Property Investment After the 2026 Budget: Why New Builds May Be Back in Focus

The 2026 Federal Budget changed the conversation for Australian property investors.

For years, the familiar strategy looked the same: buy an established property, claim rental losses where eligible, hold for the long term and wait for capital growth. That approach won’t disappear overnight, especially for existing investments that have been grandfathered. But the direction of travel is clear. The tax system is now being reshaped to encourage investment into new housing supply.

That doesn’t mean property investing is finished. It means the rules have shifted, and the investors who do well from here will likely be the ones who get more selective about the type of property they buy and how they fund it.

One thing to be upfront about: Go Mortgage doesn’t provide property investment advice, tax advice or financial planning advice. We look at borrowing capacity, loan structure, lender selection, equity release, investment lending, SMSF lending and refinance options, and getting them right has rarely mattered more than it does now.

Demand is Still Strong. Supply is Still the Problem.

The Budget may have adjusted the tax settings, but it hasn’t touched the fundamentals of the housing market.

Australia still has a serious housing shortage. Population growth, migration, smaller household sizes and a run of below-target completions continue to prop up long-term demand for homes. Opteon’s July 2026 residential development commentary described a market shaped by acute undersupply and strong demographic demand, with new completions still lagging government targets.

That’s the part policy can’t fix quickly. A Budget can nudge investor behaviour, but it can’t conjure enough homes out of thin air. Not every property, suburb or development will perform. But quality property held over the medium to long term should still produce solid results, because the underlying supply and demand imbalance is very real.

What Actually Changed in the 2026 Budget

The Budget introduced major reforms to negative gearing and capital gains tax.

Negative gearing on residential property will generally be limited to new builds. Existing investments made before 7:30pm AEST on 12 May 2026 have been grandfathered under the new arrangements. In practice, that gives new residential property a stronger policy tailwind, and Treasury has said the point of the change is to direct tax support towards new housing supply.

Capital gains tax is changing too. From 1 July 2027, the current 50% CGT discount will be replaced for many investors with cost base indexation and a minimum 30% tax rate on capital gains. Investors in new builds, though, can choose either the existing 50% discount or the new inflation-based arrangements, depending on their circumstances. That option is a big reason new property deserves a fresh look.

Why New Builds May Be More Attractive Now

The Budget has effectively put new housing under a spotlight. For investors, a new build may offer a few advantages worth weighing up:

• Negative gearing still applies to new residential property.
• New builds also qualify for full depreciation, which adds to the negative gearing benefit. (You can read more on the difference in depreciation on new versus older homes.)
• Investors in new builds can choose between the existing 50% CGT discount and the new inflation-based CGT rules.
• Newer homes tend to appeal to tenants after modern layouts, energy efficiency and low maintenance.
• New housing adds directly to supply, which is exactly where government policy is trying to steer investor money.

None of this makes every new build a good investment. It does mean the gap between a new and an established property is now real when it comes to cash flow and after-tax returns.

The “Missing Middle” Opportunity

One of the more useful points in Opteon’s report is the growing demand for medium-density housing, especially townhouses. Opteon calls townhouses the “missing middle”: the segment families reach for when they’ve been priced out of detached homes but still want more space than an apartment offers.

That’s an important theme for investors. Detached houses in strong capital-city locations keep getting more expensive. High-rise apartments can carry their own risks around oversupply, body corporate costs and investor-heavy ownership. Townhouses, duplexes and smaller boutique developments often sit comfortably in between: more affordable than a house, more liveable than many apartments, and attractive to renters and owner-occupiers alike.

For South East Queensland, that matters. Opteon identified Brisbane as a strong outperformer, supported by interstate migration and Olympic tailwinds. The report focuses on Brisbane rather than the Gold Coast specifically, but many of the same forces apply across the region: population growth, infrastructure investment, lifestyle migration and limited well-located land.

What About the Gold Coast and South East Queensland?

We’re positive on the Gold Coast and South East Queensland, but selective.

The region still has a lot going for it: population growth, interstate migration, limited developable land, major infrastructure spending, Olympic momentum, strong lifestyle appeal and tight rental markets in many pockets.

The caution is around what you actually buy. A well-located townhouse, a quality new home or a land-rich block in a growth corridor is a very different proposition from a generic investor-grade apartment in a tower where hundreds of near-identical units compete for the same tenants. The goal is to buy something that stacks up on location and tenant demand, funded with a structure you can sustain. If your plan also involves upgrading your own home or buying your next property alongside an investment, the order you do things in can change your borrowing position.

Regional Queensland May Deserve a Look Too

Another area worth watching is quality regional Queensland. Markets like Rockhampton, Toowoomba, Bundaberg and parts of Ipswich, along with other established regional growth corridors, can offer a different kind of opportunity: lower entry prices, stronger rental yields, more land content and less reliance on a big borrowing capacity, often underpinned by local employment and infrastructure spending.

This isn’t a blanket recommendation. Some regional markets are volatile, so it pays to understand employment diversity, vacancy rates, local supply pipelines, insurance costs, tenant demand and resale depth before committing. For the right borrower, though, quality regional new housing can strike a good balance between affordability, cash flow and long-term growth.

The Finance Strategy Matters More Than Ever

In this new environment, the way you structure your finances isn’t an afterthought. It can be the difference between an investment that quietly does its job and one that keeps you up at night.

Before buying, it’s worth getting clear on a few things: how much you can borrow, how the new repayments will sit against your household cash flow, whether to draw on the equity in your home, whether the loan should be interest-only or principal and interest, whether an offset account makes sense, and how big a buffer you need if rates or vacancies move against you. The most important question of all is whether you could hold the property without relying on the tax outcome.

This is where a good mortgage broker earns their keep. Start by getting a realistic number: our mortgage repayment calculator shows roughly what a loan might cost each month, and if you’re weighing up an offset account, the offset calculator shows how your everyday savings could cut the interest you pay.

From there, the structure questions get more specific:

• Many investors fund a purchase by using the equity in their home rather than putting down cash.
• If your current loan isn’t pulling its weight, refinancing before you take on more debt can free up borrowing power.
• Buying through your super fund is a different path again, and SMSF lending comes with its own rules and a shorter lender list.

Our job at Go Mortgage is to help you compare lender policies, structure an investment loan properly, and make sure you understand what a contract means for your finances before you sign it.

A New Build Isn’t Automatically a Low-Risk Build

It’s worth being honest here. New builds can be attractive, but they come with their own risks. Construction delays can push out your settlement date. Valuations sometimes land below the contract price. Rental estimates can be optimistic. And builder quality varies more than the glossy brochures suggest.

That’s why tax treatment shouldn’t be the reason you buy. Tax can help a deal; it shouldn’t be the deal. The fundamentals still decide the outcome: location, scarcity, tenant demand, cash flow, build quality and whether you can comfortably hold the property for the long haul.

If you’re buying a new build before your existing home has sold, it’s also worth understanding how a bridging loan works, so a delayed settlement doesn’t catch you short.

So, Should You Invest After the 2026 Budget?

For a lot of Australians, the answer is still yes, just with a sharper filter.

The Budget hasn’t removed the case for property investment. It’s changed where the incentives sit. The themes that stand out now are new housing supply, townhouses and medium-density homes, quality new builds in growth corridors, well-located South East Queensland property, sensibly priced regional Queensland opportunities and smarter loan structuring.

The investors likely to do best aren’t the ones chasing the cheapest property or the biggest deduction. They’re the ones buying quality assets they can afford to hold.

Our View

We’re optimistic, for a simple reason: Australia still needs more homes. Population growth keeps supporting demand, and supply remains hard to deliver. For the right borrower, with the right advice and a sound finance structure, property investment is still one of the more reliable ways to build wealth over time. It just has to be done properly.

Before you sign a contract, talk to your accountant about the tax and talk to a mortgage broker about the finance. At Go Mortgage we can help you work out your borrowing capacity, review your equity position, compare investment loan options and structure your finance so you can make a more informed decision.

If you’re thinking about investing after the 2026 Budget, it’s a good time to review your options. Book a discovery meeting with our Gold Coast mortgage broking team and let’s look at what’s possible.

FAQ