Ahhh The Good Old Budget!
Australian property has survived the removal of negative gearing before, ridden through multiple CGT reforms, interest rate cycles, and global recessions. And through all of it, well-located assets in high-demand markets have kept growing. The budget is not your biggest risk. Buying in the wrong place is.
Let’s Talk About Negative Gearing
If you're investing in a property that only works because of negative gearing, you're already in trouble. Negative gearing is a loss. You are losing money every month and hoping capital growth bails you out. That's speculation, not investing.
Here's what most people miss: If negative gearing were abolished tomorrow, positively geared investors in high-demand markets would barely feel it. The investors hurt most would be those already holding poorly performing assets propped up by the tax concession.
What About CGT Concessions 😅
Seriously. Are we really saying that without a CGT discount, property stops being a good investment? Come on.
If the only reason your property makes money is because of a tax concession on the way out, then the asset wasn't doing the work. The discount was. That's not an investment strategy, that's a tax strategy dressed up as one.
Let's be blunt: Australian property has doubled roughly every 10 years for decades. Rents keep rising. Supply keeps shrinking. Population keeps growing. None of that stops because the CGT discount changes. The wealth creation engine is still running. You just pay a bit more tax on the profit. You're still making the profit.
So What Markets Do You Target?
Forget the glamour suburbs and the mining boom towns. The markets worth your attention are the ones with tight rental supply, strong population inflows, diverse local economies and a tenant pool that is not going anywhere. Boring is good. Predictable is better. Wealthy is the outcome.
Avoid These Markets
Mining and resource towns with single-employer dependency
Oversupplied CBDs with high apartment vacancy
Low-yield areas where rent barely covers holding costs
Regional towns with shrinking or stagnant populations
Avoid H&L Packages spruiked by BA’s
Seek These Markets
Tight vacancy under 1.5% with consistent rental demand
Gross yields of 5%+ supported by real tenant demand
Diverse employment base: health, education, government, logistics
Infrastructure investment and population growth corridors
Strong owner-occupier demand
The Fundamentals That Protect You!
Yield is your buffer. Strong rental income means you're not relying on capital growth alone to make the numbers work. It gives you staying power through any policy cycle.
Tenant demand is your safety net. A vacancy rate under 1.5% means your property rarely sits empty. That's cash flow certainty, not hope.
Diversified local economies hold value. Markets with hospitals, universities, government hubs and logistics centres don't collapse when one sector shifts. Mining towns do.
Supply constraints drive long-term growth. When quality homes in quality suburbs are scarce, competition among buyers and tenants does the heavy lifting for you.
Final Verdict
Yes, get your tax structure right. Yes, understand the budget changes. But if you're buying in a market with strong yields, tight vacancy and real underlying demand, you're in a far stronger position than any budget change can undermine.
The investors who build lasting wealth are not the ones who chased yield in a mining town or bought off-the-plan in an oversupplied CBD. They bought boring, well-located, high-demand assets and held.
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