First Home Buyers, Upgraders and Investors: What Should You Actually Do Post-Budget?

Since the Federal Budget landed, Chris Bates says he's fielded the same question on repeat. "Every day since the Budget, someone has asked me the same thing: so, what should we actually do?" he says. People understand the new negative gearing and CGT rules on paper. What they don't have is a framework for applying them to their own situation.

That framework, Bates argues, starts by throwing out the idea of a single national property market. "There is no national property market. There's no Sydney housing market. There's not even a single northern beaches market," he says, pointing to the divergence since 2019: Perth up 137%, Brisbane around 130%, Adelaide 120%, against Sydney's 65% and Melbourne's 31% — and that's before you get down to individual suburbs, streets, and even blocks. From there, what you should actually do post-Budget comes down to which of four groups you fall into: first-home buyer, upgrader, current investor, or future investor.

First-home buyers: the door has opened, but don't buy just to escape renting

Bates's biggest concern for first-home buyers isn't the Budget — it's the reasoning that leads people into the wrong purchase. He describes the common trap of an early-30s couple, tired of rising rent and pressure from family, who buy a unit near the city simply because it's what they can afford. "The problem," he says, "is that they are solving the wrong problem." Getting out of renting matters for security, but the home they have bought fits their life today, often not tomorrow.

His reframe: "Is buying a property both a good life and a good financial decision?" For Bates, that second half isn't optional. "It must be a good investment," he says. "If prices don't rise, you haven't just not made money. You've wasted a big chance on the wrong property." Working through that question properly, ideally with a mortgage broker first home buyer clients trust to stress-test the numbers rather than just the rate, is what separates a genuine step forward from a stopgap.

Where the Budget does shift the picture, in his view, is competition. "Post-Budget, investor demand for established homes will collapse, meaning owner-occupiers are the main buyers and set prices," Bates says. "The Budget has opened the door for first home buyers." For buyers who've spent years being outbid by investors at auction, he says that's a real opportunity worth weighing up — provided the underlying asset is right for the next five to ten years, not chosen purely to stop renting. Getting that first home loan structured properly from day one, rather than just chasing the cheapest rate on a first home buyer home loan, is where he says the real long-term saving sits.

Upgraders: the equity gap has narrowed, but so has your patience

Bates is most concerned about upgraders right now — homeowners who know their place won't fit the next ten to fifteen years but have kept putting the decision off. He frames it as two paths: stay and renovate if the numbers and lifestyle stack up, or accept that no renovation fixes a block that's genuinely too small or badly located.

If staying works, he says it's usually the cleanest answer — but funding that renovation properly often starts with restructuring what you already owe. A refinance home loan that unlocks existing equity can be a far more efficient way to fund the build than raiding savings or taking on a separate personal loan, and getting that structure sorted before the tradespeople are booked avoids a scramble later.

For those who can't stay, Bates reframes the whole question: "The question isn't, is now a good time to move? It's, can I realistically grow into this home for the next 10 to 15 years?" He's candid about the psychology of selling in a soft market too: "When you sell in uncertain times, you also buy in them," he says. "You have to accept that you won't get the perfect price for your place. But you're not just selling, you're buying... What matters is the gap between the two, not the price on either one." In Sydney and Melbourne specifically, he argues that gap has swung in upgraders' favour: "the upgrade gap is the most favourable since 2021," he says, because the top end has softened more than the middle of the market. Knowing when to refinance — locking in the right loan structure before you list, rather than after an offer is already on the table — is, in his view, one of the most overlooked parts of getting an upgrade right.

Current investors: stop telling yourself a story about "the plan"

For investors who already hold property, Bates's message is blunt: existing loans are grandfathered, so negative gearing on them doesn't change. But being allowed to keep negative gearing isn't the same as it still being the right call. "Buy and hold isn't a strategy," he says. "It's a story investors tell themselves."

His test: "Would you buy this exact property again at today's price if you were starting fresh? And if not, what's your alternative?" He walks through what those alternatives can look like once an investor is weighing them honestly — paying down debt, topping up superannuation, or simply holding a better-performing asset. "Paying down your mortgage is a risk-free after-tax return equal to your interest rate," he notes. "At 6%, that's like earning 9 to 10% pre-tax in shares." With CGT concessions changing from 1 July 2027, he argues the comparison to holding a highly taxed, low-yielding property only gets less comfortable from here.

That's precisely the conversation Bates says is worth having with an investment property mortgage broker before deciding either way — not because selling is the goal, but because the decision should be based on the asset and the market, not inertia.

Future investors: the old playbook doesn't work anymore

For anyone considering a first or additional investment property, Bates says the calculus has genuinely changed. "The strategy has changed for most investors," he says. Buy an established property after Budget night and, from 1 July 2027, losses can't be offset against salary — investors either fund the shortfall from after-tax income or need something much closer to cash-flow neutral from day one. Layer on the new CGT regime, and every dollar of growth carries a heavier tax load than it used to.

New builds keep full deductibility, but Bates is quick to flag the trade-off: developer margins, settlement risk, and body corporate headaches that make many off-the-plan purchases harder to justify despite the tax treatment. His advice for anyone about to sign a contract is to nail down three things first: whether the property is genuinely a good asset rather than a tax-driven purchase, whose name it should sit in, and how you'll afford to hold it long-term. "Get advice from an accountant who specialises in property," he says, "not from a mortgage broker's YouTube channel." "If you can't answer all three before you sign the contract, don't invest."

Getting that structure right from the outset — the property, the entity, and the cash flow — is exactly where working with a mortgage broker for investment property purchases earns its keep, since a poorly structured loan can undo the benefit of an otherwise sound property choice.

The one question underneath all four groups

Whichever group you're in, Bates brings it back to the same starting point: "Where do you actually want to live? Is this the right asset for where you're going? What are the alternatives?" "The Budget doesn't answer any of that for you," he says. "But it does change strategy behind every one of those questions."

Sources referenced: Chris Bates | Mortgage Broker at Alcove (YouTube), "First Home Buyers, Upgraders & Investors: What To Do Post-Budget," Part 3 of the Post-Budget series, published 15 July 2026, presented by Chris Bates (Mortgage Broker & Co-Founder, Alcove).

Want more? Chris is continuing this series on his YouTube channel, with upcoming episodes going deeper on lending strategy for first-home buyers, upgraders, and investors.

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