Investor pullback as rate hikes and tax changes bite

Property investors across the country have been hitting the brakes as interest rate hikes and proposed tax changes cool the market, with investment plunging 9 per cent in the June quarter, according to a report released today. The latest realestate.com.au Terri Scheer Investor Report found investor activity had seen a pullback this year, following strong growth in 2024 and 2025. The May federal budget announcement of changes to the capital gains tax discount and negative gearing for established rental properties influenced the decline in investor loans along with the RBA rate hikes, realestate.com.au Senior Economist Angus Moore said. “Over the long term, the budget changes may lead to a shift in investor demand, as investors look towards properties with higher yields,” he said. “Low-yielding and loss-making rental properties are likely to become less attractive to investors, as negative gearing will be no longer available for existing residential properties. “Although, rental market conditions remain tight and rent prices have continued to rise, as home prices have softened, which is likely to support investor activity over the next year.” Changes to the capital gains tax discount...