Perth’s investment market is showing early signs of caution as speculation builds over federal budget changes to capital gains tax (CGT) discounts and negative gearing.
Perth-based buyer’s agent Heath Bassett (pictured) says many property investors are taking longer to commit to deals rather than walking away. They are weighing how potential tax changes could affect long-term returns and borrowing capacity.
“There’s definitely more hesitation than we were seeing earlier in the year,” said Bassett, co-founder of You&Me Personalised Property Services. “We’re not seeing people pull out of deals entirely, but some are taking longer to make decisions, delaying meetings or waiting to see what happens in the May federal budget.”
He said newer, less experienced property investors are the most likely to pause, particularly those nervous about how any reduction to the 50% CGT discount or tighter negative gearing rules might affect future profits.
“Newer investors are asking more questions and, in some cases, putting their plans on hold until there’s more clarity,” Bassett said.
Those concerns are being amplified by the broader national discussion on investor tax reform. Nationally, the Finance Brokers Association of Australia (FBAA) has warned that moves to alter the capital gains tax discount and negative gearing to “combat intergenerational inequity” could instead lift rents and make it harder for first-home buyers to save and qualify for loans. A recent Money.com.au survey, meanwhile, found 39% of investors would step back or sell if the 50% CGT discount were reduced.
Bassett said many Perth investors are also asking whether any CGT changes might be grandfathered and whether negative gearing could be limited to a set number of investment properties, prompting some to defer purchases until after the Budget.
In contrast, he said seasoned investors remain active, focusing on the city’s structural drivers rather than short-term tax uncertainty.
Despite the recent hesitation, Bassett believes Perth’s investment case remains strong. He points to Western Australia’s 2.2% population growth in 2024–25, the fastest of any state, which added 65,600 people, alongside just over 22,500 new dwellings completed over the same period.
“When you compare that to population growth, it highlights the imbalance,” he said. “The number of new homes being built is well below the increase in people needing housing.”
Bassett said that even if tax settings are adjusted, the existing supply-demand gap should continue to support values.
“There’s a perception that if CGT changes, it might reduce competition and push prices down. But realistically, any reduction in investor activity is unlikely to materially impact the Perth market, given ongoing supply constraints,” he said.
As budget day approaches, Bassett expects investor sentiment to stay measured in the short term, but maintains that “the fundamentals driving demand in Perth aren’t going away anytime soon.”
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