Federal Labor has moved to scrap negative gearing on existing homes and remove the 50% capital gains tax discount from July 1 2027. Those changes arrive despite strong pushback from the property industry and a noticeable softening in auction clearance rates.
Meriton, the country’s largest private apartment developer, reports a 20% jump in investor visits to its display centres alongside higher apartment sales over the weekend. Interest spans projects from Cypress Palms on the Gold Coast through to the Castle Grange development in Sydney’s Castle Hill.
Other major players are seeing the same pattern, suggesting investor attention is rotating towards new stock rather than exiting the market altogether. SRM Residential, which markets projects for multi billion dollar developer Iris Capital, is reporting a lift in enquiries for brand new one and two bedroom apartments specifically for negative gearing.
Several other well known groups, including Aland and Toohey Miller & Co, are also flagging stronger investor activity. One recent sale in the Queensgate development at Potts Point, an inner Sydney location, saw a one bedroom apartment change hands for about $2.5m over the weekend.
The early response indicates that Labor’s policy design is funnelling investor interest away from established housing and into new apartment supply. Developers interpret the weekend’s numbers as a sign that, rather than retreat, investors may crowd into compliant projects that still qualify for full tax benefits.
That dynamic could support construction pipelines in dense urban markets even as existing owners feel the pinch from reduced tax concessions. Market pricing for older properties and new builds is likely to diverge further as the 2027 deadline approaches.
