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Tax changes emerge as biggest perceived threat to property prices
The federal tax changes are largely expected to put downward pressure on property prices over the next 12 months and have the most impact on the market, as demand continues to soften.
New data has shown that valuers largely expect this year’s federal tax changes to have a significant impact on residential property prices in the next 12 months.
According to CBRE’s Residential Valuer Insights Q3 2026, which surveyed valuers nationwide, 83 per cent of respondents expected Capital Gains Tax (CGT) changes to put downward pressure on prices in the next year.
The result marked an increase from 50 per cent in the Q2 survey, in the aftermath of the federal budget.
Similarly, the data showed negative gearing reforms were expected to cause price declines, with 80 per cent of respondents expecting downward pressure in the next 12 months, up from 48 per cent in Q2.
Here’s what valuers expect:
Market influences
Valuers expected the tax reforms to have the biggest influence on residential property overall, with 41 per cent saying it will be the largest factor in the next 12 months, followed by interest rates at 31 per cent.
The findings showed a reversal of the sentiment recorded immediately post-budget in Q2, when interest rates were projected to be the most pressing issue.
Meanwhile, general affordability issues were still predicted to be the third biggest influence at 14 per cent, similar to the Q2 result.
When it came to the geographical breakdown of respondents, there was variation between markets, with 45 per cent of valuers in Melbourne Metro identifying interest rates as the main influence.
In Sydney Metro, 43 per cent of valuers believed interest rates and taxation changes to be equally important.
In all other major markets, taxation changes were deemed to be the biggest influence
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Price projections
With many valuers anticipating price declines, 36 per cent said house prices would fall by up to 5 per cent over the next year, while 26 per cent projected a drop between 5 per cent and 10 per cent.
CBRE said it marked the first time more than half of respondents predicted house price falls, and contrasted with a year ago, when 84 per cent were expecting rises.
Similarly, apartment price expectations were also down, with two-thirds expecting values to fall over the next 12-months.
Across the unit market, a total of 29 per cent expected a drop of up to 5 per cent, and 31 per cent predicted a fall of between 5 per cent and 10 per cent.
Demand
Following the tax changes, higher interest rates and ongoing geopolitical issues, the survey found 56 per cent of valuers reported “soft” or “very limited” demand in their local markets.
The result was more than twice the level recorded in Q2 2026, at 22 per cent, and the first time since the survey began in 2024 that the majority of valuers reported in the negative.
A further 36 per cent reported moderate, or balanced, demand across the quarter, compared to 46 per cent in Q2.
There was some variation in results across jurisdictions, with a third of valuers reporting ‘strong’ demand in Adelaide and Perth.
Meanwhile, demand was still considered more balanced in Brisbane Metro, Sydney Outer Metro, the Gold Coast and Sunshine Coast.
According to the data, 41 per cent of valuers expected demand in their local markets to decrease over the next 12 months, with 43 per cent forecasting demand to remain unchanged.
CBRE’s national director of residential valuations, Kat Hale, said that across Australia, valuers were seeing demand soften for multiple reasons.
“There is still activity in the market, particularly from first home buyers, but demand from investors has slowed, reflecting the changes to CGT and Negative Gearing as well as higher interest rates.”
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