As housing tax breaks fade, Australia’s biggest lender has said investors are redrawing their property plans.
The Commonwealth Bank of Australia’s director of commercial property research, Kevin Stanley, has said that the government’s negative gearing changes are triggering what he described as a “once-in-a-generation” reset in investor activity.
Stanley framed the current environment as one where longstanding approaches to leveraged housing investment could no longer be taken for granted.
“These are big decisions, these are kind of once-in-a-generation type decisions that need to be made,” he said.
He said that this inflection comes after a surge of activity in housing.
Stanley said there had been “a very significant investment into the residential sector” over the past year.
With negative gearing to be removed for established and confined to new builds beyond 2027, Stanley said that the obvious issue was what happened to capital that had long been parked in existing houses and units.
He said that based on current conversations, one likely outcome was a reweighting away from purely residential strategies.
“One of the biggest possibilities is that formerly residential investors will start to look increasingly at commercial property,” he said.
Stanley said that the policy overhaul had arrived just as many investors were already reassessing their positions in light of higher interest rates and global uncertainty.
“This is really a time for investors to stop, reflect, do some research and figure out which part of the investment landscape they want to focus on,” he said.
Commercial property’s mix of returns and tax
Stanley said that commercial assets now stood out due to preserved tax settings and a different risk-and-return profile to housing.
“Commercial property has a higher return and has more stable returns, longer-term leases. You’re locked in,” he said.
He also said that negative gearing “still applied” to commercial property.
Stanley said private investors “tends to really be the foundation of commercial property investing year in and year out” and noted that “so far in 2026, private buyers account for about 33 per cent of the market”.
At the same time, he said that the commercial market was not immune to headwinds.
Looking at sales above $1 million nationwide, Stanley said transaction volumes had eased as higher funding costs and global jitters weigh on sentiment.
Yet, he characterised the pullback as relatively contained, saying that “for the market to still be tracking just 12 per cent below where it was last year is actually not a bad result”.
[Related: Investor tax changes force borrowers back to drawing board]
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