If you’ve felt like the ground has shifted under Australian property investing in the last few weeks, you’re not imagining it. Between Canberra and the Reserve Bank, investors have had a lot thrown at them in a short space of time. So, let’s talk about what is actually happening, what it means for you, and why this may be a moment to lean in, rather than sit on your hands.
First, the headline changes. On 23 June, the Federal Government struck a deal with the Greens to permanently ban new limited recourse borrowing arrangements (LRBAs) for residential property inside SMSFs. The bill has now passed both houses of Parliament. If you already have an LRBA in place, nothing changes. You’re fully grandfathered. The same goes if you exchange contracts before the ban commences, roughly 45 days after Royal Assent, which puts the real deadline around the 10th of August. After that, the door closes on borrowing inside super to buy residential property, full stop. Commercial and business real property are untouched.
Layer on top of that the negative gearing and CGT reforms from May’s Federal Budget. From 1 July 2027, the 50% CGT discount is being replaced with cost base indexation and a 30% minimum tax on gains. Negative gearing on established homes bought after Budget night will only offset rental income, not your wage. New builds are exempt from both of these changes, where investors can keep the choice of the old discount or the new rules. If you already own your investment property, you are grandfathered under the current settings until you sell.
Here’s what this means. The clearest, simplest reading of all of this is: the window to act under the current, more favourable rules is closing, and new builds are being treated noticeably better than established stock going forward. If an SMSF property strategy has been on your radar, the next six to eight weeks matter more than the next six to eight months. And if you’re weighing established versus new outside super, the tax settings are now genuinely tilted toward new.
Now, the market itself. The data confirms that this is not a market in freefall. It is a market sorting itself into winners and laggards. The RBA held the cash rate at 4.35% this month after three hikes earlier in the year, and most economists now expect rates to plateau or even ease into 2027. Nationally, dwelling values were flat in May. Sydney and Melbourne are down 2.1% and 3.2% from their November peaks. But Perth is up 25.8% over the past year, Darwin 20.3%, and Brisbane and Adelaide are still climbing. Regional markets are holding up well too.
And here’s the figure that matters most for anyone weighing it up: rental vacancy is sitting at a record-low 1.5%, with annual rent growth at 5.9%. That’s pushing gross yields to their best level in a year. Tight supply isn’t going anywhere. Undersupply of new builds, population growth and a resilient jobs market are all still in the mix. This is exactly the kind of environment where being selective, not sitting out, makes the difference.
So what should you do? None of this is a reason to panic, and it’s not a reason to wait around hoping for things to go back to how they were. It’s a reason to get specific. Specific about structure, about timing, about whether new or established makes more sense for your numbers, about whether your existing SMSF strategy needs revisiting before mid-August. The investors who do well from here won’t be the ones who reacted fastest. They’ll be the ones who got proper advice before the rules locked in.
And if you need a reminder that property comes good on the other side of disruption, we’ve been here before. Through the GFC, plenty of people were convinced the market had broken for good. Through COVID, the predictions were just as dire, empty CBDs, collapsing prices, a generation locked out for good. In both cases, property didn’t just recover, it went on to set new records. Policy settings change, rates move, headlines get louder than the facts deserve, but the fundamentals of an undersupplied, growing country don’t disappear. The investors who stayed engaged through those periods, rather than stepping back, were the ones best placed when conditions turned.
This is precisely where we come in. At YPP, we live this stuff every day. The legislation, the lending landscape, the city-by-city data. All so that you don’t have to decode it alone. Whether you’re sitting on an existing SMSF, thinking about your first investment property, or you are trying to work out if a new build stacks up better than established under the new CGT rules, now is the time to have that conversation.
COMING SOON! We’ve also recognised that affordability, finance and tax shouldn’t be standing between everyday Australians and a foothold in property. That’s why we’ve been quietly building something new. A fresh pathway designed to open the door for investors who’ve felt boxed out by rising entry costs, tighter lending, or the very policy shifts we’ve covered above. We’re putting the finishing touches on it now, with a planned launch in August, and we can’t wait to share more details with you soon.
In conclusion. Property has always rewarded the people who get educated, get advice, and get moving while everyone else is still reading the headlines. So, let’s build your tomorrow. Today.
For any questions about how these changes affect your situation specifically, reach out to the YPP team. We’re here to help you make sense of it and find the right path forward.