Valuers Expect Tax Changes to Continue Downward Pressure on Residential Market

Changes to Capital Gains Tax (CGT) and Negative Gearing are expected to have the biggest influence on residential market performance in the next 12 months, a new CBRE survey shows.

CBRE’s Residential Valuer Insights Q3 2026 surveyed the firm’s residential Valuers around Australia to provide expert insights on local and national trends. 

The survey found 83% of Valuers expect changes to Capital Gains Tax to put downward pressure on prices over the next 12 months. This is up from 50% in the Q2 survey, undertaken immediately after the budget was handed down. Most Valuers expect prices to fall 5% or less.

Looking at overall residential market performance in the year ahead, the survey showed 41% of Valuers expect the biggest influence will be the changes to CGT and Negative Gearing with 31% expecting interest rates to have an impact. This marks a reversal of the sentiment recorded immediately after the budget. 

There was some variation between markets, with 45% of Valuers in Melbourne Metro identified interest rates to be the main influence. In Sydney Metro 43% of Valuers considered interest rates and taxation changes to be equally important.

CBRE’s Pacific Head of Research Sameer Chopra said, “These insights are timely and help us to understand more about how market sentiment has changed since May following the changes to CGT and Negative Gearing. We can see these changes are now clearly influencing how prices, development and rents are being assessed.”

More than half of Valuers (56%) reported ‘soft’ or ‘very limited’ demand in their local markets. This was more than twice the level recorded in Q2 2026 and the first time since the survey began in 2024 that the majority of Valuers have reported in the negative.

First home buyers were identified as the main buyer group by 78% of Valuers in Q3, the highest share in the 11 quarterly surveys undertaken and the fourth consecutive survey with a share 70% or higher. 

Valuers noted investor activity has dropped, reflecting the impacts of taxation changes and higher interest rates. A total of 26% of Valuers said local investors were still active and 18% noted interstate investors were active in the market. This marks the lowest active buyer levels since the survey began in 2024.

CBRE’s National Director of Residential Valuations Kat Hale said, “Across Australia, our Valuers are seeing demand soften. There is still activity in the market, particularly from first home buyers, but demand from investors has slowed, reflecting the changes to CGT and Negative Gearing as well as higher interest rates.”

First home buyer activity was highest in Melbourne Metro, the ACT and Sydney Outer Metro and lowest in Brisbane Metro and Brisbane Outer Metro. Local investors were most active in Sydney Outer Metro and interstate investors in Melbourne Outer Metro.

House and apartment price expectations have softened this quarter with almost two-thirds of Valuers expecting prices to fall in the next 12 months. This is the first time in the survey’s history that more than half of Valuers have forecast price falls and contrasts to a year ago when 84% were expecting house prices to rise and 56% were expecting apartment price rises.

Valuers’ expectations for demand remains soft this quarter, with 41% expecting demand in their local markets to decrease over the next 12 months and 43% anticipating stability. Valuers in Adelaide had the strongest outlook followed by Perth.