May was a busy month for Australian real estate. 

The Federal Government announced its intention to overhaul negative gearing and capital gains tax arrangements for future property investors, while the Reserve Bank of Australia added further pressure on homeowners and investors by lifting the cash rate once again. 

Yet despite the twin headwinds of tighter monetary policy and proposed investment property tax reform, buyer demand remains surprisingly resilient. 

Research from Raine & Horne shows attendance at open homes is broadly in line with the levels recorded 12 months ago, suggesting many buyers remain committed to entering the market despite the policy uncertainty. 

That said, the proposed changes to negative gearing and capital gains tax, which must pass through both houses of Parliament, have prompted some property owners to reassess their holdings. Appraisal activity was up 36% year-on-year as property owners sought to understand the current value of their assets in the wake of the Federal Government's plans. 

However, listings nationally were down by only 2% in May, according to Raine & Horne, suggesting the government’s aim to create a larger pool of properties for first-time buyers is misplaced. 

Angus Raine, Executive Chairman of Raine & Horne, notes that despite minor party pressures, the Federal Government intends to grandfather existing investments under the current negative gearing and capital gains tax arrangements. “As a result, existing investors have little financial incentive to sell,” Angus said.  

Moreover, with the Reserve Bank set to announce its next monetary policy decision on 16 June, Craig Betalli, Senior Broker at Raine & Horne's financial services division, Our Broker, believes buyers could be re-energised if the central bank keeps rates on hold. 

"In May, the inflation rate eased, down from 4.6% in the year to March to 4.2% over the 12 months to April 2026i. At the same time, the unemployment rate increased by 0.2 percentage points to 4.5%ii. 

"If the Reserve Bank leaves rates unchanged in June as a result of lower inflation and higher unemployment, much of the uncertainty we've seen over recent months could quickly dissipate. 

“Buyers have shown they are still interested in property, and a pause on rates could encourage more of them to return to open homes and re-enter the market with confidence in the winter months.” 

This is encouraging news for vendors considering a sale, despite Australia's housing market taking a slight breather in late autumn, according to Cotalityiii. 

While dwelling values in Sydney and Melbourne softened in January, sellers can take comfort from the fact that most other capital city markets continued to record growth. 

Perth and Darwin led the monthly gains, with values rising 1.5%, followed by Brisbane and Hobart at 0.9%. Adelaide also continued its impressive run, recording a 0.5% increase. 

Angus Raine also reminds that several tailwinds remain in place that will underpin real estate values in the longer term. 

“Property markets will always experience periods of uncertainty driven by interest rates, government policy and economic conditions.” 

“However, while it is too early to tell the full impact of these archaic Federal Government measures revealed last month, what I do know – and have been saying for decades – is that the long-term stabilisers of Australian property values remain firmly in place.” 

Angus continued, “Population growth, housing shortages, the aspiration of home ownership and the limited supply of well-located property caused by government red tape continue to underpin demand and put a floor under values.” 

If you’re considering making a real estate move this winter, contact your local Raine & Horne agent today. And if finance is part of your plans, contact the team at Our Broker on 1800 913 677 to organise your home loan pre-approval.