move fast. And it did. Before the inspection even wrapped up, two offers had already landed with the agent. Because the selling agent knows our process and track record, we secured an extra 18 hours to prepare a properly structured offer — and we used every minute of it. How Do Buyers Advocates Made Offers For the Properties? When our Buyers Advocates inspects a property, we include a preliminary assessment of its condition. We are trained builders and our buyers advocates have the right experience to assess the condition of the building. This one passed our walk-thru inspection, and with our green-light from a subsequent formal inspection, our client had given us the go-ahead to purchase it. We know this is grade A investment property, and we were expecting a few other offers. So we had to be different. While our Principal Buyers Advocate, Rayson, was driving back to Melbourne, he was mentally putting together an offer strategy. It has to be creative, and something different. That evening, we discussed a few offer strategies with the clients. This strategy was so specific to this client and property that we are unable to disclose the details. Some parts of the offer strategies were also untested, but following discussions with our network of finance, legal and real estate professionals, we are pretty certain that it can be done. Our offer price was going to be fair. We are always after the best deal for our clients, and we do not want to overpay. Thus, price is not going to be our strong selling point in this offer. The next day, we presented our offer. The agent confirmed there are 7 other offers, and our offer price wasn't the best. There were other higher offers. But our offer was "the most attractive". Outcome of Our Offer Just two days before Christmas, the agent called. Our offer was accepted at $430k! For our investor client, it was the perfect Christmas gift, timed to perfection. The selling agent expressed relief that the offer came from a professional Buyers Advocate, acknowledging that "BAs like us aren't sitting around." They understood that when we present an offer, it's backed by thorough buyer qualification and market knowledge. We know the true value of the property, and we ensure our clients are fully prepared and financially capable before the offer is even made. This level of professionalism reassures the sales agents that they won’t be wasting time with unqualified or unprepared buyers. With our clients, the only hurdle was potentially the price. It wasn't the most attractive price, but the professionalism by being represented by a professional buyers advocates and the preparation of the offer package and deal make our offer the easy choice. The property was successfully settled in February 2023. We then handpicked one of the top property managers in the area to oversee the rental, and it was leased within a week—thanks to the prime location and extreme low vacancy rate in the area. Why Did We Overpay for the Property? A question many buyers have in this market is: “Did we just overpay?” And if we paid above the asking price, how can that still be a good buy? First, asking price isn’t market value. In competitive campaigns, the asking price is often just a starting point. What matters is whether the final price stacks up against other factors, such as, the property’s fundamentals, and the buyer’s strategy. And secondly, we didn’t “overpay” in the way most people assume. Our offer was strong and attractive, and yes, it was above the asking price, but it wasn’t the highest. Another higher offer came in and the vendor didn’t choose it. The benefit of being represented by a Buyers Advocate When you’re represented by a professional career buyer, the selling agent and vendor gain confidence that your offer is real, qualified, and low risk, with a far higher chance of going unconditional without drama. In plain English: it’s not just about price. It’s about certainty. That certainty can beat a higher offer, and in this case, it did. Now, here's the reason and why we paid above asking price for it, and the proof why this strategy is appropriate. It's not a wild guess. It's not a gamble. It's a calculated move, with the right insights Here's the Reason Why We Paid More Prices are Growing for Good Properties In just two short months, by March 2023, similar properties in the same neighborhood were selling for $480k to $500k—a remarkable 10% growth in value in 2 months. But our client isn’t selling just yet. They have bigger plans, and we’re working closely with them to unlock the full potential of this property and maximize their investment. Price update in 2026 Fast forward to September 2024, and the property is now valued at nearly $600k, marking an impressive 40% increase in just 18 months. Even more remarkable is that this growth occurred during a period of rising and high interest rates, proving that with the right strategy and expert guidance, significant gains are possible, even in challenging market conditions. Price update in 2026 In June 2026, 3 years after the purchase, this property is now worth $700k, in its original form, as is. a 63% increase in 3 years. Renovate examples are easily selling for around $850k in the area. The best news? At a weekly rent of $580, this is a high-growth positively geared property. So, did we overpay? Maybe we did. But look at the returns. Help for Home Buyers and Investment Property Buyers This is just one of the examples of how we turn property dreams into reality, combining expertise, timing, and a commitment to our clients’ success. If you are after a similar good deal, get in touch. While we cannot guarantee every property will be as good or similar, you can be certain that we will get the property for the best price for you. Get in touch now if you want the confidence to grab your prime property in this hot market. More home and investment property buying news and tips here.

When searching for an independent buyers' advocate, a medical specialist, BOOM suburbs, or an investment platform and ideas, turning to Artificial Intelligence for an unbiased recommendation feels like a logical first step. AI algorithms have no emotions, take no bribes, and process vast quantities of data in seconds. It seems like the ultimate objective tool. But it is a trap. The assumption that AI is independent and neutral is not just slightly flawed; it is fundamentally incorrect. Far from being an unbiased referee, AI is a mirror of an internet marketplace increasingly distorted by deep pockets, manufactured reputations, and sophisticated digital manipulation. If you rely on an AI to choose an advisor or a service provider or property recommendation, you aren't getting objective truth. You are getting a summary of the highest bidder's marketing campaign. In this digital landscape, it is effectively the blind leading the blind. Or even worse: the thief baiting the naive. The "Pay-to-Win" Internet Economy To understand why AI fails at objectivity, we have to look at its fuel supply: the public internet. AI models do not experience the physical world. They do not sit in on real estate negotiations, verify property settlement figures, or interview past clients face-to-face. They gather information by crawling websites, review platforms, forums, and social media channels. This introduces a devastating structural asymmetry. In high-stakes industries like property advocacy or financial consulting, there are two distinct types of players: The Honest Operator: These boutique businesses charge honest, fair, transparent fees and dedicate their resources to client outcomes. Because their margins are tight, they do not have tens of thousands of dollars a month to spend on search engine optimization (SEO) agencies, content farms, or aggressive online reputation managers. The Predatory "Spruiker": These operators often "double-dip," charging the client an upfront fee while secretly taking massive, undisclosed kickbacks from developers to offload low-performing or "lemon" properties. A single hidden kickback can yield tens of thousands of dollars in pure profit—funds that are immediately reinvested into dominating the digital landscape. Deep-pocketed, shady operators can easily afford to buy hundreds of verified five-star reviews, deploy automated bots to post positive testimonials on forums, and commission dozens of search-optimized fluff articles that praise their "unrivaled expertise." This manufactured digital footprint is known as astroturfing. How the AI Swallows the Lie and Regurgitate as Truth An AI model possesses no human intuition, skepticism, or real-world cynicism. It cannot read a beautifully worded, glowing review and sense that the syntax sounds exactly like an offshore click-farm or a paid copywriter. It cannot pick up a phone to verify if a case study actually occurred. Instead, an AI looks at mathematical consensus, keyword density, volume, and consistency across the web. If five hundred astroturfed blogs, paid articles, and fake profiles state that a particular agency is "ethical, data-driven, and highly recommended," the AI registers that volume as a dominant, objective fact. Consequently, the AI becomes an automated megaphone for the wealthiest liar. It systematically penalises the quiet, honest boutique professional who refuses to play the digital manipulation game, while confidently steering unsuspecting consumers directly into the arms of sophisticated corporate scammers. Why AI Should Never Be Relied Upon for Major Financial Decisions Using an AI to summarise technical concepts or write code is highly effective. Using it to make a qualitative judgment call on who to trust and what to buy with your life savings is incredibly dangerous, for three critical reasons: Total Lack of Accountability: If an AI recommends a predatory buyers' agent or a fraudulent financial advisor and you lose your deposit, the AI bears zero liability. You cannot sue an algorithm, and the tech conglomerate that built it is shielded by standard "informational purposes only" disclaimers. The Illusion of Authority: AI models are masters of languages and express themselves with absolute clarity and confidence. They do not say, "I am recommending this firm because they bought 400 fake reviews on Trustpilot." Instead, they present the recommendation with structured, authoritative prose that mimics a seasoned human expert, disarming your natural skepticism, often without even quoting the source of information. The Feedback Loop of Falsehoods: Once an AI starts recommending a highly visible, shady player, automated scrapers and blogs copy that text and republish it elsewhere. Future AI models then crawl those new pages, reinforcing the original lie. Consequently, the scammer's paid footprint becomes permanently baked into the internet's infrastructure. We are already seeing this play out: shady buyers' agents with almost zero real-world experience are managing to boast hundreds of flawless reviews across the web. The Human Blueprint for Safety In an era where the internet can be bought and AI models can be easily manipulated, the only true defense is to treat all online consensus as marketing fluff until proven otherwise. Never let an AI do your vetting. Instead, strip away the digital noise and look strictly at un-fakeable, real-world metrics: verify active state licenses on government databases, cross-reference professional histories via corporate registries, and demand legally binding, written contracts stating that your advisor receives zero third-party kickbacks. Your safety lies in hard contracts and human skepticism, not algorithms. Look at AI as your super-sized Google. It is no different. It is not your 100%-correct professor. Source of this Article You might be surprised if we disclose this is what Google's very own AI engine, Gemini, said. But it is. Even the AI model knows AI can't differentiate the truth. Kudos to Google Gemini.

Case Study: A Two-Week Return Road Trip to Alice Springs That Was Worth Every Kilometre Buying a holiday home in Alice Springs isn’t hard to shop for online. It’s hard to buy properly when you’re interstate, can’t inspect easily, and don’t want to rely on sales agents for the million-dollar decision. In 2024, a returned client approached us after struggling to find an experienced buyers agent willing to support a purchase in Alice Springs. They wanted genuine buyer-side representation — not advice filtered through the vendor’s agenda. For a $1 million purchase, that’s not paranoia. That’s good risk management. We accepted the brief. And within three weeks, we secured the right property for them. The real challenge: boots on the ground Shortlisting remotely was the easy part. The bigger challenge was doing the job properly: inspection, due diligence coordination, location, safety and managing the purchase process end-to-end while being physically present when it mattered. So we did what serious buyer advocacy requires sometimes: We got in the car. We embarked on an epic two-week return drive from Melbourne to Alice Springs, combining essential on-site work with a route through iconic outback towns and regions including Port Augusta, Woomera and Coober Pedy, plus the Barossa and Riverland on the way through. Long drives of 300-700km legs, big skies, zero shortcuts — and the confidence that comes from seeing the property and location, firsthand. And yes, this is exactly why Rayson loves the work. Road trips included. Results required. Brief Snapshot Client goal: Buy a high-quality holiday home in Alice Springs with true buyer-side representation Purchase price: ~$1,000,000 Engagement to shortlist success: 3 weeks Distance travelled: 7,500 km Duration: 13 days Costs: Confidential at the client’s request What we delivered Interstate buyer advocacy and strategy Property shortlisting and suitability assessment (remote + on-ground) On-site inspection support and risk checks Negotiation and purchase management End-to-end coordination through to settlement Why this matters (for buyers) If you’re buying interstate — especially for a premium home or investment — you need more due diligence than listings and opinions. You need an advocate who: works exclusively for buyers, can assess property with discipline, and will do the hard yards when the purchase demands it. If you’re looking for an experienced buyers agent or buyers advocate to purchase a property in Alice Springs (or anywhere interstate), talk to Concierge Buyers Advocates. We’ll quickly tell you what’s realistic, what’s risky, and whether we’re the right fit — no fluff.

Buying your first home is a thrilling milestone, but let’s be honest - it can also feel like navigating a maze. The good news? The First Home Guarantee benefits are designed to make that journey smoother and more affordable. If you’ve been wondering how to get a leg up in the property market, you’re in the right place. I’m here to walk you through how the first home guarantee scheme works, who qualifies, and how you can make the most of it. What Are the First Home Guarantee Benefits? So, what exactly are these benefits, and why should you care? The First Home Guarantee is a government initiative aimed at helping first-time buyers get into the property market with a smaller deposit. Traditionally, lenders want you to put down at least 20% of the property price to avoid paying lenders mortgage insurance (LMI). That’s a hefty chunk of change for many. Here’s the kicker: with the First Home Guarantee, you can secure a home loan with as little as 5% deposit without having to pay LMI. That’s a game-changer. It means you can buy your dream home sooner, with less upfront cash, and keep more money in your pocket for moving costs, renovations, or even a celebratory dinner. How Does It Work? The government guarantees up to 15% of the property price. You only need to provide a 5% deposit. The guarantee applies to new or existing homes, including off-the-plan properties. There’s a cap on the property price depending on the location. Imagine you’re eyeing a $600,000 home in Melbourne. Normally, you’d need $120,000 for a 20% deposit. With the First Home Guarantee, you only need $30,000 upfront, and the government backs the rest of the deposit gap. Pretty neat, right? Who is Eligible for the First Home Grant in Australia? Eligibility is a key piece of the puzzle. Not everyone can jump on this bandwagon, but if you tick the right boxes, you’re in luck. Here’s who can apply: Australian citizens aged 18 or over. Sorry, permanent residents and visa holders don’t qualify. You must be a first home buyer - meaning you haven’t owned or had an interest in a residential property in Australia before. Your household income must be below the set threshold. For singles, it’s $125,000 per year; for couples, $200,000 combined. The property you’re buying must be your principal place of residence. The property price must be within the regional caps. For example, in Melbourne, the cap is around $700,000 (this can vary, so always check the latest figures). If you’re planning to buy with a partner, both of you need to meet the criteria. Also, you can only use the guarantee once, so it’s a one-time opportunity. How to Apply and What to Expect Applying for the First Home Guarantee is straightforward but requires some preparation. Here’s a step-by-step guide to get you started: Check your eligibility. Use the official government website or speak to a mortgage broker. Find a lender who participates in the scheme. Not all lenders offer loans under this guarantee, so do your homework. Get pre-approval for your home loan. This helps you understand your borrowing capacity. Submit your application for the guarantee through your lender. They’ll handle the paperwork with the government. Once approved, proceed with your property purchase. Keep in mind, the scheme has limited places each financial year, so timing is crucial. Don’t wait until you find the perfect home to start the process. Tips for a Smooth Application Gather your documents early: proof of income, ID, and any other paperwork your lender requests. Work with a trusted mortgage broker or buyer’s advocate who knows the ins and outs of the scheme. Stay within your budget and property price caps to avoid surprises. What Are the Limitations and Things to Watch Out For? While the First Home Guarantee is fantastic, it’s not without its quirks. Here are some things to keep in mind: Limited spots: The government only offers a set number of guarantees each year. If you miss out, you’ll have to wait until the next round. Property price caps: These vary by region and can limit your options, especially in hot markets like Melbourne. Not for investment properties: The scheme is strictly for owner-occupiers. You still need to cover other costs: Stamp duty, legal fees, inspections, and moving expenses aren’t covered. Loan conditions: You must meet your lender’s criteria, which can include credit checks and serviceability assessments. Understanding these limitations helps you plan better and avoid disappointment. Making the Most of the First Home Guarantee Benefits Now that you know how the scheme works, how can you leverage it to your advantage? Here are some practical tips: Start saving early: Even with a 5% deposit, you’ll need funds for other upfront costs. Get professional advice: A buyer’s advocate or mortgage broker can help you navigate the market and the application process. Research property prices: Stay within the caps and look for areas with growth potential. Consider new builds: Sometimes, new homes qualify better under the scheme and may come with additional incentives. Plan for the long term: Think about your future needs and how the property fits into your lifestyle and investment goals. Remember, this scheme is a stepping stone. It’s about getting your foot in the door and setting yourself up for success. If you’re ready to take the plunge, the first home guarantee scheme could be the key to unlocking your dream home sooner than you think. With the right preparation and guidance, you’ll be turning the key to your new front door before you know it. Happy house hunting!

Established or New Build? The $900k Melbourne Investor Question One of the biggest questions Melbourne property investors are asking right now is simple: “Should I buy an established property or a brand-new build?” It used to be a simple question, until the Budget 2026 announcement. It is now no longer a simple question. You almost need an accounting degree and a crystal ball to answer that. After the 2026 Federal Budget changes, where negative gearing benefits are being reshaped to favour new residential properties. The Government’s Budget explainer states that negative gearing benefits are being limited to new residential properties, while losses on established residential properties purchased after the relevant cut-off may no longer be immediately offset against salary and wage income. That sounds like a win for new builds. But property investing is not just about tax. It is about rent, land value, tenant demand, holding cost, resale depth, scarcity, depreciation, maintenance risk and long-term capital growth. Tax benefits can help you hold the property. They do not automatically make it a good property. Let’s look at the numbers. The Scenario: $900k Purchase, $130k Income For this comparison, let’s use a realistic Melbourne investor profile. Assumptions Assumption Figure Investor income $130,000 p.a. Purchase price $900,000 Loan $720,000 Loan-to-value ratio 80% Interest rate 6.25% interest-only Inner-metro established rent $700 per week Outer-ring new build rent $600 per week For someone earning $130,000, the investor generally sits around the 30% marginal tax bracket, before Medicare levy, under current Australian resident tax rates. For simplicity, we will use an approximate 32% tax benefit, allowing for Medicare levy. Disclaimer: This is not tax advice. It is a practical investment modelling exercise. Option 1: $900k Established Inner-Metro Property Let’s say the investor buys an established townhouse, villa unit or modest house in an inner or middle-ring Melbourne suburb. It costs $900,000 and rents for $700 per week. Annual Rental Income Item Amount Rent: $700 x 52 weeks $36,400 Estimated Annual Holding Costs Item Estimate Interest on $720,000 at 6.25% $45,000 Property management, approx. 7.7% incl. GST $2,803 Council, water, insurance $4,500 Maintenance allowance $2,500 Land tax estimate $2,050 Total annual cost $56,853 Victoria land tax is based on the taxable value of landholdings, not the total purchase price of the property. Investment properties are generally assessable unless an exemption applies. Established Property Cash Flow Item Amount Rental income $36,400 Less holding costs -$56,853 Pre-tax cash shortfall -$20,453 p.a. Weekly shortfall -$393 per week Under the new policy direction, if this is an established residential investment property purchased after the relevant cut-off, the investor may not be able to immediately offset that rental loss against salary income. Industry summaries of the Budget measures describe this as established-property rental losses being quarantined rather than freely offset against wage income. So the investor may need to carry the full cash shortfall. That is roughly: $20,453 per year out of pocket About $393 per week Not catastrophic. But not loose change either. Option 2: $900k Brand-New Outer-Ring Property Now let’s say the investor buys a brand-new house-and-land package or new townhouse in an outer-ring Melbourne suburb. Same purchase price: $900,000. But the rent is lower: $600 per week. (optimistically) This is common. A brand-new property can look attractive on tax, but the location may not command the same rent as a stronger inner or middle-ring suburb. Annual Rental Income Item Amount Rent: $600 x 52 weeks $31,200 Estimated Annual Holding Costs Item Estimate Interest on $720,000 at 6.25% $45,000 Property management, approx. 7.7% incl. GST $2,402 Council, water, insurance $4,500 Maintenance allowance $1,000 Land tax estimate $1,475 Total annual cost $54,377 New Build Cash Flow Before Tax Item Amount Rental income $31,200 Less holding costs -$54,377 Pre-tax cash shortfall -$23,177 p.a. Weekly shortfall -$446 per week Before tax, the new build is actually worse. Why? Because it rents for $100 per week less. That is $5,200 less rent per year. The slightly lower maintenance and land tax estimate does not fully offset the weaker rental income. So before tax, the new build is approximately: $2,724 per year worse than the established property This is where the conversation gets interesting. Tax Changes the Story The major advantage of the new build is that it may still qualify for negative gearing. The 2026 Budget reform package is centred on limiting negative gearing for residential property to new builds, while changing capital gains tax treatment more broadly. That means the new build may still allow the investor to offset rental losses against salary income, subject to the final rules and personal circumstances. Scenario A: New Build Without Depreciation Item Amount Cash loss -$23,177 Approx. tax benefit at 32% +$7,417 After-tax cash shortfall -$15,760 p.a. Weekly after-tax shortfall -$303 per week Compared with the established property, the new build could be around: $4,693 per year better in after-tax cash flow About $90 per week better This can be significant for an investor earning $130,000. Scenario B: New Build With Depreciation Brand-new properties may also provide depreciation benefits. Let’s use a simple example of $10,000 per year in depreciation. Depreciation is not a cash expense. You do not physically pay it each year. But it may increase the taxable loss, which may improve the investor’s tax position. Item Amount Cash loss -$23,177 Depreciation allowance -$10,000 Taxable loss -$33,177 Approx. tax benefit at 32% +$10,616 After-tax cash shortfall -$12,561 p.a. Weekly after-tax shortfall -$242 per week Now the new build looks much better from a holding-cost perspective. Compared with the established property, the new build may be around: $7,892 per year better in after-tax cash flow About $152 per week better This is the number many project marketers and property spruikers will focus on. To be fair, they are not completely wrong. The new build may genuinely be easier to hold. But that does not automatically mean it is the better investment. What About the Resale Value? This is where most investors do not think deeply enough — and it is almost never properly factored into the purchase decision. The picture becomes even murkier when you start considering the future resale value of the property. Under the old system, many investors did not need to worry too much about whether a property was established or brand new from a resale perspective. Or at least, the difference was not as significant when comparing similar property types. An investor buying an established property and an investor buying a new build could often access similar tax treatment, so the resale gap was less obvious. Under the new Budget 2026 changes, buying a new property is a bit like buying a new car. The new property can only be new once. The tax benefit attached to a new property may disappear the moment it is resold. Once the first owner sells it, the property becomes just another established property in the eyes of the next buyer. At that point, future buyers will compare it against other established properties in the market. And when that happens, the property with the stronger fundamentals will win. That means location, land value, scarcity, build quality, rental demand, owner-occupier appeal, school zones, transport, amenities and resale depth become critical. The property with better fundamentals is more attractive, and thus tends to fetch better resale price. In simple terms: A new build may win on tax when you buy it. But the better property wins when you sell it. The Real Question: Cash Flow or Capital Growth? Here is where investors need to have a goal. What do you want from the property? How does the property fit into your portfolio and goals? The new build may save the investor roughly $5,000 to $8,000 per year in after-tax cash flow. But what happens if the established inner-metro property grows faster (which it usually is)? On a $900,000 property, a small difference in annual capital growth can completely wipe out the new build’s cash-flow advantage. Extra capital growth from established property Dollar difference 1% p.a. stronger growth $9,000 per year 2% p.a. stronger growth $18,000 per year 3% p.a. stronger growth $27,000 per year This is the part investors often miss. A new build might save you $7,000 a year in tax-adjusted holding cost. But if it underperforms by 1% per year in capital growth, the established property may still come out ahead. And in Melbourne, a 1% growth gap between a scarce, well-located established property and an outer-ring new build is not hard to imagine. It is available from data sources. In fact, it is often the difference between buying a real asset and buying a glossy brochure with a floor plan. In Summary: Established vs New Builds in Melbourne Category Established Inner-Metro Property Brand-New Outer-Ring Property Purchase price $900,000 $900,000 Investor income $130,000 p.a. $130,000 p.a. Loan amount $720,000 $720,000 Interest rate assumption 6.25% interest-only 6.25% interest-only Weekly rent $700 $600 Annual rent $36,400 $31,200 Annual interest cost $45,000 $45,000 Pre-tax cash shortfall -$20,453 -$23,177 Negative gearing benefit Limited/quarantined under new rules Likely available Depreciation benefit Lower Higher After-tax shortfall, no depreciation -$20,453 -$15,760 After-tax shortfall, with depreciation Not modelled -$12,561 Cash-flow winner New build Likely capital-growth winner Established 10 Year Scenario This is where things can get exciting. Give, most property owners hold on to a property for about 10 years, let's look at what happen in 10 years: 10-Year Wealth Impact Example Let’s assume the new build saves the investor around $7,000 per year in after-tax cash flow. That gives the new build a $70,000 cash-flow advantage over 10 years. But if the established property grows faster, the story changes. Growth Difference in Favour of Established Extra Capital Growth Over 10 Years New Build Cash-Flow Advantage Net Position 0.5% p.a. better Approx. $45,000 $70,000 New build ahead by $25,000 1.0% p.a. better Approx. $90,000 $70,000 Established ahead by $20,000 1.5% p.a. better Approx. $135,000 $70,000 Established ahead by $65,000 2.0% p.a. better Approx. $180,000 $70,000 Established ahead by $110,000 This table is deliberately simple. It does not compound growth, and it does not include selling costs, tax on sale or loan principal changes. But it makes the point clearly. If the established property grows only 1% per year faster, it may overtake the new build’s tax and cash-flow advantage over a long-term hold. Why Established Properties Can Still Win Established properties can still be excellent investments when they have the right fundamentals. The key advantages are: 1. Better land component In Melbourne, long-term growth is often driven by land value. A well-located established townhouse, villa unit or house may have a stronger land-to-asset ratio than a brand-new apartment or outer-ring townhouse. Investors should always remember: Land appreciates. Buildings depreciate. 2. Stronger tenant demand The example shows this clearly. The established inner-metro property rents for $700 per week. The brand-new outer-ring property rents for $600 per week (and it is a very optimistic estimate). Not many outer ring tenants can afford to lease a $900k house. That $100 weekly gap tells us something important: location still matters. Tenants pay for access, convenience, schools, transport, jobs, lifestyle and amenity. They do not just pay for stone benchtops. Inner ring properties have them all. Outer ring properties are usually in the early stages of development, thus, the lesser amenities. 3. Better resale depth Established inner and middle-ring locations often have deeper resale demand. You are not only selling to investors. You may be selling to: first home buyers young families downsizers professionals school-zone buyers owner-occupiers wanting location That owner-occupier demand can support prices during softer markets. Outer-ring new builds often compete with other new builds. When you sell a five-year-old property, your competition may be a brand-new version nearby with better incentives. That is not a fun auction room. 4. Less developer premium Many new builds are sold with the tax benefit baked into the price. In plain English, the developer may already have captured part (if not all) of your future tax advantage in the purchase price. The marketing spew says “tax saving”. The contract price says “thank you very much”. Why New Builds Can Still Make Sense To be clear, this is not an anti-new-build argument. New builds can make sense. But they must be qualified and bought carefully. A new build may be suitable if: the investor needs better after-tax cash flow serviceability is tight depreciation benefits are meaningful the property is genuinely scarce the suburb has strong population, income and infrastructure drivers the land component is reasonable the build quality is strong the price is not inflated by developer margin the resale market is not flooded with similar stock A new build should not be bought just because it is new. It should be bought because it is a good investment that happens to be new. It is a Big difference. Side-by-Side Summary Item Established Inner Metro New Build Outer Ring Purchase price $900,000 $900,000 Rent $700/week $600/week Annual rent $36,400 $31,200 Pre-tax cash shortfall -$20,453 -$23,177 Negative gearing benefit Likely limited/quarantined under new rules Likely available Depreciation Lower Higher After-tax shortfall, no depreciation Around -$20,453 Around -$15,760 After-tax shortfall, with depreciation Not modelled Around -$12,561 Cash-flow winner New build Likely land/scarcity winner Established Likely long-term growth winner Depends on asset quality, but often established Our Melbourne Buyer’s Advocate View For a $130,000 income earner buying a $900,000 Melbourne investment property, the new build may be easier to hold after tax. While this may be the honest answer, the established property is still usually the better long-term asset, if you can afford the holding costs. Established properties in good locations, tends to: appreciate faster attract better rent higher rental growth attract better tenants The key question is this: Will the established inner-metro property outperform the new outer-ring new build by more than roughly 1% per year? If the answer is yes, then the established property may still be the better investment, even with weaker tax treatment. If the answer is no, or if the investor cannot handle the holding cost, then a carefully selected new build may make more sense. This is why investors should not blindly follow tax policy. Tax policy changes. Property fundamentals remain. My Practical Recommendation For a $900,000 Melbourne investment budget, I would generally rank the options this way: 1. Quality established townhouse, villa unit or house in a proven suburb This is still my preferred option where the investor can handle the cash flow. Look for land value, scarcity, owner-occupier demand, transport, schools, low supply and strong resale depth. 2. Quality new or near-new townhouse in a strong middle-ring suburb This can work if the price is fair and the location is not compromised. The problem is not “new”. The problem is overpriced, mass-produced, investor-targeted stock. 3. Outer-ring new build only if the numbers and fundamentals genuinely stack up Do not buy it just because the tax treatment is better. The property still needs to perform without the tax sugar hit. 4. Most new apartments and generic house-and-land packages Be very careful. Many look good in a depreciation schedule and ordinary in the real market. Final Verdict For this example: Established inner metro at $700/week gives better rent and likely stronger land-value fundamentals. New outer-ring at $600/week gives better after-tax cash flow, especially if depreciation is available. The new build may save around $5,000 to $8,000 per year in after-tax holding cost. But the established property only needs to outperform by about 1% per year in capital growth to potentially offset that benefit, and this is 1% target is very achieveable. Typical capital growth in Melbourne hovers between 4-10%, depending on location and property. So the answer is not simply: “Buy new because negative gearing.” That is lazy advice. The better answer is: Buy the better asset. Then model the tax, with your income tax bracket. For investors who can handle the holding cost, a quality established Melbourne property is usually still the stronger long-term play. For investors with tighter serviceability or cash flow, a carefully selected new build can make sense — but only if the property is genuinely good, not just tax-friendly. Because in property investing, the tax benefit might help you survive the hold. But the asset quality determines whether the investment was worth holding in the first place. Decision Matrix Should you buy an Established or New Property? Investor Priority Better Fit Why Lowest holding cost New build Negative gearing and depreciation may improve after-tax cash flow Stronger rent Established In this example, the established property rents for $100/week more Better land value Established Usually stronger land component in established areas Lower maintenance New build Newer property should have fewer short-term repairs Better tax benefits New build More favourable under the proposed negative gearing changes Better long-term scarcity Established Established inner/middle-ring locations often have deeper demand Easier tenant appeal Depends New build has modern finishes; established may have better location Better resale depth Established More likely to attract owner-occupiers, not just investors Lower risk of developer premium Established New builds can include pricing premiums and marketing margins Best for tight serviceability New build Better after-tax cash flow may help the investor hold the asset FAQ Established vs New Builds Is an established property still worth buying after the negative gearing changes? Yes, it can be. Established properties may have weaker tax treatment under the proposed rules, but they can still offer better land value, rent, scarcity and capital growth potential. The key is whether the property can outperform the new-build alternative enough to justify the extra holding cost. Are new builds better for investors now? New builds may be better from a tax and cash-flow perspective, especially if negative gearing and depreciation benefits are available. But that does not automatically make them better investments. A poor-quality new build in a weak location can still underperform badly. What matters more: tax savings or capital growth? For long-term investors, capital growth usually matters more. A tax saving of $5,000 to $8,000 per year can be useful, but a 1% difference in capital growth on a $900,000 property is worth $9,000 per year. Should I buy a new apartment for depreciation? Usually, be careful. Depreciation can improve cash flow, but apartments often have lower land content, higher owners corporation costs, and more resale competition. Depreciation should be a bonus, not the main reason to buy. What is the best $900k investment property in Melbourne? There is no single answer, but a quality established townhouse, villa unit or modest house in a strong suburb is often a better long-term investment than a generic new build in an oversupplied outer-ring estate. The right property depends on cash flow, borrowing capacity, location, land value and the investor’s goals.

The Real Comparison Between Victoria, Queensland and WA Investors love asking: “Should I buy in Melbourne, Queensland or Western Australia?” It is a Fair question. But the wrong answer is usually the loudest one. Some people will say, “Perth is booming, buy Perth.” Others will say, “Brisbane has the Olympics, buy Brisbane.” Melbourne loyalists will say, “Melbourne is undervalued, buy Melbourne.” The truth is more useful than the hype: Melbourne is the value-and-recovery market. Queensland is the balanced growth-and-lifestyle market. Western Australia is the momentum-and-yield market. Each can work. Each can burn you. The winner depends on your strategy, tax position, borrowing power, risk tolerance and the specific property you buy. In 2026, with higher interest rates, new tax changes and a softer national outlook, investors need to stop buying headlines and start buying fundamentals. The 2026 Investment Landscape Has Changed The biggest mistake investors can make now is using old rules for a new market. The RBA cash rate was lifted to 4.35% in May 2026, after increases in February and March. That has reduced borrowing capacity, pushed repayment pressure higher and made investors more sensitive to cash flow. On top of that, the 2026 Federal Budget introduced major tax reforms. Negative gearing will be limited to new builds from 1 July 2027, while rental losses on established residential investment properties bought after 7:30pm AEST on 12 May 2026 will generally be quarantined rather than offset against wages or salary. The CGT reforms will apply to gains accruing after 1 July 2027. That changes the investor equation. Previously, some investors could tolerate poor cash flow because negative gearing softened the pain. Now, especially for established property bought after Budget night, investors need to ask a much harder question: Does this property work under the new negative gearing and CGT treatment? That one question changes how Melbourne, Queensland and WA should be compared. Melbourne: The Value and Recovery Play. Melbourne has been the underperformer. Compared with Brisbane, Perth and Adelaide, Melbourne’s price growth has been weak over recent years. For many investors, Victoria has felt too hard: higher land tax, weaker sentiment, slower capital growth and more political risk. However, the good news is that weak sentiment can create opportunity. Melbourne remains one of Australia’s deepest property markets. Melbourne is the most populous capital city in Australia. Plus, major employment hubs, global universities, medical precincts, established transport networks, strong migration appeal and broad owner-occupier demand. It is not a one-industry town. It has economic breadth and depth. But Melbourne is not a “buy anything” market. Cotality’s April 2026 Home Value Index showed softer conditions in Melbourne, with values retreating, softer auction clearance rates and more advertised supply giving buyers more choice. That means buyers have more room to negotiate, but also more room to make mistakes. The opportunity in Melbourne is not in generic investor stock. It is in quality assets that nervous vendors may now be willing to sell at fair value. And these are: established family homes on good land, scarce villas or townhouses in tightly held suburbs, properties near strong schools, transport and employment, middle-ring suburbs with genuine owner-occupier depth, locations where supply is limited and long-term demand is proven. Melbourne suits investors who are patient, analytical and willing to buy against sentiment. If you are an investor after a quick punt, stay away. Possibility of you getting burnt is high. It is not the market for people who need instant gratification. If you want fireworks in the next six months, Melbourne may feel like watching paint dry in winter. But for investors who care about long-term asset quality, Melbourne is still very much alive. Queensland: The Balanced Growth and Lifestyle Market Queensland has had a powerful run. Brisbane and South East Queensland benefited from interstate migration, lifestyle demand, relative affordability, tight rental markets and improving economic confidence. Compared with Melbourne, Queensland has offered stronger recent growth and generally better rental yields. KPMG’s 2026 Residential Property Market Outlook expected Brisbane house prices to grow strongly in 2026, with Brisbane forecast at around double-digit growth in that earlier outlook. But investors need to be careful. The easy money in many Queensland markets has already been made. Buying after a strong run is not necessarily wrong, but it requires discipline. You need to know whether you are buying future growth or paying for yesterday’s growth. Queensland also has very location-specific risks. Flood risk matters. Insurance matters. Building quality matters. Local supply matters. Some outer corridors and townhouse-heavy pockets can look affordable but have weaker scarcity. Some coastal markets are lifestyle-driven and can become volatile if affordability gets stretched. Queensland’s strength is that it offers a cleaner balance than Melbourne for many investors: better rental yield, strong population growth, good lifestyle appeal, less land tax pain than Victoria for many individual investors, and broad demand from both renters and owner-occupiers. But do not confuse “Queensland is strong” with “every Queensland property is good”. That is how investors buy a flood-prone, investor-heavy townhouse and then call it a “growth asset” because someone mentioned the Olympics. Western Australia: The Momentum and Yield Market WA, especially Perth, has been the strongest momentum story. Perth has offered strong rental pressure, lower vacancy, better affordability compared with the east coast, and stronger yields. KPMG’s January 2026 outlook forecast Perth house prices to rise by almost 13% over 2026, the strongest among capital cities in that report. From a cash-flow perspective, WA has been hard to ignore. For investors hit by higher rates and tax changes, stronger yield matters. If negative gearing benefits are being reduced for established properties, investors naturally become more interested in markets where the property can carry itself better. This is where Perth has an advantage over Melbourne. But WA has its own risk. Perth has a history of sharper property cycles. It can run hard, then go sideways for long periods. The WA economy has more exposure to resources, mining sentiment and commodity cycles than Melbourne or Brisbane. That does not make Perth bad. It means the entry point matters. Investors buying WA now need to be careful not to buy late in the cycle simply because the recent numbers look good. A market can be strong and still be dangerous if you overpay. Good WA investing requires: strong local knowledge, careful suburb selection, avoidance of inferior stock, understanding of employment drivers, and a realistic view of whether current rent growth is sustainable. WA is attractive for yield and momentum. But momentum is not a moat. What about the Broader Regional Victorian Market? The regional Victorian market is an interesting one. Regional Victorian market had been very resilient in recent year, despite the perceived gloom in Melbourne and higher land tax. Major regional cities had been experiencing consistent growth of between 15-25 annually. Yes, we've been saying, Melbourne is good, but regional Victoria can be better for you. Rental Market Comparison Rental tightness is one of the biggest reasons Queensland and WA have attracted investor attention. SQM Research reported Australia’s national vacancy rate rose to 1.2% in April 2026, still very tight by historical standards, with national asking rents up 7.3% over the year. Cotality also noted that every capital city was recording a vacancy rate below 2%, with Perth among the tightest markets in March 2026. In simple terms: WA generally wins on yield. Queensland usually offers better yield than Melbourne. Melbourne often has weaker cash flow but stronger long-term depth in selected quality locations. Regional Victoria usually offers better yield than Melbourne. This is where strategy matters. If an investor needs stronger holding income, Melbourne can be hard work. Land tax, rates, insurance, maintenance and interest costs can eat into returns quickly. Hwoever, if an investor has strong income, long-term patience and wants quality land in a deeper market, Melbourne may still be attractive. Different investor, different outcome. Tax and Holding Cost Comparison This is where Victoria takes a beating. Victoria’s property taxes have made investors nervous. Land tax has become a major complaint, especially for investors holding multiple properties or properties with higher land value. Queensland and WA are not tax-free paradises, but for many investors they feel more manageable than Victoria. This has pushed some investor demand away from Melbourne and into Brisbane, Perth and regional markets. However, there is a contrarian angle. When investors abandon a market, prices can soften. When prices soften, disciplined buyers can negotiate. When everyone hates a market, that market can start producing value. That does not mean investors should blindly buy Victoria. It means the best opportunities often appear when sentiment is poor. Melbourne’s tax pain is real. But so is its long-term potential. The smart investor should consider both. Capital Growth Outlook: Who Wins? At the start of 2026, many forecasts were still positive. KPMG expected national house values to rise 7.7% and national unit values to rise 7.1% in 2026, supported by tight supply and strong rental dynamics. But with the recent Budget 2026 taxation changes, it has become more cautious. ANZ expects capital city prices to grow only 2.8% in 2026 and 2.1% in 2027, with Sydney and Melbourne expected to underperform in 2026 and Brisbane, Perth and Adelaide likely to lose momentum in 2027 after strong previous growth. The Budget 2026 also tried to shift investor demands to a certain market segment. That tells us something important: The market is shifting from broad growth to selective growth. WA may still lead on momentum. Queensland may still offer the best balance. Melbourne may be the contrarian value play. But as with any investments, none of these markets should be bought blindly. A good property in a weaker market can outperform a bad property in a stronger market. Investors forget that because charts are easier to read than streets. So Which Market Is Best? Ranking isn't straightforward. But if you must have it, here is the honest ranking. Best short-term momentum: Western Australia WA, especially Perth, has the strongest current momentum and better rental yields. It suits investors who want cash-flow support and are comfortable with a more cyclical market. Best balanced market: Queensland Queensland offers a good mix of population growth, rental demand and lifestyle appeal. It suits investors who want a balance between yield and growth, but suburb selection is critical. Best contrarian value: Melbourne Melbourne is softer, more negotiable and unloved by many investors. That can create opportunity for buyers who are focused on long-term asset quality rather than short-term hype. Best long-term depth: Melbourne Melbourne’s economy, population base, education sector, employment diversity and owner-occupier depth remain powerful. The challenge is buying the right asset at the right price. Best cash flow: WA Perth generally offers stronger yields than Melbourne and many parts of Queensland. Highest policy and holding-cost pain: Victoria Victoria’s land tax and investor sentiment remain major issues. Investors must factor this in properly. What Our Buyers Advocates Would Tell Investors If you are a cash-flow-focused investor, look seriously at WA, but do not chase the market blindly. Perth is hot, and hot markets attract lazy money. Lazy money usually buys the wrong stock. If you want a balanced growth-and-yield market, Queensland is very compelling, especially where flood risk, insurance cost, infrastructure, employment and supply are properly assessed. If you want long-term asset quality and are prepared to be patient, Melbourne should not be written off. In fact, Melbourne’s weakness may be exactly where the opportunity sits. But Melbourne must be bought with a sniper mindset. You do not buy “Melbourne”. You buy a specific property, on a specific street, with a specific tenant profile, school zoning, transport access, land component, planning risk, rental competition and resale market. That is where most investors go wrong. They buy a city story. Professionals buy an asset. Final Verdict: Melbourne vs QLD vs WA There is no single winner. It depends on your risk appetite and goals: WA is strongest for momentum and yield. Queensland is strongest for balance. Melbourne is strongest for contrarian value and long-term depth. But if I had to summarise it in one sentence: WA is where the numbers look best today, Queensland is where the story looks most balanced, and Melbourne is where the patient investor may find the best mispriced opportunities. The key is not choosing the hottest state. The key is choosing the right property before the market fully understands its value. That is how good investors win. Savvy investors do not follow noise. They do not chase headlines. They do not buy whatever a spruiker is pushing this month. In fact, if you must know what not to buy, look at what spruikers are pushing. There is obviously a reason why spruikers are pushing so hard. Good properties in good locations market themselves. Smart investors win by doing the work others are too lazy to do. Very Sun Tzu: do not fight where the crowd is charging — position yourself where the advantage is quietly forming. FAQ Is Melbourne a good place to invest in property in 2026? Melbourne can still be a good long-term investment market, especially for buyers targeting quality assets in established suburbs with strong owner-occupier appeal, transport, schools and employment access. However, investors need to be selective because Victoria has higher holding costs and weaker short-term momentum compared with some interstate markets. Is Queensland better than Melbourne for property investment? Queensland may offer stronger short-term momentum and better rental yields than Melbourne in some areas, particularly in Brisbane and South East Queensland. However, investors must carefully assess flood risk, insurance costs, local supply and whether recent price growth has already been priced in. Is Western Australia better for rental yield? Western Australia, especially Perth, has generally offered stronger rental yields and tighter vacancy conditions than Melbourne. However, WA can be more cyclical because the economy has greater exposure to mining and resources. Which state is best for property investment in 2026? There is no single best state for every investor. WA may suit cash-flow-focused investors, Queensland may suit investors seeking a balance between growth and yield, and Melbourne may suit patient investors looking for long-term value and mispriced opportunities. How do the 2026 tax changes affect property investors? The 2026 tax changes make asset selection more important. Investors can no longer rely as heavily on negative gearing and CGT benefits to compensate for poor cash flow or weak capital growth. Properties need to work on their own fundamentals

Why Melbourne Investors Need to Think Differently After the 2026 Budget Melbourne has been called the “recovery market” for years. And to be fair, there is some truth behind that view. Compared with Sydney, Brisbane, Perth and Adelaide, Melbourne has looked relatively cheap. It has lagged. It has underperformed. It has frustrated investors who expected Australia’s second-largest city to bounce harder after COVID. IT actually did, until the series of COVID debt recovery taxes slammed the brake. For years now, buyers can afford to be rather picky when buying in Melbourne. But not all properties are good. Cheap does not automatically mean good value. And expensive does not automatically mean bad value either. A property can be cheap because it is overlooked. It can also be cheap because the market has correctly identified its flaws and buyers are staying away. In 2026 and beyond, Melbourne is not a market where investors can afford to be lazy. The old formula of “buy anything, negatively gear it, hold forever and let tax benefits soften the pain” is being weakened. The Federal Budget has changed the rules of the game, especially for investors buying established property after Budget night. 7.30pm 12 May 2026. The line has been drawn. From 1 July 2027, negative gearing will be limited to new builds, while losses from established residential properties will generally only be offset against rental income or future residential property gains, with excess losses carried forward. Existing arrangements are grandfathered for properties already held before Budget night. IE, those properties that you already own before 7.30pm 12 May 2026, will still enjoy the old negative gearing rule. That means investors now need to ask a harder question: Does this property work on its own merits, or did it only look good because the tax system helped hide the weakness? That is the new Melbourne property investment test. Melbourne’s Recovery Story: There Is Truth in It Melbourne’s investment case has not disappeared. Ignoring the hype and speculations, the fundamentals in the Melbourne property market is one of the strongest in Australia. Melbourne remains one of Australia’s largest employment, education, migration and lifestyle markets. It has deep demand from owner-occupiers, students, professionals, migrants, medical workers, families and long-term renters. It also has a genuine relative-value argument. While the often-hyped Brisbane, Perth and Adelaide markets have had strong runs, Melbourne has lagged. Some quality Melbourne suburbs are trading at prices that would have looked unusual compared with Sydney or Brisbane just a few years ago. This matters because property markets often move in cycles. The cities that run hardest eventually face affordability limits. The cities that lag can become attractive again when buyers start comparing value. But — and this is a big but — Melbourne is not one market. There is no such thing as “the Melbourne property market” in any useful investment sense. There are hundreds of micro-markets. Some had quietly improved. Some are flat. While many are overloaded with investor stock. Some have excellent long-term fundamentals but poor short-term sentiment. Some look affordable because they are sitting in supply-heavy corridors where land is not scarce, and vacancies are high. Treating all of Melbourne as a recovery play is like saying every restaurant in Lygon Street serves good pasta. Brave statement, dangerous dinner. What the Latest Data Is Really Saying The latest market signals are mixed. The Reserve Bank increased the cash rate to 4.35% in May 2026, after earlier increases this year, which has put renewed pressure on borrowing capacity and buyer confidence. Cotality’s April 2026 Home Value Index showed that Sydney and Melbourne had softened, with Melbourne values retreating and advertised supply increasing. Cotality noted that softer values were occurring alongside falling auction clearance rates and rising stock, giving buyers more choice and less urgency at the negotiation table. ANZ has also warned that Sydney and Melbourne are likely to underperform in 2026 because they are more sensitive to interest rates, with capital city price growth forecast to slow sharply. So, is Melbourne recovering? My honest answer: Yes. But only in certain pockets, not broadly enough to justify blind optimism. There are pockets where buyers are getting better value. There are vendors becoming more realistic. There are quality family homes, older houses on good land, well-located villas, and scarce assets that are worth watching closely. But the broader market is still dealing with: higher interest rates, weaker investor sentiment, tax policy uncertainty, rising supply in some areas, lower auction clearance, and tighter lending conditions. To most people, these suggests Melbourne is a minefield. But disciplined investors and buyers sees opportunities. The 2026 Tax Changes: What Investors Need to Know The biggest change for property investors in Melbourne and Australia is the reform of negative gearing and capital gains tax. Under the 2026 Federal Budget reforms, negative gearing for residential property will be limited to new builds from 1 July 2027. Existing arrangements remain unchanged for properties held before Budget night, and investors buying new builds can still deduct losses against other income. For established residential properties acquired after the relevant Budget night timing, the treatment changes. Losses from established residential property will generally no longer be used to reduce salary, wages or other non-property income. Instead, those losses will be quarantined and may be used against rental income or future residential property gains. The capital gains tax discount is also changing. The Government’s Budget material says the 50% CGT discount will be replaced with cost-base indexation and a 30% minimum tax rate framework, with reforms applying to gains accruing after 1 July 2027. In plain English: tax benefits are becoming less generous for established property investors. This does not mean property investment is dead. It means lazy property investment is dead. A strong property still works because of land value, scarcity, location, rental demand, household income, school zones, infrastructure, transport and long-term desirability. A weak property previously survived because tax benefits helped investors tolerate poor cash flow and average growth. That safety net is being cut back, with negative gearing incentives only remaining intact only for the weakest market. Established Property vs New Builds: The New Investor Dilemma The Government wants to push investors towards new housing supply. That is why new builds receive more favourable negative gearing treatment under the proposed rules. On paper, that sounds simple: buy new, keep tax benefits. In practice, investors need to be careful. Whenever lazy investors see incentives, they see opportunities. But the cautious investors sees red flags. New builds can be useful when the numbers stack up. They can offer depreciation benefits, lower maintenance, stronger tenant appeal and better energy efficiency. But they can also be overpriced, poorly located, supply-heavy, badly built, or sold with too much developer margin and government fees baked in. A brand-new house in an oversupplied estate is not automatically a good investment just because the tax treatment is better. Likewise, an established house on is not automatically a bad investment just because the tax treatment is less generous. Each property needs to be separately evaluated. The correct question is no longer: “Can I negatively gear it?” The correct question is: “Would I still buy this property if there were no tax benefits?” If the answer is no, it probably is not worth investing in. You have a tax-deductible headache. What This Means for Melbourne Investors Melbourne investors now need to become more numbers-focused. For years, too many investors bought mediocre properties because the old tax treatment softened the pain. Negative gearing made the holding loss feel more manageable. The CGT discount made the exit look more attractive. That encouraged some investors to accept poor yield, poor land value, poor location and poor asset selection. The new environment is less forgiving. A good Melbourne investment in 2026 and 2027 needs to pass several tests: It should have genuine tenant demand. It should have owner-occupier appeal. It should not rely solely on tax deductions. It should have scarcity. It should not be surrounded by endless competing supply. It should have access to jobs, schools, transport, shops and lifestyle amenities. It should not be compromised by main roads, powerlines, flood risk, poor zoning, bad body corporate structures or awkward floor plans. In other words, investors need to buy like professionals, not hopeful amateurs, relying on social media hype, mate-have-one-and-I-want-one-too mentality. And yes, that sounds obvious. But in property, “obvious” is often where the money is made — because proper due diligence is tedious and most people take the easy way out. Melbourne Suburbs: Where the Opportunity May Sit I would not write a lazy list of “top 10 suburbs to buy in Melbourne” and pretend every property in those suburbs is a winner. Things change quickly in the property market, and that is how people get burnt. One recent sale in the area can flip the market from a "buy" to a "avoid" territory. Instead, I would look at suburb characteristics, because these basic fundamentals apply in ALL markets. You just have to look for that. 1. Established family suburbs with strong owner-occupier demand These are areas where families want to live long-term because of schools, safety, transport, shopping, parks and community feel. Good examples can include parts of Glen Waverley, Mount Waverley, Doncaster, Box Hill, Bentleigh East, Blackburn, Ringwood, Vermont South, McKinnon, Oakleigh, Clayton and surrounding pockets. But the street, the school zone, the block, the floor plan matters. A poor property in a good suburb can still be a poor investment. 2. Middle-ring suburbs with land value and transport Middle-ring Melbourne still has long-term appeal where buyers can access the CBD, major employment hubs and lifestyle amenities. These suburbs often have established infrastructure and stronger resale appeal than outer growth areas. The key is avoiding overpaying for renovated emotion. A pretty kitchen does not fix a bad block, poor orientation, structural issues or a compromised location. 3. Suburbs benefiting from infrastructure, but not relying only on it Infrastructure can help. Melbourne’s Metro Tunnel is now operational, and major transport upgrades can improve access and convenience. But investors should not blindly buy near every station or project. Infrastructure can increase demand, but it can also attract density, noise, traffic, parking pressure and oversupply. 4. Selective unit and villa markets Not all units are bad. Not all houses are good. Older, well-located villas or low-density units in established suburbs can sometimes offer strong rental demand and better affordability. But high-rise investor apartments in oversupplied locations remain dangerous, especially if body corporate fees are high and resale demand is thin. The rule is simple: scarcity wins. Commodity stock struggles. Forecasts for Melbourne Property in 2026 and 2027 and Beyond Forecasts have shifted quickly. Earlier forecasts were more optimistic, with some groups expecting Melbourne to rebound strongly in 2026. Domain had previously forecast stronger national and Melbourne growth, while other analysts saw Melbourne as a recovery candidate due to its underperformance. Melbourne was on the cusp of recovery in late 2025, but a series of interest rates hikes and the Iran War, dampened things. While the negative gearing changes can further suppress demand, Melbourne investors are expected to benefit from the revised CGT scheme. ANZ now expects capital city price growth to slow, with Sydney and Melbourne likely to underperform in 2026. Some major bank and economist commentary after the Budget has warned that investor demand may weaken and that Sydney and Melbourne may face price falls or flat conditions, especially in the short term. My view is this: Melbourne in 2026 and 2027 is likely to be uneven, not explosive. Quality assets may hold up well. Compromised properties may struggle. Investor-heavy locations may soften. Scarce family homes may remain resilient. New builds may attract more tax-driven demand, but that does not guarantee good capital growth and yield. Established properties may become more negotiable, especially where vendors are exposed, tired or unrealistic. The best buyers will not be chasing hype. They will be looking for facts and data, realistic sellers, mispriced assets and long-term fundamentals. The Big Mistake Investors Make The biggest mistake in 2026 and 2027 will be reacting emotionally to tax changes. Some investors will panic and avoid established property altogether. Others will rush into new builds purely to preserve negative gearing. Both can be wrong. A bad new build is still bad. A good established property can still be excellent. The tax should not not be the reason why you invest or not. Investors need to model the property properly: purchase price, rent, vacancy risk, interest rate sensitivity, land tax, council rates, insurance, body corporate fees, maintenance, depreciation, after-tax cash flow, future resale demand, and realistic capital growth. Be Cautious with Anyone Marketing New Build You've seen this. The top 3 secret boom locations that these spruikers often proclaim. But no, they won't disclose where they are because their locations are "secret" and only their subscribers can invest in. And so, you're enticed into signing up to their services, only to discover you're buying one of the hundreds of brand new builds. New build marketers often operate outside of the real estate legal framework. Many of these project marketers are just off-the-street salespersons, not licenced real estate agents. They claim they do not need to be licenced as they are just administrators, working on behalf of Agent Scott. So, they produce Scott's licence, if challenged. This is illegal. They target the lazy or rookie investors who just want to buy an investment property and has no interest in doing proper due diligence. They're often claim optimistic rent, a low vacancy assumption, a perfect interest rate forecast and a generous tax outcome. Always independently verify their claims. Good investing should survive imperfect conditions. What Buyers Should Do Now For investors looking at Melbourne in 2026 and 2027, this is not the time to sit on the fence forever. But it is also not the time to buy blindly. The uncertainty in the market is making buyers and investors stay away, and with less competition, this is a great time to get into the market. The uncertainty is giving buyers more leverage than they had during the hotter cycles. More supply and softer sentiment can create opportunities. But that advantage disappears quickly if you buy the wrong property. The smart move is to be prepared before everyone else regains confidence, and this means: Know your borrowing capacity. Get tax advice before purchasing. Model the cash flow without relying on generous tax benefits. Understand whether the property is new, established or grandfathered. Compare recent comparable sales, not agent hopes. Inspect the street, not just the house. Check school zones, overlays, zoning, flood risk, bushfire risk and powerline proximity. Understand rental competition within the area. Negotiate hard, but only after knowing true value. This is where investors can create an edge. As Sun Tzu would say, victory is won before the battle "是故胜兵先胜而后求战，败兵先战而后求胜". In property terms, the purchase is won before the auction, before the offer, and before the agent knows you are serious. How does the Melbourne Compare to Queensland and Western Australia? Compared with QLD and WA, Melbourne is the value-and-recovery play. Queensland and WA are the momentum-and-yield plays. Different game. Here’s the blunt version. Market Current character Main upside Main risk Melbourne / Victoria Undervalued, soft sentiment, more negotiable Better relative value, deeper economy, long-term population/jobs base Higher land tax burden, weaker short-term momentum, tax changes hit established investors Queensland Still strong, but more mature in the cycle Population growth, lifestyle migration, tight rental markets Some areas already expensive; flood risk; investor-heavy pockets exposed Western Australia Strongest momentum, tightest rental market Better yields, strong rent pressure, affordability vs eastern capitals Mining-cycle exposure, boom/bust history, Perth may already be well into the run For more details, click through for detailed analysis and our verdict. Final Thoughts: Melbourne Is a Sniper Market Melbourne still has long-term investment appeal. It has scale, jobs, education, migration, lifestyle demand, established infrastructure and relative value. But the 2026 market is not a simple “Melbourne will boom” story. It is more complex than that. The latest tax changes mean investors must be more disciplined. The latest interest rates environment means borrowing power is tighter. The latest data shows softer conditions in Melbourne and more choice for buyers. The latest forecasts are no longer universally bullish. This is not bad news. In fact, for serious buyers, it IS good news. When the market is uncertain, emotional buyers step back. Lazy investors get confused. Spruikers start pushing whatever product still pays them. And buyers who know what they are doing, get the rare chance to negotiate. Melbourne property investment in 2026 is not dead. But the lazy version of it is. The winners will be the buyers who choose quality, understand the tax changes, avoid compromised stock, and buy with clear numbers rather than blind optimism. In this market, you do not need to buy everything. You just need to buy the right one. And for the right buyer, the right property is still out there.

The 2026 Federal Budget announced on the 12 May 2026, has changed the property conversation. Negative gearing is being limited. Capital gains tax treatment is changing. Trusts are under more scrutiny. Investors are suddenly doing what investors always do when the rules change: recalculating, hesitating, defending old decisions, and pretending their spreadsheet is more objective than their ego. But here is the bigger point. Tax policy does not buy property. Borrowing capacity does. That is why we have to look at the Budget changes together with serviceability, affordability, rental demand, housing supply, buyer psychology, and market segmentation, just to answer one simple question: “Will the Budget 2026 changes cause property prices crash?” Or, maybe, the better question should be: “Which properties will become harder to justify, and which properties will remain resilient?” Because Australia, including Melbourne, does not have one property market. A quality family home in a tightly held school zone will not behave the same way as a generic investor-focused apartment in an oversupplied or overpriced precinct. Same country. Different Property. Different Location. Different dynamics. First, what has actually changed? The Government has announced major reforms to negative gearing and capital gains tax. These changes are designed to reshape where investor money flows, away from established dwellings and towards new housing supply. But let’s be clear: negative gearing is not dead. It has changed. Negative Gearing Changes From 1 July 2027, negative gearing benefits will be limited to new residential properties. Existing arrangements will be grandfathered, which means the changes do not affect current investors who already hold negatively geared properties. In most cases, current investors will keep their existing tax treatment for as long as they continue holding those properties. That matters. It gives many current investors a strong reason to hold rather than sell. If they sell, they may lose that slightly more favourable tax position. So instead of creating a flood of investor listings, these changes may actually encourage some existing investors to sit tight, tightening supply in the established properties. For established residential properties purchased after the Budget night cut-off on 12 May 2026, losses will no longer be deductible against salary and other personal income in the same way. Instead, those losses may be carried forward and used against future residential property income or capital gains. So again, negative gearing is still alive, but it has been tweaked. And this changes the numbers for future investors. Capital Gains Tax (CGT) Changes The current 50% capital gains tax discount is also being replaced with an inflation-based indexation approach. New-build investors will receive more favourable treatment compared with investors buying established dwellings. In simple terms, the Government is trying to make new residential property more attractive to investors than established property. The Government wants less investor demand chasing existing homes, and more investor capital helping to create new housing supply. That is the idea, but whether the market behaves that neatly is another question. When you read between the lines and understand the indexation method, the new CGT indexation method can penalise properties that outperform inflation, and is a better calculation for properties which underperformed. Effectively, it is hitting the Brisbane, Perth, Adelaide market and their investors. These markets have had explosive growth in recent years, outpacing inflation. Whereas the Melbourne market had performed that well. Will this then redirect attention to the Melbourne market as well? If you need more information of the changes and some myths and misinterpretations around these changes, head over to our other articles where we explain in more details what was changed, and their implications. 2026 Budget Changes 2026 Budget Myths and Mis-interpretations What This Really Tells Us There is also a quiet admission in these changes. Despite years of investors being painted as the problem, the Government clearly understands one uncomfortable truth: Property Investors supply rental properties. If investor activity is killed completely, the rental market gets hit. The Government is not building enough homes on its own, and they are not going to. Private investors will continue to play a major role in providing rental accommodation. So the Government is not trying to remove investors from the market altogether. It is trying to redirect them. This means less established property speculation, and, more new housing supply. That is the intention. The Missing Factor 1: Serviceability The Budget changes will influence investor behaviour. But serviceability will decide how much buyers can actually pay. Investors need to understand this. A buyer may want to pay $1.2 million. But when their mortgage broker say they can borrow only enough to pay $1.05 million. That $150,000 gap is not solved by confidence, mindset, or motivational property podcasts. What affects the investor's Serviceability? Serviceability is affected by: interest rates income living expenses household debt bank assessment buffers rental income shading credit card limits dependants loan-to-value ratio tax treatment of investment losses This is why the Budget changes are landing on a market that was already under pressure. Cotality’s May 2026 housing analysis says Australia’s housing market is close to a downturn, with higher interest rates and stretched affordability weighing on demand. It also notes Sydney and Melbourne are already in the early stages of decline, while growth is slowing across the mid-sized capitals. So the Budget changes are not happening in isolation. They are being added to a market already dealing with affordability stress. That makes the impact more powerful in some segments, but still unlikely to create a broad crash by itself. The Missing Factor 2: Demand and Supply Just like any free market, house prices are affected by Demand and Supply. When things are scarce, but demand is strong, prices go up. Buyers are willing to pay more to buy that. Sellers Are Not the Devil Sellers can demand $2million for their $1million dollar hour, and if no buyers see value in that asking price and are not prepared to pay that, there is no deal. The property stays unsold until the price either drop or demand catches up and buyers start seeing value in the the $2million price tag. Investors Aren't the Devil Either Most disciplined investors buy properties based on its ROI, yield, or growth potential. Investors' buying decision is driven strictly by numbers. They either expect the price to grow x% in y years, or they are expecting at least z% rental yield. Now, because these numbers are directly tied to the property's purchase price, they will not be paying for overpriced properties. In other words, They are paying no more than market price for properties they buy. There is also a hidden but obvious benefit to investor purchases. Investment properties adds to the properties in the rental market. Most investors are sensible. And sensible investors are not going buy a million dollar asset, lock it up while waiting for prices to rise. They will be leasing the property in the rental market. And it is often at a much lower price, than if the renter were to buy and live in it. Investors know the renters can only afford that much, and most would not risk having an empty property when they priced their rents too high. The government recognised that, and are helping investors provide lower-priced rental properties by a mechanism called negative gearing. It is not subsiding investors, it is just helping investor keep rental prices low, so renters can afford a lower priced rental property. Without these negative gearing, rents will need to be higher, to justify the investment and risks. Home Buyers Are Emotional Buyers From experience, home buyers often purchase the properties because there is something in the property they want. They want to be in good school zones, near shops, easy access to public transport, near city, and they want that "Feel Good" emotional feeling when they are in the property. Home buyers are often the emotional buyers who will pay slightly more than the next highest offer, so they can buy the property. They often do not mind pushing prices slightly higher to buy a property they have an emotional attachment with. This is important, as unlike renting, they will be stuck with the property for many more years to come. Sales agents know home buyers are driven by emotions. And their jobs are to "encourage" the buyers emotions. Most buyers hate this as this usually lead them to stop thinking sensibly and overpay. This is why buyers who understand this dynamics would prefer to engage a buyers agent as a go-between to filter these emotions. And statistics show this strategy works. We saved a home buyer half a million from their home purchase some years back. And had recently saved a buyer $130k. Will property prices crash? No, I do not expect a broad property price crash from these Budget changes alone. A real crash usually needs something more severe, such as: rising unemployment forced selling credit tightening financial system stress major oversupply a sharp interest rate shock widespread mortgage distress Tax changes can reduce demand, especially investor demand, but they do not automatically force large numbers of owners to sell. Commonwealth Bank (CBA) expects the Budget changes to make established investment properties less attractive and estimates prices will be about 3% lower than they otherwise would have been, with a smaller impact on rents. CBA also revised its dwelling price growth forecast to 3% to December 2026, down from 5%, while leaving its 2027 forecast at 3%. That phrase matters: "Lower than they otherwise would have been." It does not necessarily mean prices fall 3%. It means prices rise more slowly. Some markets may go sideways. The weaker investor-heavy stock will falls, while quality owner-occupier stock still rises. So no, this does not look like a blanket property crash. It looks more like a market split. The market will not move as one The Budget changes will affect different property types very differently. The impact will depend on: how much investor demand exists in that segment whether the property is new or established whether the property has owner-occupier appeal rental yield land value scarcity local supply borrowing capacity of likely buyers affordability pressure in that price bracket whether buyers are emotionally or financially driven This is where sweeping statements becomes useless. A $550,000 investor-focused apartment, a $900,000 townhouse, a $1.4 million family home and a $2.5 million school-zone property are not the same market, and they will not behave to these changes 1. Established Investor Properties will be Affected Existing investors are protected from the negative gearing changes, but future capital gains from 1 July 2027 may still fall under the new CGT rules. That means current investors are not completely untouched, although the impact will only be realised when they eventually sell. The biggest loser is established properties that only become attractive because of tax treatment and hoped-for capital growth. This includes: investor-focused apartments generic townhouses low-land-content dwellings properties with high owners corporation fees low-yield properties high-maintenance rentals properties in areas with heavy investor ownership assets that only made sense because of negative gearing Buyers of these established properties will be asking a very fair question: “If I cannot offset the loss against my wage income, and the CGT treatment is less generous, why am I buying this?” This question alone will immediately reduce demand in certain markets. The weaker the property fundamentals, the bigger the problem. A CBD apartment which is already facing a difficult sale, will take a lot longer to sell, or sell at a price (usually much lower) that makes sense to the new investor. Resale prices of brand new CBD apartments which are currently selling at 20-30% loss, will have to be priced lower. Many of these average assets will be exposed, not because they suddenly became bad properties, but because they were never that good in the first place. The current tax system was just sweetening the bad deal. 2. New Builds Will Attract More Investor Attention Because the negative gearing rules now favour new residential properties, some investor demand will likely move toward new builds. Tax-benefit-sensitive investors will now be focusing on: new apartments townhouses house-and-land packages development pre-sales growth corridor properties This is exactly what the Government wants: push investor capital toward creating new supply instead of bidding up existing homes. But there is a trap. There is a reason why experienced investors avoid investing in these new properties. New Builds can be a Trap For a long time, new builds have always been affordable. There has never a supply issue with new builds. But there is a demand issue. Not many buyers are buying them. While first home buyers felt investors ("investors" because the mass media narrative says so) are beating them to the $950k house, many sub-$700k properties are available for immediate purchase, with little to no competition. You can buy one, and some vendors are more than happy to give you an incentive to buy them! And there are reasons why these properties are untouched: Weaker Infrastructure and Amenities High rental vacancies Weak land content body corporate costs Usually oversupplied Remote locations, no long-term buyer demand With the change in negative gearing rule, investors will be attracted to these new builds, but investors should proper due diligence. The negative gearing tax benefit does not turn a bad asset into a good one. It just makes the bad asset look prettier in the glossy brochure. Honest Buying Advice: Do not be attracted by the negative gearing rule. It may attract you to buy the oversupplied apartment, or faraway house. When you sell, your "New Build" becomes an established and the investor taking over your property will not enjoy the Negative Gearing benefit. They will price their offer accordingly. 3. Blue-chip Owner-Occupier Homes Will Be More Resilient These tax changes are less likely to affect quality owner-occupier homes. Quality family homes in strong owner-occupier suburbs should hold up better because most buyers are not purchasing them for negative gearing or tax benefits. They were bought for: school zones land lifestyle family needs scarcity long-term security location emotional attachment generational wealth A family trying to buy into Glen Waverley, Mount Waverley, Balwyn, Camberwell, Doncaster, Kew, Brighton, Box Hill or other tightly held suburbs is not sitting at the dinner table obsessing over the new negative gearing rules or how the CGT is calculated. Taxes are not the reasons why they buy it. They want the right home, in the right location, and for many other long-term reasons. That is a very different type of demand. While investors may become more cautious because of affordability, serviceability and tax treatment, buyers and investors in the blue-chip owner-occupier market are often more adaptable. If their borrowing capacity is reduced, they do not leave the market. Many simply adjust their target. For example, an investor or buyer who was looking at a $3 million Balwyn home but finds their serviceability restricted to $2.5 million may not disappear. They may simply move their search to a $2.5 million Glen Waverley school-zone home, or another premium family in Mount Waverley that fits their budget. That is why the $1 million to $3 million prime Melbourne property market is unlikely to run out of buyers overnight. There is still strong demand from: high-income local families professional couples upgraders interstate buyers overseas buyers migrants school-zone buyers buyers with equity long-term wealth-focused owner-occupiers That does not mean every blue-chip property will rise. Compromised homes in blue-chip locations will still struggle, as usual. A bad floorplan, main-road position, bad orientation, steep block, easement issue, poor renovation, or unrealistic vendor expectation can still hurt the result. But good homes in quality locations will continue to attract competition. Here's how the property demand works: Tax changes reduce investor demand. Serviceability limits owner-occupier demand. Scarcity protects quality assets. That is the triangle. 4. Lower-priced Established Homes May Become More Accessible, but May Not Be Cheap That is the good news is, First-home buyers may benefit from reduced investor competition in some established property markets. But the not-so-good news is that good established properties will be rarer. In fact, the CGT and negative gearing changes will encourage owners of quality established properties to KEEP them. Why sell a quality property and be put onto the new negative gearing rule? The first home buyers' struggle to get decent lower priced properties in established areas is expected to get tougher. And when quality stock gets lesser, while demand remains or increase, prices go up. Quality houses in high-demand locations are expected to rise in price, not necessarily a drop in price. On the other hand, lower-priced properties with poor fundamentals (aka bad property) are expected to get cheaper. These had never had a supply problem anyway. So, first home buyers looking at affordable low-priced established homes will likely end up with a property with poor fundamentals. How will current property investors respond to the 2026 Budget? This is the key behavioural question. Not what investors should do. What they probably will do. Most Existing Investors Will Hold Because existing negative gearing arrangements are grandfathered, many current investors will hold their existing properties, especially if it is a high quality investment property. That creates a lock-in effect, locking buyers out of good properties. If they keep the property, they preserve the old tax treatment. If they sell, they may lose that advantage and then face the new set of rules, which is usually less favourable, if they buy another established investment property later. CBA expects housing turnover (supply) to fall initially because grandfathered investors have a stronger incentive to hold. So despite the dramatic mass media headlines, I do not expect a flood of new investor listings across the board. Many investors will, in fact, do nothing, because there are no changes to the tax rules if they do nothing and do not sell. And psychologically, many investors of these bad properties would prefer the low-effort status quo path anyway. They are usually the ones who jump onto social media to crowd source for the Top Boom Locations, or they copy their friends, because when their friends had bought one, it automatically makes a location feels good. Low effort investment strategy plan is a plan for long term pain. Some Investors Will Sell Weak Assets The Budget changes will make proactive investors review their portfolios more carefully. Investors will look at: rental yield land tax owners corporation fees maintenance vacancy risk insurance interest costs capital growth history future growth outlook to determine if the property still deserves a place in the portfolio Weak assets will be reviewed first, and this means some investors will start selling: poor-quality apartments low-yield properties high-maintenance houses properties in weaker oversupplied rental markets properties where the cash flow pain is no longer justified But not everyone will be dumping everything at once. Property investors tends to be very good at holding onto average assets while telling themselves “it is a long-term play”. This also let them keep them their "x properties" bragging rights at BBQs. Sometimes they are right, but most of the times, they are just emotionally attached to a bad purchase. Highly Leveraged Investors Will Become More Cautious Serviceability (or the lack of it) will be a major brake on investor activity. Under the new rules, some investors buying established properties may not receive the same lending benefit from negative gearing assumptions. The new rules will reduce borrowing power for some investors, especially those who are already highly leveraged or rely heavily on negative gearing strategy for the next purchase. The result? These investors will: pause refinance first reduce debt build buffers delay buying buy cheaper buy with higher yield consider new builds look at commercial property compare property with shares, ETFs and super stop buying altogether unless the numbers are compelling Aggressive investor with strong income, equity and borrowing capacity will still move, while the marginal investor will hesitate. That hesitation matters, especially in investor-heavy markets. Investor interests in these markets is expected to drop. How Will New Investors Respond to the 2026 Budget? New investors will become more numbers-focused. They have to. The new negative gearing and CGT changes means it is very unforgiving to investors of bad properties. The old formula of relying on negative gearing to get ahead becomes a lot weaker: Buy an established property, run a loss, offset that loss against personal income, hold long term, then rely on the 50% CGT discount later. For established properties purchased after the cut-off, the ability to offset losses against salary or other personal income no longer works the same way. The property now has to work harder on its own merits. But here is the next problem. Spruikers and project marketers will push brand-new properties even harder because negative gearing still applies to new builds. Technically, they may not be wrong. But investors need to ask: “This tax benefit may work for me as the first buyer. But what happens when I eventually sell?” The next buyer may not receive the same benefit once the property is no longer new. A savvy future buyer will look past your original tax strategy and assess the asset itself. They will ask: Does the cash flow work? Is the rental yield strong enough? What is the land tax exposure? What is the vacancy risk? Is the property sensitive to interest rate changes? Does the loan still service if conditions change? Are the capital growth fundamentals strong? Does the property still make sense without tax incentives? This is actually a good thing. Too many investors have bought mediocre property because tax treatment softened the pain. A poor asset could look tolerable because the tax system helped carry the loss. That does not make it a good investment. It just makes the mistake less obvious. For years, opportunistic developers and project marketers have used this to sell overpriced, substandard properties in oversupplied locations. “Look at the depreciation.” “Look at the tax benefit.” “Look at the rental guarantee.” Beautiful brochure, but ugly fundamentals. Now the asset has to stand more on its own merits. That is healthy. But some investors will still chase new builds purely because the tax treatment looks better. While the savvy investors are buying better assets, the dangerous investors will chase tax benefits from project marketers with glossy brochures, optimistic rental projections and a suspiciously perfect growth story. That group needs supervision — preferably from someone with a calculator, market experience, and a nonsense detector. How Will Owner-Occupiers Respond to the 2026 Budget? Owner-occupiers will remain active. Nothing has changed for owner-occupiers. Affordability will shape behaviour as usual. They will: become more cautious and avoid overextending focus harder on repayment comfort walk away from compromised properties faster prioritise lifestyle and school zones compete strongly for quality homes become less forgiving of bad streets The days of buyers blindly stretching for anything with a roof are likely to soften in some less established areas. Quality homes will still attract competition, and competition is expected to get a lot tougher. Why? Because supply is further limited and good homes are harder to come be, as current owners hold on to quality properties, reducing quality stocks in the market. A-rate properties will still perform. B-grade properties may go sideways. C-grade properties will slide. How Will First-Home Buyers Behave? First-home buyers may get a better chance in some segments. They may face less investor competition for established properties, especially lower-priced apartments, units and houses, in over supplied locations. But if they believe they can pick up a quality inner city property for cheap, they might have to keeping waiting. With less quality properties coming into the market, and a never ending demand for them, they will get the same "outpriced" feeling. The new negative gearing and CGT changes does nothing to improve this feeling. It will, in fact make it worse. Good properties will be harder to come by. If they are serious about home ownership, they might have look further, in locations which currently do not have supply issues. But what the budget did not mention is, even these locations, which used to be cheaper, will be more expensive, as investors are now attracted to them. First home buyers will need to expect to pay more to buy them, due to the higher competition. So, while these new tax changes does not magically make a $1 million home affordable for someone approved for $750,000. It will likely cause increased competition for these new house and land packages, driving prices up. Just like any government supported incentives, instead of helping first home buyers, these changes will in fact make it harder for first home buyers. The Budget still assumes strong population growth and continued net migration, which will keep adding pressure to housing demand, especially in major cities. And population growth without the corresponding increase in housing supply will put pressure on housing demand, pushing prices up, making buying the first home harder. How Will Upgraders Respond to the 2026 Budget? Upgraders are very important, especially in Melbourne’s family-home markets. They might have equity, but they are still challenged by current owners holding onto good properties. They will also face higher prices, and if it does not make financial sense for them to upgrade, they will delay the plan or not do it at all, creating another lock-in effect. So in quality family suburbs, we may see limited supply because owners are reluctant. The limited supply will often lead to higher prices, even when buyer demand softens. This is why high-quality owner-occupier areas may remain more resilient than the headlines suggest. What is the Effect of the 2026 Budget Changes to Renters? Renters are unlikely to get major relief in the short term. They may, in fact, be worse off. That may sound unfair, but it is the likely outcome. Rents are driven by rental supply and tenant demand. Good locations will be more expensive to rent, and harder to come by, while rent in locations where no renter wants, such as growth corridors, new estates will soften further. Right now, the rental market is still tight. Cotality’s May 2026 analysis says affordability pressure is already weighing on housing demand, and its recent housing data has continued to show tight rental conditions across many markets. The Budget changes may affect renters in two opposite ways, depending on the market conditions. Possible positive effect for renters If investor money shifts into new housing, the rental pool will increase, and rental supply could improve, leading to less competition for rental properties and thus, lower rent. But this will not happen overnight. There will be a lag of at least 2-3 years, before significant changes can be noticed. This lag is due largely to time needed for planning, financing, construction, etc. Councils take even more time, because apparently paperwork always needs a spiritual journey to the netherlands. So even if the policy works, renters may not feel relief quickly. Where will the new rental supply be? The more important question is, where will these new supply of rental properties be? New estates, of course. That's where investors will be attracted to from now on. Do they current have a rental supply issue right now? No. In many new estates, vacancy rates are as high as 4-5%. Every second house is available for rent, and renters are not short for choice. But why are renters do not want them, due to the location. Possible negative effect for renters When investors buy fewer established rental properties, and some existing rental homes are sold to owner-occupiers, the number of rental properties in some suburbs WILL shrink. That is especially important for family trying to get rental properties in established suburbs with good schools and amenities. You cannot easily create more detached family homes in Glen Waverley, Mount Waverley, Doncaster, Balwyn, Camberwell or similar areas. If investor-owned family homes are sold to owner-occupiers, renters looking for family homes in those areas may face even tighter supply. And the law of demand and supply say, high demand + low supply = higher rental prices. So the rental impact will not be uniform. Apartment renters and renters renting in new estates with new supply may eventually benefit, it will be easier to get a rental property. Increased supply = lower rent, as these places never had high demand anyway. Family renters in established suburbs may face more pressure. And the law of demand and supply say, high demand + low supply = higher rental prices. What Do the Changes Mean to Rental Prices? Rents are NOT expected to fall across the board. In fact, rent is expected to RISE in established suburbs with good amenities. So, this is how rent prices could play out: rent in established homes continue rising supply of rental family-home with good amenities and fundamentals gets less, and rent is likely to rise faster apartment rents depend heavily on new supply growth corridor (new estates) rents depend on infrastructure and population flows rents in current high vacancy markets is expected to slide. There is also a practical limit to rent increases. While landlords may want to increase rents, tenants can only pay so much. If rents rise faster than incomes, renters will likely respond. We are already seeing tenants reduce rental costs by: sharing homes moving further out delaying moving out of family homes accepting smaller dwellings relocating to cheaper suburbs leaving expensive markets altogether So rents may stay under upward pressure, but affordability will eventually limit how much more landlords can extract. The market can be brutal, but tenants have to be ready to move. As they say "vote with your feet". Will Property Prices Rise, Fall or Stay the Same? The answer is yes. Prices will change. But different segments will do different things. Prices may fall or underperform in: investor-heavy apartment markets poor-quality established units high owners corporation fee properties generic townhouses low-yield investment stock oversupplied new-build areas suburbs with weak employment access properties relying heavily on tax benefits locations where buyers are already at their borrowing limit These assets may not crash, but they will have less support. Prices may stay flat in: middle-ring suburbs with mixed buyer demand average townhouses older homes needing expensive renovation secondary locations properties that are decent but not special areas where buyer interest exists but serviceability caps bidding This is where we may see long periods of sideways movement. Prices may continue rising in: scarce family-home markets strong school zones land-rich suburbs tightly held owner-occupier areas affordable areas with strong employment access markets with limited listings selected new-build markets with genuine demand areas where supply is structurally constrained Good properties will not become cheap just because tax rules changed. With less supply of good properties in the rental market, rent is expected to increase faster. Melbourne Property Market Outlook 2026 and Beyond Victoria already has higher investor friction because of land tax and holding costs. Investor sentiment in Victoria has already been weaker than in some other states. Now, when you add: negative gearing changes CGT changes affordability pressure tight serviceability uneven population flows weaker sentiment in some Melbourne segments The result is going to be a very segmented market. Melbourne apartments Most exposed, especially investor-focused apartments with poor owner-occupier appeal. Older apartments in good boutique blocks and strong locations may still perform reasonably, since their holding costs are low. Generic high-density investor stock, is more vulnerable. Melbourne townhouses Townhouses in Melbourne is expected to have mixed performance. Good townhouses near transport, schools and lifestyle amenity should hold up. Poorly designed, cramped, dark, high-density townhouses with weak land value may struggle. Blue-chip family homes These will be more resilient. These are driven by owner-occupiers, not negative gearing. CGT and negative gearing has never played a role in their ownership decision. Serviceability may cap how high buyers can go, but scarcity will still support good homes. Balwyn buyer may now buy a Glen Waverley mansion, while a Toorak or Hawthorn buyer will now be looking at Kew and Balwyn. There will not be a shortage of buyers. School-zone homes Still strong, but not bulletproof. A good school zone will not save a bad floorplan, bad street, easement issue, flood concern, main-road position or badly overcapitalised property. School-zone buyers may still compete hard, but they will be more selective. Growth corridors Some growth corridors may benefit from investor interest in new builds. New investors are now attracted to the possibility of old negative gearing rule. However, depending on your goals, most are not suitable for investors. These areas tends to have lots of supply in the pipeline, and they do not usually attract renters. IE, most of the locations along growth corridors suffer from high vacancy rates, low growth. It is basically in a over supplied market. But not all are bad. some estates are in demand, even though they may be further from the CBD. If you are investing in these growth corridors, keep a look out for: oversupply weak scarcity infrastructure lag small land sizes poor transport build quality future resale depth A new house-and-land package is not automatically an investment-grade asset. Sometimes it is just a paddock with depreciation. What Will Happen to Property Markets Across Australia? The effect of the negative gearing and CGT changes will not be the same across Australia. Sydney and Melbourne More vulnerable to affordability pressure because prices are already high and serviceability is stretched. Cotality has noted Sydney and Melbourne are already in early decline phases, with affordability and rates weighing on demand. Quality assets should remain resilient, but weaker stock may soften. Brisbane, Perth and Adelaide These markets have had stronger recent momentum, supported by affordability advantages, supply shortages and migration trends. Cotality’s 2026 outlook noted that Queensland, Western Australia and South Australia were supported by relatively better affordability, internal migration and housing supply shortfalls. However, given their recent explosive growth, they are expected to be the worse off, under the new CGT indexation method. Investors are already reassessing the impact as we speak. They may still slow, but the underlying demand picture may remain stronger than Sydney and Melbourne. Regional markets Regional Markets are expected to be Mixed as well. Strong regional centres with jobs, infrastructure, lifestyle appeal and tight supply may hold up. Weak regional markets with thin employment bases and poor rental depth may struggle. Regional property is not one category. Some locations are strong. Most are traps with nice trees. The Affordability Paradox The impact of affordability is the part buyers need to understand. The Budget changes may reduce investor competition and slightly reduce price growth in some areas. That will help with affordability. But serviceability ceiling due to higher interest rates and the inability to use property losses to offset personal wage taxes will reduce the purchasing power and may prevent some buyers from purchasing. Heavily leveraged investors will likely be locked out of the property market, until their serviceability improve. Example: A property that may have sold for $900,000 now sells for $870,000. That sounds like an improvement. But if the buyer’s borrowing capacity has fallen from $850,000 to $790,000 because of interest rates, expenses and bank buffers, they are still locked out effectively. So, while the market can become more affordable, the buyers will still feel they are unaffordable. That is why tax reform alone cannot fix housing affordability. Property prices are determined by demand and supply, and serviceability. To genuinely improve affordability, Australia needs several things to move together: more supply in the right locations lower construction red tapes and bottlenecks stable or lower interest rates wage growth in real terms better borrowing capacity housing planning reform, not tax reform infrastructure delivery more rental supply by encouraging private investments better-quality housing choices The Budget changes can help to a certain extent. It is never meant to be the whole machine. I believe the government knows it. And many are already invested in blue-chip locations, which, you know is set to rise further. What Will Investors Actually Do Next? Current investors will likely: hold grandfathered properties longer avoid selling unless the asset is weak push rents where the market allows refinance or restructure debt build larger cash buffers review land tax exposure sell poor-performing assets selectively delay new purchases look harder at new builds talk to accountants about CGT, trusts and deductibility become more focused on yield and cash flow New investors will likely: focus more on cash flow demand stronger rental yields compare new versus established more carefully chase depreciation benefits be more cautious with established properties look at new builds consider alternative investments rely more heavily on buyers advocates and property advisers to select the right asset still make mistakes if they chase tax benefits instead of fundamentals Investors will not disappear. But they will adapt. Some will become smarter. Some will become scared. Some will become fresh meat for project marketers. What Will Property Buyers Do Next? Owner-occupiers will likely: remain active in quality locations become more finance-conscious demand better value walk away from compromised homes prioritise long-term lifestyle and security focus on school zones, land and scarcity First-home buyers will likely: benefit from reduced investor competition in some established markets still struggle with borrowing capacity compromise on location or dwelling type use government schemes where available compete hard in affordable price brackets remain vulnerable to overpaying in popular entry-level suburbs Interstate and overseas buyers will likely: become more cautious about established investment properties seek stronger local due diligence compare Melbourne against other states focus on asset quality, rental demand and resale depth need better advice to avoid buying tax-driven rubbish The Property Outlook Over the Next 12 to 24 Months In our opinion, because the key negative gearing are grandfathered and CGT changes have no impact until investors sell, 1. No broad crash The Budget changes are significant, but not enough by themselves to crash the national market. In some markets, selling activities will increase, leading to softening of prices. These will likely happen in markets where property prices had outpaced inflation, and where selling under the current CGT is beneficial, eg, Brisbane, Perth, Adelaide. Whereas in markets such as Melbourne, we are not expecting to see such selling, as the price growth had lagged inflation. Selling under the new indexation method may be beneficial. 2. Slower price growth in most areas CBA’s updated forecast points to slower price growth after the Budget changes. This is true only because weak prices will offset the price boom of quality properties. 3. More segmentation Quality properties will separate from weak properties. 4. Established investment stock weakens Especially where the numbers only makes sense when negative gearing is factored in. 5. New builds receive more investor attention inexperienced investors being attracted by the possibility of offseting property loses against earmed income. But not all new builds deserve it. 6. Existing investors hold longer Grandfathering creates a lock-in effect, reducing stock of established properties in the market. Reduced supply without reducing demand leads to price rise. 7. Serviceability becomes the ceiling Even if buyers want to pay more, banks may stop them, as they can no longer offet propert losses against their taxes. 8. First-home buyers get slightly better conditions in lesser locations Less investor competition helps, but borrowing capacity still limits them. 9. Renters remain under pressure Rental relief depends on investors buying and putting the properties on the rental market. This is the only way to increase supply, tax changes penalising investors will not help. 10. Good advice becomes more valuable (and expensive) The gap between good property and bad property will widen. TL:DR? Yes, we know, there are a lot to digest and our team has gone through a long thought process to understand the changes, their impact and project what this means to the property market in the coming months. Table1: Summarises the essence of the article by Property Types: Market factor / buyer group Likely effect Price impact Impact to Renters Established investment properties Less attractive for new leveraged investors due to reduced tax benefits Flat to weaker growth; some falls in weaker stock Established rental properties in good locations become rare, Driving up rents. New builds Investors pivot toward new apartments, townhouses and house-and-land packages, competing with first home buyers. May see stronger demand, especially from investors, leading to price rise. Renters in growth corridors, will have more choices, leading to lower rent Blue-chip family homes Strong demand due to scarcity and lifestyle drivers Likely resilient; may still rise if supply stays tight Established rental properties in good locations become rare, Driving up rents. Investor-focused apartments More exposed due to weaker tax appeal and high investor ownership Higher risk of underperformance. Price will weaken further, as investors stay away. Investors selling out, reducing rental properties in market. Rent rise. Table2 Summarises the essence of the article by Buyer Type Market factor / buyer group Behavioural change Market Impact Current investors with grandfathered properties Many will sit tight rather than sell and lose favourable tax treatment Prefers to hold, reducing quality established properties. Listings gets rare, price rise. Highly leveraged investors Delay purchases, refinance, reduce debt, build buffers Softer demand in investor-heavy markets. Less demand for below average established properties. First-home buyers No change, Slightly better buying conditions, not necessarily cheaper homes and better quality homes. Home Buyers No change. Slightly better buying conditions, not necessarily cheaper homes and better quality homes. Final word The 2026 Budget changes will not destroy the Australian property market, but they will expose weak properties. Established investment properties with poor fundamentals will become harder to justify. New builds will attract more attention, but some investors will overpay for tax benefits. First-home buyers may get a better chance in some established markets being abandoned by investors, but serviceability will still limit what they can afford. Renters are unlikely to see major relief unless actual rental supply improves. The real story is not “property crash” or “property boom”. The real effect is further segmentation. Good assets will remain desirable and prices will rise faster. Average assets will need to work harder. Poor assets will lose the protection of generous tax settings lazy investor demand, leading to softening of prices. The Budget changes will not punish every property owner. They will punish lazy buying. And frankly, the market could use a bit of that.