Queensland homeowners have been warned to brace for the state’s first major property downturn in years, with one leading analyst predicting Labor’s tax crackdown on investors could trigger a housing correction lasting until 2029.
SQM Research founder Louis Christopher said the state was more exposed than any other to the federal government’s negative gearing and capital gains tax changes because of its reliance on investors — particularly across South East Queensland and the coastal growth corridors.
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Asking prices for houses in Brisbane are starting to fall, according to SQM Research. Picture: John Gass.
As data reveals asking prices across Brisbane have started to fall, Mr Christopher predicts home prices could drop and rents continue to climb as the market adjusts to the loss of tax incentives, with the fallout potentially lasting two to three years.
Until now, few commentators have dared to say Queensland’s booming property market was actually facing a correction.
“Arguably, the state is a little more susceptible to the property taxation changes brought in by the federal government,” Mr Christopher said.
| SQM Research Weekly Asking Prices Index | |||||||||
| Week ending | ($) | Change on prev week($) | Rolling month % change | Rolling quarter % change | 12 month % change | 3 year %(pa) change | 7 year %(pa) change | 10 year %(pa) change | |
| 23-Jun-26 | |||||||||
| Brisbane | All Houses | 1,393.09 | -8.918 | -1.10% | -3.60% | 11.40% | 13.10% | 12.30% | 9.00% |
| 3 Beds Houses | 1,168.48 | 0.874 | -1.90% | -4.10% | 12.90% | 12.50% | 11.80% | 8.30% | |
| All Units | 881.077 | -4.027 | -1.80% | -0.80% | 20.20% | 18.70% | 13.10% | 8.80% | |
| 2 Beds Units | 814.032 | -1.732 | -1.40% | 0.70% | 16.60% | 16.30% | 12.50% | 8.30% | |
| Combined | 1,263.43 | -7.68 | -1.30% | -3.20% | 12.80% | 13.90% | 12.30% | 8.90% | |
“With the loss of the negative gearing and the CGT discounts, property investors will be demanding a higher rental yield to compensate them for these losses of tax benefits.
“Once rental yields are higher from current levels, which will occur via housing prices falls and rising rents, investors will then have interest in the market once more and invest. But this is going to take some time for this adjustment in the market to work its way through.”
Presuming interest rates stay at current levels, Mr Christopher said that “adjustment period” could last for “two to three years”.
A leading property analyst predicts parts of Queensland could be heading for a 2-3 year market correction. Picture: Richard Walker.
Mr Christopher said asking prices were one of the clearest indicators of where the market was heading, and SQM Research’s charts showed Brisbane asking prices were “falling quickly”.
The data reveals that across Brisbane, asking prices for houses have dropped 1.1 per cent in the month since the federal budget was handed down, and nearly 2 per cent for units.
But the falls are more pronounced in Brisbane’s inner-ring, where asking prices for houses have dropped 6 per cent from a month ago.
On the Gold Coast, unit asking prices have dropped 6.7 per cent from a month ago.
And it could be just the beginning.
Mr Christopher said the market had suffered from “a series of shocks” that had not just scared off investors, but also owner-occupiers who were fearful about the outlook for interest rates and the economy.
Brisbane’s auction clearance rates have dropped to their lowest level since Covid. Picture: Debra Bela.
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“The first being the rate rise in February, keeping in mind expectations as recently as November 2025 were that interest rates would stay on hold in 2026 and be possibly cut,” he said.
“The second shock was the outbreak of the Middle East war, and with that, fear of steeply rising petrol prices. The third and fourth shocks were the additional rate rises, then the massive property taxation changes.
“When housing prices fall, few people want to catch a falling knife, particularly when there is no perceived relief on the horizon.”
Louis Christopher, founder of SQM Research.
Along with asking prices, another leading indicator of home value growth is auction clearance rates, which have dropped markedly over the past month.
Brisbane’s auction clearance rate for the week ending June 21 was the lowest of the capital cities at 34 per cent — well below the combined capital city success rate of 43 per cent.
Co-founder of agent comparison site, bRight Agent, Aaron Scott said selling a home had suddenly become “an acute pain point” for vulnerable homeowners.
“In a sub-50 per cent clearance market, properties are staying on the market longer, and passing a property in at auction is a stressful, costly exercise for everyone involved,” Mr Scott said.
“There could be a lot of pain to come for those who have purchased recently if house prices continue to fall.”
Aaron and Angelina Scott of bRight Agent.
The first tranche of the federal government’s tax changes passed parliament this week, after Labor struck a deal with the Greens.
Mr Scott said the uncertainty in the market was due to a combination of poor market sentiment and policy uncertainty — not just winter seasonality.
“What we are seeing isn’t just a standard winter slowdown,” he said. “While seasonal factors always play a part in June, the real driver here is a severe crisis of confidence.
“The persistent uncertainty surrounding the federal government’s planned changes to negative gearing and CGT has paralysed the market.
“Buyers are terrified of overpaying into a shifting regulatory landscape, and bidding has grown incredibly thin.”
A low clearance rate is fundamentally a mismatch between vendor and buyer pricing expectations
auction clearance rates have historically been among the strongest leading indicators of dwelling value growth. Therefore, the collapse in auction clearance rates is a very bearish signal for home prices.
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