Sydneysider Bailey Robinson, 24, saved $80,000 while living rent-free with his parents in Sydney’s Northern Beaches, on one condition: save consistently or pay market rent.
Earlier this year, he purchased his first investment property, a townhouse in Melbourne.
Meanwhile, the median house price in his parents’ suburb has hit $2m.
Many first homebuyers opt to enter the property market via rentvesting like Mr Robinson, but federal budget changes to negative gearing could shut the door on many who were hoping to follow this path.
The government announced with the May federal budget that negative gearing tax concessions, which allow investors to claim their losses against their taxable income, will be restricted to new builds from mid-2027, with the benefit “grandfathered” for current landlords.
“A lot of the places around Sydney are just far too expensive and you don’t get enough out of it,” Mr Robinson said.
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Bailey Robinson 24 (middle) with his parents
Recent federal budget changes to negative gearing could mean other young Aussies hoping to enter the market via established dwellings might not be so lucky.
“CGT concessions and negative gearing were key wealth building tools for prior generations which have now been taken from young Australians,” Mr Robinson said.
“I recognise how lucky I am to be ‘Grandfathered’ in but this policy will still effect any future investments as it will hinder the capital growth of properties across Australia.
“I see this as a revenue raising measure marketed as a generational wealth solution, but with negative implications across the wider economy.
“Suppressing property demand by reducing investment confidence limits capital growth all in a supposed bid to make it ‘easier’ for first homebuyers, but having a ripple effect that discourages Australian business innovation, R&D and start-ups.”
Bailey and his mum Belinda
Mr Robinson is currently out of pocket $300 per week, his parents contributed $40,000 to his property payment.
With a plan to continue to build a property portfolio with the assistance of OpenCorp, Mr Robinson was on track for around five properties by age 35.
Now he is not as sure.
“I guess time will tell,” he said.
“With the whole strategy around building an investment portfolio being to leverage the built up equity through the growth in your properties year on year.
“A policy that will have an extensive impact on capital growth across numerous Australian markets, not only property, isn’t ideal.”
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Westwood Estate Fraser Rise where Bailey purchased his townhouse
Mr Robinson spotlighted the difficulty in the current market to purchase a first property.
“Anything beneficial will come with sacrifice, particularly with rentvesting and the current cost … people’s ability to save is greatly reduced,” he said.
“That’s why it’s so important to start earlier rather than later, something both my younger brother and I have tried to do.”
OpenCorp Executive Director Michael Beresford said the investors who will feel the federal budget changes the most are those who were planning to buy established property going forward.
“An investment that might have cost a couple of hundred dollars a week to hold could now cost closer to $700 a week in an established property,” he said.
“That is a significant shift.
“For younger investors coming to the market fresh, without a prior strategy locked in, this is actually a moment of clarity. The government has told you exactly where it wants investment to go. Work with that, not against it.”
Michael Beresford
He added this will point young Aussies already thinking about rentvesting in “a clearer direction than before”.
“From 1 July 2027, negative gearing will only be available on new property which aligns well with how smart rentvestors should be thinking anyway,” he said.
“You are not buying with your heart, you are buying with your head.”
Mr Beresford said the changes make it even more important to buy the right new property in the right location.
“Not every new property is a good investment,” he said. “That has always been true.
“But if you are a young person who was already open to rentvesting, the message from government is clear: we want more new supply, and the tax system will reward you for contributing to that.”
Mr Beresford said the bigger risk for young Aussies is inaction.
“Waiting to understand the rules, waiting to save more, waiting for the right time, all of that waiting will mean a bigger deposit gap and fewer options down the track,” he said.
“The entry point into the market is never as affordable as it is today.
“Negative gearing still exists. CGT concessions still exist, they are just being redirected toward new supply, which is where the country desperately needs investment.”
Cam McLellan
With many younger Aussies struggling to enter the market, Cam McLellan CEO of OpenCorp said although some kids are great at saving, parents helping to get them to purchase property sooner will save them extra deposit as prices continue to climb.
“The gap between the have and have nots is growing and that’s the reality of Australia as opposed to what’s good or bad about it,” he said.
“It gets the kids started in the property market and I always say it’s okay to give your kids enough to get started, just not enough they don’t have to do anything themselves.”
Mr McLellan has four kids of his own, his eldest 18 and youngest is 10, purchasing one investment home he plans to divide for their home deposits.
“Instead of saying we’re going to have to help four kids out with a deposit, I bought a property about four or five years ago, and we put $200,000 in for one deposit,” he said.
“We’ll let that double in value and I’ll draw the equity out, and that will be the kids’ deposits sorted.”
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