The Australian housing market faces a correction as new federal tax reforms and ongoing RBA rate hikes dampen investor sentiment and activity. Prices are forecast to stall, with turnover expected to drop by 20% throughout 2026.
Key Takeaways
- 1.New federal budget tax changes, including limits on negative gearing and changes to CGT, are expected to significantly reduce investor demand and cause a sharp pull-back in market turnover.
- 2.National dwelling price growth is expected to stall in 2026, with an expected 2% decline nationally over the second half of the year.
- 3.The housing sector faces a challenging outlook due to the combination of interest rate tightening by the RBA and global energy-related inflationary pressures.
Table of Contents
- Executive Summary
- Australia: national housing conditions
- Overview: Rattled
- Consumer sentiment: housing
- Consumer sentiment: jobs & risk aversion
- Housing forecast update
- Prudential policy update
- New South Wales: Correction underway
- Victoria: Sinking feeling returns
- Queensland: Cooling
- Western Australia: Uncharted territory
- South Australia: Mixed messages
- Tasmania: Fragile recovery
- NT reignites; ACT fizzles
- Economic and financial forecasts
- Housing market data
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Authors
Neha Sharma
Themes
Housing market correctionFederal tax reform (Negative Gearing/CGT)Interest rate tightening cycleConsumer sentiment decline
Regions
Asia PacificAustralia