The Budget: A seismic shock to residential property

The Federal Budget may prove to be one of the biggest structural shifts in residential property many Australians have seen.

Nothing has been made law yet, and we are still around two years away from the next election, but the direction is clear enough that every property strategy now needs to be reassessed.

The biggest changes we see are:

• A greater premium on quality owner-occupier assets.
• More pressure on investor-driven stock and investor-heavy markets.
• A rise in first-home buyer activity.
• A major rethink of rentvesting strategies.
• More focus on upgrading, renovating and building wealth through the family home.
• A bigger role for share investing, dollar-cost averaging and debt recycling.
• A possible bank refinance war, as lenders look to keep growing loan books while investment lending slows.

Banks have also materially changed borrowing capacity, which means many old pre-approvals, upgrade plans and investment strategies may no longer make sense.

At Alcove, we have always focused on helping clients buy good assets, particularly property driven by long-term owner-occupier demand, while avoiding investor-driven stock and speculative markets. We believe those investor-led parts of the market are likely to face the greatest challenge after these changes.

If you own an investment property, are thinking about buying one, are already pre-approved, or have been putting off upgrading, we strongly recommend booking a call with the team so we can redo your numbers and reassess your strategy.

We will share a deeper update next week as more detail becomes clear. In the meantime, you can read the official Federal Budget information here, and listen to our recent episodes on The Australian Property Podcast and First Home Unlocked for our early thoughts.