Budget changes risk higher rents and tougher first-home competition

Proposed budget changes to negative gearing and capital gains tax are expected to disadvantage first-home buyers and renters while benefiting existing investors and developers. Removing negative gearing from established homes could push investors into new builds, where many first-home buyers already compete, especially in South Australia’s growth areas. Developers are already expected to raise prices in response to increased investor demand. Existing investors may hold properties rather than sell, creating tighter supply and higher rents. Historical comparisons from 1985–87 suggest rents could rise sharply, with a 40% increase cited from that period. Principal residences may also attract more spending because they remain capital-gains-tax-free. South Australia faces major housing delivery constraints, with AUKUS, South Road and hospital projects competing for trades and labour. Modular construction and targeted skilled migration are presented as possible solutions. Foreign buyer concerns are viewed as overstated, with tighter anti-money-laundering rules expected from 1 July.