Young Queenslanders desperate to break into the property market may finally face less competition from investors under the federal government’s sweeping tax reforms — but industry leaders warn the changes could ultimately leave first homebuyers worse off.
Supporters argue the reforms, announced in this week’s federal budget, could open the door for more first homebuyers by discouraging investors from competing for established homes, but critics say they risk driving rents and home prices even higher.
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The warning comes as new research reveals young people are refusing to give up on home ownership, despite soaring property prices, rising interest rates and mounting living costs.
A Loan Market Australia survey found nearly 70 per cent of Gen Z and Millennials believed owning property was critical to financial success, challenging growing claims they are abandoning the dream altogether.
Instead, experts say many are simply changing strategy — turning to smaller homes, outer suburbs, rentvesting and family support to get a foothold in the market.
A new survey shows Gen Z and Millennials are still determined to own a property, despite higher interest rates, house prices, and living costs.
Real Estate Buyers Agents Association of Australia president Melinda Jennison said the federal government’s tax changes could make it easier for some first-home buyers if investor competition eased.
But she warned the reforms would hurt younger Queenslanders relying on rentvesting to build equity.
“Many first homebuyers live in locations that they simply cannot afford to buy in, so under the old scheme, those people always had the opportunity to build additional equity by rentvesting in a more affordable market,” she said.
“We’ve seen many instances where they will later sell that investment and use the proceeds to purchase their home in the location they work, so that segment really will be impacted by these changes.”
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Real Estate Institute of Queensland (REIQ) CEO Antonia Mercorella said the reforms would do little to improve affordability or help aspiring homeowners.
A new survey has found nearly half of all Queenslanders believe property is the best investment in Australia for building wealth.
“These reforms promise desperately needed pathways to home ownership, but in reality, they will only create a mere 7,500 new homeowners per year over the next decade across Australia,” Ms Mercorella said.
“The cessation of negative gearing for established homes coupled with potentially less generous capital gains tax discounts, will almost certainly drive-up rents.
“This will only diminish the saving power of aspiring first homeowners already scrimping and saving to get their first foot on the property ladder.”
Great Southern Bank chief customer officer Rolf Stromsoe.
Fresh figures from Great Southern Bank show affordability pressures are already intensifying in Queensland, with nearly half of aspiring first-home buyers identifying rising house prices as one of the biggest barriers to entering the market, while 53 per cent said saving a deposit remained one of the toughest challenges.
The bank’s research also found Gen Z buyers were 50 per cent more likely than the average Australian to consider rentvesting as a pathway into the market.
Ms Mercorella said the idea fewer investors would automatically create more first-home buyers was flawed.
“That’s an overly simplistic argument that negates the uncomfortable reality that price affordability — and the ability to save upfront deposits and costs and secure a mortgage — is actually what’s standing in their way,” she said.
A Loan Market Australia spokesperson said younger buyers still believed home ownership was achievable despite worsening affordability pressures.
“Despite the headlines about affordability, young Australians still see property as a key wealth-building tool,” a spokesperson said.
“While they face a lot of challenges, they understand that achieving home ownership now requires a more strategic approach than simply relying on salary alone.”
Great Southern Bank chief customer officer Rolf Stromsoe said younger Australians were adapting rather than abandoning the dream of home ownership.
“Younger Australians remain determined to own a home despite facing pressures around affordability,” Mr Stromsoe said.
“What’s changing is how they get there. We’re seeing a more creative and pragmatic approach — whether that’s rentvesting, adjusting lifestyle expectations, taking on longer home loan terms to enter the market sooner, or leaning on family support through guarantor arrangements.
“Rather than opting out, younger buyers are reshaping their path to stay in the game.”
REIQ CEO Antonia Mercorella. Picture: Liam Kidston.
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