The government reckons it’s fixing housing. Kate’s not so sure.
The 2026 federal budget has a lot to say about property — negative gearing, CGT, pushing investors into new builds.
On paper it sounds reasonable. But when you look at how the market actually works? It starts to fall apart pretty quickly.
Kate breaks it all down covering what the policy actually does, why investors won’t just “redirect” to new builds, what happens to renters when supply dries up, and who ends up footing the bill.
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The Australian government thinks it is fixing housing.
It might be breaking it.
The twenty twenty six federal budget from the Australian Labor Party has been framed as a major step forward, improving housing affordability.
On paper, it might sound logical.
Reduce investor incentives, help first home buyers, push investment into new housing, improve fairness.
But when you look at how the property market actually works on the ground in real life, this policy starts to fall apart very quickly.
Hello, everyone.
I’m Kate Hill, and if you are ready to build real wealth through smart and no nonsense property decisions, you are absolutely in the right place.
Let’s get into it.
Today, I’m gonna give you my two cents worth on the latest federal budget announcement in relation to property investment, and I will try and keep it brief.
The core idea, investors are the problem.
The government’s position is simple.
Investors are out competing owner occupiers and pushing up prices.
So the solution, limit negative gearing, reduce CGT incentives, discourage investor demand in established housing.
Here’s the reality check, Investors can’t just pay more willy nilly.
Investors borrow money.
They are constrained by bank valuations.
They have to meet serviceability requirements.
They still need deals to actually make sense.
They don’t just turn up and pay whatever they want because if they do, the bank won’t lend.
The numbers won’t stack up.
The property becomes too expensive to hold.
Also, according to ABS lending indicators, first home buyers, new loan commitments rose nine point one percent in the year to December to be the highest volume of quarterly loans in the year.
This was the highest percentage growth across all buyer groups.
If you are finding my content helpful, please hit subscribe.
I share lots of strategies and insights to help you grow long term wealth through smart property investing.
Most investors in Australia are not wealthy speculators.
They are everyday Australians trying to build a future so that they don’t have to rely on government pension handouts.
The bigger myth, investors drive price growth.
Over the past few years, interest rates have been very high, borrowing capacity has been crushed, investor activity has been more limited, Yet prices still rose, what do you know?
Why is that?
Owner occupiers and supply shortages, not investors.
The dangerous assumption, investors will just redirect.
The government believes that investors will just simply shift into new builds.
In reality, most will not simply redirect.
They will step back entirely.
Why? Because there is construction risk, there is builder insolvency concerns, valuation uncertainty and holding cost blowouts.
Whether that is reality or not, often it’s not when done properly, that is what a lot of investors think.
The rental market problem no one’s talking about.
If investors step back, who supplies the rental properties?
Thirty percent of Australians rent, many by choice.
That rental supply is overwhelmingly provided by everyday investors.
If you reduce investor participation, fewer properties are added, supply tightens, and what’s gonna happen, the rents are gonna go up.
Owner occupiers will replace investors.
Well, not so fast.
Many young Australians, they want flexibility.
They want mobility.
They don’t want to be tied down.
Add to that increasing number of smaller households.
And what are you gonna get?
You get a growing cohort of intentional long term renters.
They still need housing.
What about the build to rent fantasy?
Institutional investors are not ready to replace mum and dad investors.
What about the retirement system no one’s talking about?
Australia relies on private property investment to supplement retirement income.
Discouraging investors means there will be fewer self funded retirees, greater pressure on the pension system, who is going to pay for all those pensions?
The real problem is of course supply.
The housing crisis is driven by a lack of land, very slow approvals, infrastructure delays and labour shortages.
This policy focuses too much on demand and not enough on supply.
What this policy is really doing, it is not just about making housing cheaper, it is about changing who owns it.
The likely outcome is that investors will step back, rental supply will tighten, rents will increase, pressure will build, and the policy will get revised as it happened before and it’s happening in New Zealand.
This is indeed a huge gamble and if the government are wrong renters will feel it the most even if they’re the ones this government is allegedly trying to help.
Thank you very much for watching everyone.
If you are serious about building real wealth through smart and well researched property decisions, stick around.
There is a lot here to support you on your journey and I will see you in the next video.
Bye.
The Australian government thinks it is fixing housing.
It might be breaking it.
The twenty twenty six federal budget from the Australian Labor Party has been framed as a major step forward, improving housing affordability.
On paper, it might sound logical.
Reduce investor incentives, help first home buyers, push investment into new housing, improve fairness.
But when you look at how the property market actually works on the ground in real life, this policy starts to fall apart very quickly.
Hello, everyone.
I’m Kate Hill, and if you are ready to build real wealth through smart and no nonsense property decisions, you are absolutely in the right place.
Let’s get into it.
Today, I’m gonna give you my two cents worth on the latest federal budget announcement in relation to property investment, and I will try and keep it brief.
The core idea, investors are the problem.
The government’s position is simple.
Investors are out competing owner occupiers and pushing up prices.
So the solution, limit negative gearing, reduce CGT incentives, discourage investor demand in established housing.
Here’s the reality check, Investors can’t just pay more willy nilly.
Investors borrow money.
They are constrained by bank valuations.
They have to meet serviceability requirements.
They still need deals to actually make sense.
They don’t just turn up and pay whatever they want because if they do, the bank won’t lend.
The numbers won’t stack up.
The property becomes too expensive to hold.
Also, according to ABS lending indicators, first home buyers, new loan commitments rose nine point one percent in the year to December to be the highest volume of quarterly loans in the year.
This was the highest percentage growth across all buyer groups.
If you are finding my content helpful, please hit subscribe.
I share lots of strategies and insights to help you grow long term wealth through smart property investing.
Most investors in Australia are not wealthy speculators.
They are everyday Australians trying to build a future so that they don’t have to rely on government pension handouts.
The bigger myth, investors drive price growth.
Over the past few years, interest rates have been very high, borrowing capacity has been crushed, investor activity has been more limited, Yet prices still rose, what do you know?
Why is that?
Owner occupiers and supply shortages, not investors.
The dangerous assumption, investors will just redirect.
The government believes that investors will just simply shift into new builds.
In reality, most will not simply redirect.
They will step back entirely.
Why? Because there is construction risk, there is builder insolvency concerns, valuation uncertainty and holding cost blowouts.
Whether that is reality or not, often it’s not when done properly, that is what a lot of investors think.
The rental market problem no one’s talking about.
If investors step back, who supplies the rental properties?
Thirty percent of Australians rent, many by choice.
That rental supply is overwhelmingly provided by everyday investors.
If you reduce investor participation, fewer properties are added, supply tightens, and what’s gonna happen, the rents are gonna go up.
Owner occupiers will replace investors.
Well, not so fast.
Many young Australians, they want flexibility.
They want mobility.
They don’t want to be tied down.
Add to that increasing number of smaller households.
And what are you gonna get?
You get a growing cohort of intentional long term renters.
They still need housing.
What about the build to rent fantasy?
Institutional investors are not ready to replace mum and dad investors.
What about the retirement system no one’s talking about?
Australia relies on private property investment to supplement retirement income.
Discouraging investors means there will be fewer self funded retirees, greater pressure on the pension system, who is going to pay for all those pensions?
The real problem is of course supply.
The housing crisis is driven by a lack of land, very slow approvals, infrastructure delays and labour shortages.
This policy focuses too much on demand and not enough on supply.
What this policy is really doing, it is not just about making housing cheaper, it is about changing who owns it.
The likely outcome is that investors will step back, rental supply will tighten, rents will increase, pressure will build, and the policy will get revised as it happened before and it’s happening in New Zealand.
This is indeed a huge gamble and if the government are wrong renters will feel it the most even if they’re the ones this government is allegedly trying to help.
Thank you very much for watching everyone.
If you are serious about building real wealth through smart and well researched property decisions, stick around.
There is a lot here to support you on your journey and I will see you in the next video.
Bye.
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