The federal budget was delivered on Tuesday 12 May 2026. For the inner-city strata market we work in, the weekend that followed was the high point. On Saturday 16 May home opens were as busy as the Saturdays before, but fewer buyers made offers. Since then the market has fallen for every residential type we sell: apartments, villas, townhouses and houses.
What the budget changed
Two housing-related tax measures from the budget are now law. The Treasury Laws Amendment (Tax Reform No. 1) Act 2026 received Royal Assent on 26 June 2026.
- Negative gearing: from 1 July 2027 it is limited to new residential builds. Investments held before 7:30pm AEST on 12 May 2026 keep the current rules.
- Capital gains tax: for gains that accrue from 1 July 2027, the 50% discount is replaced by cost-base indexation and a 30% minimum tax on capital gains. New homes can use either arrangement.
How these apply to any one person depends on their circumstances, so speak with your accountant or tax adviser.
Interest rates since May
The Reserve Bank’s cash rate target is now 4.85%. It rose by 0.25 percentage points in May, September and November 2026, and was held in June and August.
What we see in the market
Before May we would often sell a property on its first weekend. Now properties take longer, and at the wrong price they do not sell. Buyers still come to home opens, but fewer of them make offers.
Different measures tell slightly different stories, so it helps to name them. REIWA’s figures for October 2026 show 9,129 properties listed for sale at the end of the month, up 217% on a year earlier. Houses took a median of 27 days to sell and units 28 days, 19 and 20 days slower than a year before. Cotality’s index shows Perth values down 1.7% in October 2026.
General information only, not financial or tax advice.
Sources
- Treasury ministers, media release, 12 May 2026.
- ATO, “Tax reform: boosting home ownership”, updated 29 June 2026.
- Federal Register of Legislation, C2026A00049.
- Reserve Bank of Australia, cash rate target.
- REIWA, 4 November 2026.
- Cotality, 2 November 2026.
