National

Tax changes spark house listings boom but fewer rentals

Jun 13, 2026

A sign outside an newly rented home in Brunswick, Melbourne — Rental listings have shown large annual falls across all capital cities. -AAP Image

Investors are prematurely offloading their properties before tax changes even hit the market, resulting in a listings boom but fewer rentals.

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Rental listings across the country have shown large annual falls, with the steepest downturn so far in May.

All capital cities were part of the trend, with Hobart losing just 0.3 per cent of listing volume, but Darwin was down 2.1 per cent and Melbourne 1.7 per cent.

Sydney was hit hardest in the past year, down 1.5 per cent in May and 9.8 per cent annually, data from Neoval shows.

The figures suggested some of the nation's more vulnerable people were at risk of not finding affordable homes, Ray White chief economist Nerida Conisbee said.

"A home listed for sale does not help someone looking for a lease. Rental availability is what determines how much choice renters have," she said.

Though the federal budget was handed down on May 12, Ms Conisbee said it had likely had an effect on the month's numbers because buyers and sellers began behaving differently afterwards.

As a result, almost all markets now favour buyers, with the influx of listings in May struggling to sell.

Listings numbers are almost at their COVID-19 peak, but just 51.1 per cent of homes auctioned across capital cities the previous weekend sold, compared with more than 60 per cent a year prior, according to Cotality data.

The percentages are the lowest Australia has had in five years, partly because the economy is stretched by conflict in the Middle East.

It is a trend that is ultimately pulling property prices down, which has been criticised by economists as an unintended - though likely short-term - side effect of the federal budget.

Proposed negative gearing and capital gains tax changes are expected to hit the market further in the next quarter, as buyers' confidence weakens.

"If more homes go to owner-occupiers, fewer remain available to rent," Ms Conisbee said.

"That is particularly problematic given rental availability was already falling before the budget changes had time to flow through.''

The tax changes, which will limit negative gearing on properties to new homes from July 2027 and scrap a 50 per cent discount on the capital gains tax for a rate tied to inflation, have passed the House of Representatives.

But the reforms have sparked intense backlash from business groups and the coalition, and Labor will need to negotiate with the Greens to get the legislation through the Senate.