More investors now expect house prices to fall than rise for first time since 2022
Investor confidence slumps after Budget changes as government policy overtakes finance as the biggest barrier to buying property
More Australian property investors now expect housing prices to fall than rise for the first time since 2022, according to new national research that suggests the Federal Budget has triggered a sharp deterioration in market confidence.
The latest Australian Property Investor Magazine Property Sentiment Report found 46 per cent of respondents expect national property prices to decline over the coming year, while just 31 per cent believe prices will continue to rise. It marks a dramatic reversal from just nine months ago, when almost nine in 10 respondents expected further price growth.
The quarterly survey also revealed investor sentiment has shifted decisively into negative territory, with only 24 per cent of respondents describing themselves as positive about the property market, down from 61 per cent in the third quarter of 2025. Nearly half (48 per cent) now hold a negative outlook.
The findings suggest government policy has become as influential as traditional market fundamentals such as interest rates, housing supply and finance availability in shaping investor behaviour.
Changes to capital gains tax and negative gearing announced in the Federal Budget dominated investor concerns, with 78 per cent of respondents expressing a negative view of the CGT changes and 72 per cent opposing the negative gearing reforms. Government policy and legislative uncertainty also emerged as the leading reason investors are delaying property purchases, overtaking finance constraints for the first time.
While confidence has weakened, the survey suggests investors are reassessing, rather than abandoning the market altogether.
Buying intentions have eased, selling intentions have risen to their highest level in recent surveys, and reducing debt has become an increasingly important financial priority. At the same time, Queensland remains Australia’s preferred investment destination, with Western Australia climbing back into second place as interest in New South Wales and Victoria softened appreciably.
The survey indicates policy uncertainty is now weighing more heavily on investment decisions than at any point in recent years, with legislative settings increasingly competing alongside housing supply, interest rates and construction costs as key drivers of market sentiment.
Even as property price growth eases around the country, confidence that the Budget will achieve its stated aim of improving housing affordability remains low. A sceptical 69 per cent either disagree or strongly disagree, with just 14 per cent in agreement that the changes with make property more affordable.
As the market enters a correction phase, profit-taking was the leading reason for selling (21 per cent), narrowly clinging to its position at the top ahead of reducing total debt, which has doubled in three months to 19 per cent. Rental reforms and legislative changes continued to feature prominently at 13 per cent.
The Australian Property Investor Magazine Property Sentiment Report is conducted quarterly and draws on responses from readers across Australia, including investors, owner-occupiers, first home buyers and other property market participants. Now in its 21st edition, the report tracks changes in market sentiment, buying and selling intentions, price expectations and investment priorities over time.
