Property professionals express concern over tax reforms’ impact on investment and housing supply

A recent study conducted by Herron Todd White, Australia’s leading independent property valuation and advisory firm, has revealed widespread concern among property professionals regarding the Federal Government’s tax reforms. The research, involving over 500 legal, financial, banking, and property professionals, found that a significant majority expect the reforms to negatively impact the Australian property market.

The study’s findings, based on live polling conducted on 25 June 2026, demonstrate a strong consensus among industry experts that the legislated reforms will reduce residential property investment. This reduction, they argue, will further dampen market confidence and lead to a notable decline in Australian housing values.

Peter Maloney, Chief Executive Officer of Herron Todd White, stated that the results clearly indicate the sentiment among professionals working across Australia’s property and financial systems. “These findings reflect the views of professionals who advise, finance, value, and regulate property transactions every day,” Mr Maloney said. “The overwhelming view among respondents is that the tax reforms will reduce investor participation and do nothing to lift housing supply, which remains one of Australia’s most pressing economic challenges.”

The research highlights that three in four respondents expect investors to exit the market. When asked whether they anticipated a significant number of residential property investors to sell or stop investing due to the reforms, 75 per cent of respondents answered affirmatively. Mr Maloney elaborated on this concern, noting, “When investors are prevented from purchasing established properties, with the benefit of negative gearing, there is genuine concern the impacts could extend to downstream rental supply, housing confidence, and broader market activity.”

He further explained the potential consequences of the reforms: “There is nothing to suggest that investors will suddenly pile in and take advantage of negatively gearing new dwellings to help fuel supply, and if they did, we now have the perverse equation of first home buyers having to directly compete with investors for new dwellings. The irony of this is that the tax reforms may well have created more competition for new dwellings, the category in which first home buyers are more likely to start their home ownership journey.”

The study also reveals that nearly eight in ten respondents expect property values to decline if the reforms proceed. When asked about their expectations for residential property values over the next two years, 37.7 per cent anticipated a decline of between 5 and 10 per cent, while 28.4 per cent expected a decrease of up to 5 per cent. Additionally, 11.8 per cent foresaw a decline of more than 10 per cent, 14.7 per cent predicted no material change, and only 7.4 per cent expected values to increase.

“While the extent of any market adjustment remains uncertain, there is a clear expectation among industry participants that the proposed reforms would place downward pressure on residential property values,” Mr Maloney remarked.

Further compounding these concerns is the industry’s scepticism regarding the reforms’ ability to improve housing supply. The research found limited confidence in this area, with nearly three in four respondents (74.5 per cent) believing the reforms would either worsen housing supply or have no material beneficial impact. Specifically, 43.5 per cent said the reforms would worsen housing supply shortages, 31.0 per cent anticipated no material impact, 16.0 per cent were unsure, and just 9.4 per cent believed the reforms would improve housing supply.

Mr Maloney highlighted this disconnect between policy objectives and industry expectations, stating, “Less than one in ten professionals surveyed believe these reforms will improve housing supply outcomes. That is a significant finding given housing supply and affordability remain central to Australia’s economic and social policy agenda.”

He concluded by emphasising the importance of these findings: “These findings provide an important insight into how the professionals who work across Australia’s property and financial systems believe the reforms are likely to impact investment, housing supply, and market confidence.”

The research underscores the need for careful consideration of the potential unintended consequences of the tax reforms on the property market, as industry professionals express significant concerns about the future of investment and housing supply in Australia.