Blog

The Federal Government’s negative gearing and Capital Gains Tax (CGT) reforms represents a significant shift in how future property investments will be treated for tax purposes. For investors considering their next purchase, the changes may influence everything from the type of property they buy to how they assess cash flow and long-term returns. Legislated, many investors are reassessing their property purchasing plans and strategies. The core reforms have now passed Parliament, although some of the more detailed implementation rules are still being finalised ahead of their commencement. If you’re looking to buy an investment property down the track, here’s what you need to know about the reforms and how they change the playing field. What is changing? On 12 May, Treasurer Jim Chalmers handed down the Federal Budget, which included major changes to negative gearing and CGT rules.From 1 July 2027:Negative gearing for residential property investments will be limited to new builds.The 50 per cent CGT discount will be replaced with cost base indexation and a 30 per cent minimum tax rate on capital gains.Properties held before the announcement (7:30pm AEST 12 May 2026) will be exempt from the negative gearing changes, while the CGT reforms will only apply to gains accruing after 1 July 2027. How have the reforms affected the market and investors? When the changes were announced, Australia’s property market had already been cooling, driven by a combination of cash rate hikes, housing affordability constraints, the Middle East conflict, and cost-of-living pressures.But the Federal Budget reforms dampened the market even further, with auction clearance rates slipping to levels worse than during the pandemic, and investor confidence dropping.One survey of more than 1,400 Australian investors found that more than 80% believed residential investment property had become less attractive following the 2026 Federal Budget changes. At the same time, 51.5% said they planned to hold their existing investments and wait to see how the proposed legislation evolves.Overall, the survey offers a useful snapshot of investor sentiment, although it should not be taken as representative of every Australian property investor. Key shifts in strategy Since the announcement, there have been early signs that some investors are reconsidering where and how they invest, although it is too soon to say how the reforms will reshape the broader property market over the long term.New builds could attract more attentionWith negative gearing limited to new builds from 1 July 2027, there are signs that some investors are pivoting towards newly constructed properties.Data from property fund manager Oliver Hume shows the proportion of new-build sales to investors in Victoria has risen above 40 per cent for the first time since December 2024, for example. Experts say investors will likely switch to new units or houses on the outer city fringes, … [Read more...] about Are property investors changing course after the new negative gearing reforms?

When you’re planning to buy your first home or investment property, getting your head around all the jargon can feel overwhelming. One term you’re likely to come across is ‘conditional pre-approval’. Many buyers think conditional pre-approval means they’re ready to purchase a property immediately. However, conditional pre-approval is only one step in the lending process. Buyers heading into spring should understand what still needs to happen before finance is formally approved. What is conditional pre-approval? Conditional pre-approval is when a lender agrees in principle to lend you a certain amount of money. It’s often referred to as pre-approval or approval in principle.Conditional pre-approval doesn’t guarantee you a home loan. You still need to go through the loan application process and, once you find a property, your lender will still need to assess the property itself and may need to confirm that your financial circumstances have not changed.Once your lender has assessed and approved your loan application, that’s when you’ll receive formal, or ‘unconditional approval’. Benefits of pre-approval While you technically don’t need to be pre-approved when purchasing a property, it’s still considered advantageous for several reasons. Understand your budget Getting conditional approval gives you a realistic understanding of how much you can afford to spend on a property, and how much a lender is likely to be willing to lend you. This gives you confidence when bidding at auction or making an offer. Show sellers you’re serious Pre-approval shows sellers that you’re genuinely motivated to purchase and not wasting their time. It may give you an edge over the competition during negotiations, as it indicates your offer is less likely to be withdrawn due to lack of financing. Be ready when your dream property comes along By having your finance pre-approved, you can jump on opportunities when they arise. You may even be able to offer the vendor a shorter settlement period because your financial background check is already done, which may speed up the final approval process. How long does pre-approval last? Although conditional pre-approval is advantageous for a buyer, it doesn’t last forever. The validity of your pre-approval varies between different lenders and across different circumstances.If you haven’t found a suitable property before your pre-approval expires, your lender may ask you to provide updated information or complete another assessment.It’s also important to let your broker know if your circumstances change while you’re house hunting. A new job, additional debt, a change in income or higher expenses could affect your borrowing position.Thinking about buying this spring?Purchasing a property can feel overwhelming at times, particularly when it comes to understanding your finance options. Working with a mortgage broker gives you access to guidance and support … [Read more...] about Home loan pre-approval: What you need to know before house hunting this spring

You might be earning the same income as you were six months ago, but that doesn’t necessarily mean you can borrow the same amount. Understanding your borrowing capacity is an important step before you start your home-buying journey. Your borrowing capacity is influenced by a range of factors, and it can change over time, even if your income hasn’t. Interest rate fluctuations, regulatory settings, credit card limits, living expenses, existing debts, and lender policies can all affect how much a lender may be willing to lend you.If you’re planning to buy, refinance or invest, it’s worth understanding where you stand before you start making property plans.Here are some of the key factors that could affect your borrowing capacity. Higher interest rates can reduce borrowing power Interest rates have been a major focus in 2026, with multiple cash rate increases affecting how lenders assess borrowing capacity.When rates rise, the amount a borrower may be able to access can reduce, as lenders need to consider the impact of higher repayments both today and into the future.When assessing a home loan application, banks also apply a stress test using your interest rate, plus a 3% serviceability buffer. The Australian Prudential Regulation Authority (APRA) also requires banks and other authorised deposit-taking institutions to apply a serviceability buffer of 3 percentage points when assessing home loan applications. For example, if your home loan interest rate is 6%, the bank will assess you on a 9% rate. This allows lenders to test whether you can afford future interest rate hikes, but it also reduces your overall borrowing capacity. High debt-to-income lending limits From 1 February this year, the APRA introduced limits on high debt-to-income (DTI) lending. The main reason was to prevent a dangerous accumulation of risky lending.The cap limits banks to issue no more than 20% of new mortgages to borrowers with total debt above six times their gross annual income. This applies separately to owner-occupier and investor lending.The DTI changes do not directly reduce your borrowing capacity, but rather functions as a portfolio cap for banks. So, if your combined debts (i.e. your existing mortgage, car loan, credit cards, and new home loan) push your DTI ratio to six times your gross annual income or more, home loan approval may be harder if your chosen bank has reached its 20% high-DTI limit. Credit card limits can affect your assessment Having multiple credit cards with high limits can negatively impact your borrowing capacity, even if you rarely use them or carry no outstanding balance. That’s because lenders treat your total available credit as an ongoing financial commitment when calculating how much they’re prepared to lend.If you have credit cards you no longer need, closing unused cards before applying for a home loan may help improve your borrowing capacity and strengthen your loan application. Living … [Read more...] about Has your borrowing power changed?

Australia’s property market continues to adjust to higher interest rates, affordability pressures and ongoing economic uncertainty shaping conditions for buyers and homeowners alike. In many areas, conditions are becoming more favourable for buyers. Home values have eased, properties are taking longer to sell and auction activity is subdued, giving buyers more opportunity to negotiate.A recent KPMG report suggests housing conditions may remain subdued through the rest of 2026, forecasting a 1.1% decline in national house prices before a projected recovery in 2027. Unit markets are expected to prove more resilient, with prices forecast to continue rising over the next two years.Property investors are also navigating an evolving regulatory landscape. From 10 August, changes to SMSF borrowing rules will add a third clause to the definition on an acquirable asset. This means that only property that meets the definition of business real property is able to be financed through a loan within an SMSF.Existing arrangements on property contracts that were signed prior to 10 August 2026 will remain grandfathered, although there is some uncertainty as to how many lenders and loan products will remain in the space once the changes are in place. Furthermore, residential property will still be able to be purchased outright using cash reserves of the SMSF only.For those looking to buy this spring, having your finance in order is paramount. Chat to us now about organising pre-approval on your home loan. That way, you’ll be ready to jump in when you find your dream home or investment property. Interest rate news As widely expected, the Reserve Bank of Australia (RBA) has left the cash rate on hold at 4.35% at its latest meeting.Australia’s annual headline inflation rose 3.8% in the 12 months to June, down from 4% in the 12 months to May, while underlying inflation held steady at 3.6%.The softer-than-expected inflation data has many economists saying the cash rate may have peaked for the time being.Several economists now expect the RBA to leave the cash rate unchanged for the remainder of 2026; however, the timing and direction of the next move remain uncertain.If you’ve been with the same lender for some time, a home loan review can help you understand whether your current loan still aligns with your circumstances and objectives.ASIC has also recently highlighted offset account errors that have affected some borrowers. There are a couple of ways you can check that your offset account is linked correctly, depending on your lender:Via your banking app or internet bankingVia your statements (check whether your offset balance is reducing the amount used to calculate interest)By contacting your financial institutionIf you’re still unsure how you can check your offset account, your broker can help confirm that it is operating as intended.Get in touch if you’d like to review your current loan structure and ensure it’s still aligned with your … [Read more...] about Australian Property Market Update: Prices Decline and Buyer Conditions Improve

Few decisions have a bigger impact on your financial future than buying a property. Whether it’s your first home, your next home or an investment property, getting the finance right can make a significant difference for years to come. So why are more Australians choosing to work with a mortgage broker when making such an important financial decision? Broker market share has grown from 55% to 81% in just eight years, reflecting a growing preference for personalised guidance and support throughout the home loan journey.For many borrowers, having someone to help compare options, explain the fine print and advocate on their behalf provides confidence during what can otherwise be a complex process.Let’s take a look at some of the reasons mortgage brokers continue to grow in popularity. Optimise borrowing capacity Every borrower is different, which means there is no one-size-fits-all approach to finance. What works for one person may not be the right fit for another.A mortgage broker can help you understand your borrowing capacity and explain how different lenders might assess your circumstances. Having someone guide you through those options can help you better understand how different lending solutions could align with your current needs and longer-term goals. Navigate complex lending Today’s lending environment is more complex than ever. Borrowers are navigating changing interest rates, evolving lender policies and a property market that continues to shift.That’s where a mortgage broker can make a real difference. Rather than trying to compare countless loan options on your own, you have someone in your corner to explain your choices, help you find a suitable loan and guide you through the process with confidence.While we take care of the research, lender comparisons and paperwork behind the scenes, you can focus on the exciting parts of your property journey. Access to many lenders When you’re making such a significant financial commitment, it’s natural to want confidence that you’ve explored your options.Rather than being limited to a single lender’s products, a mortgage broker can compare loans from a range of lenders and help explain the differences between them. This can make it easier to understand the choices available and identify options that may be suitable for your circumstances and future plans. Legal protection Trust is an important part of any professional relationship, particularly when it involves one of life’s biggest financial decisions.That’s why mortgage brokers are subject to the Best Interests Duty, which requires them to act in their clients’ best interests when providing credit assistance.For borrowers, it’s an additional layer of reassurance that the recommendations they receive are designed to support their individual circumstances and objectives.Ready to get started?Buying a property is a major financial milestone, and many borrowers value having a trusted … [Read more...] about Why more than 8 in 10 borrowers are choosing mortgage brokers

Renovating an investment property can help attract quality tenants, improve rental returns and potentially add value to your property. But before choosing paint colours or collecting quotes, it’s worth understanding how you’ll fund the project. Many investors focus on the renovation itself and overlook the impact their funding choice can have on cash flow, borrowing capacity and long-term costs. The good news is that there are several ways to finance a renovation, from accessing equity to topping up an existing home loan. Here’s what you should know before getting started. Personal loan Say you want to perform a few cosmetic enhancements. Nothing too major – just a paint job, maybe some new window dressings and/or flooring.For a small project, a personal loan might be worth considering. Unsecured personal loans don’t use your property as security, and loan amounts and repayment terms are generally set at the time the loan is established.However, interest rates are often higher than those available on home loans, and loan terms are generally shorter. This could mean that repaying the loan within one to seven years could cause higher monthly bills. Refinancing If your property’s value has increased or you’ve paid down your mortgage somewhat, you may be able to refinance and use the equity to fund your renovation. Equity is the difference between the current market value of your property and what you owe on your mortgage.The perk with this option is that the interest rates are lower than for personal loans. If you’re undertaking a major renovation, it could be worth exploring refinancing, but keep in mind you’ll be adding more debt to your mortgage. Top-up loan Another option is to top-up your loan in order to fund your reno. A top-up loan is an extension of your existing mortgage that allows you to borrow extra money (without opening a whole new loan). Lenders usually add the new funds to your loan balance.Like the refinancing option, this allows you to access lower interest rates than a personal loan or credit card. You will likely not have to pay setup fees that come with getting a new loan, and the approval process is generally different from that of a complete refinance.It’s important to remember that lenders will usually only let you borrow up to 80% of your property’s value. If you exceed that, you might be up for lenders’ mortgage insurance. Also, because you’re spreading the renovation cost over the life of the loan, you might end up paying more in interest in the long run. Construction loan For larger projects like structural changes to your property, you might consider a construction loan. With this type of finance, the lender releases money to you in stages as your builder reaches milestones.Depending on the loan structure, you may only pay interest on the funds that have been drawn and many lenders offer interest-only payments. This could help you manage cashflow during the … [Read more...] about Planning an investment property renovation? Here are your finance options

After years of fierce competition, fast-rising prices and crowded auction weekends, the market is beginning to show signs of a shift. More properties are being listed for sale, homes are taking longer to sell, and buyers are becoming increasingly selective about what they’re willing to pay. One of the clearest signs of this changing market can be seen in auction clearance rates. Nationwide, fewer properties are selling under the hammer, with clearance rates recently dipping below 50%. In Sydney and Melbourne, auction success rates have dropped to their lowest levels in years.While this may sound like bad news for sellers, it could create opportunities for buyers. A softer market can mean less competition, more room to negotiate and a greater chance of finding the right property without feeling pressured to act quickly.So, what’s driving the decline in auction clearance rates, and what could it mean if you’re looking to buy? Federal Budget tax changes In the recent Federal Budget, the Government announced it would reform negative gearing and capital gains tax (CGT). These measures are now law.Under the changes, which will apply from 1 July 2027, negative gearing for residential property investments will generally be limited to new builds. The 50% CGT discount for individuals, trusts and partnerships will also be replaced with cost base indexation and a 30% minimum tax rate on capital gains.Existing investments held at 7:30pm AEST on 12 May 2026 will generally be exempt from the negative gearing changes, and CGT reforms applying only to gains that accrue after 1 July 2027.These changes have cooled investor demand, with many putting their purchasing plans on ice. This in turn has impacted auction activity. Cautious buyers and differing expectations Changing market conditions have seen buyer demand soften, with many purchasers taking a more measured approach and spending longer evaluating their options. At the same time, some sellers are still adjusting their expectations to the current market environment, creating a wider gap between buyers’ and sellers’ expectations.This gap in expectations is also influencing auction results. With buyers approaching the market more cautiously and auction clearance rates falling, some properties are not reaching their reserve price and are being passed in on auction day before moving to private negotiations. Interest rate hikes Since the beginning of this year, we’ve seen the cash rate increase three times. Lenders have, in turn, increased their interest rates, which reduces the amount buyers can borrow.Rising interest rates affect auction activity by tightening buyer budgets and impacting consumer confidence. With fewer eager buyers competing for properties, vendors might struggle to reach their reserve price, resulting in a property being passed in. How do the falling auction clearance rates affect buyers? A cooling property market can create more … [Read more...] about What’s driving the drop in auction clearance rates?

Australia’s property market is entering a new phase, and many buyers may be looking to better understand the opportunities and challenges that come with changing market conditions. With buyers increasingly taking their time to purchase and becoming more selective, properties are no longer being snapped up at lightning speed in many markets. Buyers are negotiating harder and walking away if the asking price is not in line with current market expectations.Recent tax reforms in the Federal Budget have also caused many investors to reassess their purchasing plans and strategies. Sellers are having to adjust their price expectations and adapt to the changing conditions, too.If you’re looking to buy a home or investment property, talk to us about your finance options. We’ll explain your borrowing power and organise pre-approval. Interest rate news With economists and banks not aligned on where the market is heading, the Reserve Bank of Australia (RBA) has decided to leave the cash rate on hold at 4.35% at its June meeting. This follows three consecutive rate hikes so far this year.While headline inflation has eased, underlying inflation remains elevated.Annual inflation dropped to 4% in the 12 months to May, largely driven by a decline in fuel prices, which were nearly 12% lower in May.In contrast, underlying inflation remained more persistent, with the RBA’s preferred trimmed mean measure increasing to 3.6%, up from 3.4% in April.Treasurer Jim Chalmers welcomed the lower headline inflation rate, but said his government was not “complacent” about the risks.“We know that there are still inflationary pressures in our economy. But these numbers today are much better than the market expected, much better than forecast, and that’s obviously a very good thing,” the treasurer said.The RBA said the three rate hikes appeared to be having “broadly the expected effect”, as international economic pressures ease.“It would take some time to assess the ultimate impact on the economy of the tightening in monetary policy since February but, at this stage, it appeared to be having broadly the expected effect,” the last RBA Board meeting minutes said.“Housing demand had eased, which also reflected the broader economic environment and recently proposed tax changes.”The next cash rate decision will be on August 11. Economists and major lenders are divided on the likely path for the upcoming interest rates, as global and domestic factors continue to shape an increasingly unpredictable economic environment. Home value movements The latest housing market figures show the downturn is deepening. National dwelling values dropped 0.4% in June according to Cotality, marking the largest month-on-month fall since December 2022.Sydney’s prices fell 1.2%, Melbourne’s dropped 1%, and Canberra’s were down 0.6%. Adelaide’s prices remained flat, while Brisbane saw modest gains. Hobart and Perth’s values increased 0.6% and 0.7% respectively.The June quarter … [Read more...] about Australia’s Property Market Update: What Buyers Need to Know