The Orchard

It might sound strange to talk about an affordability ceiling while rental properties remain in short supply, but that's exactly what makes the current market so interesting.

Rents have increased far faster than household incomes since the pandemic, and tenants are increasingly being forced to make changes, whether that's moving further from the city, choosing a smaller property, sharing with others or simply looking for better value.

The rental shortage hasn't gone away, but the tenant's wallet is becoming an increasingly important part of the equation.

So are Australian rents approaching the point where affordability starts to slow the market?

I've looked at the numbers and what this could mean for the rental market and property investors.

Read the full article: https://orchardlending.com.au/2026/09/12/australian-rents-affordability-ceiling/

From 1 July 2027, the Government will introduce a fundamental tightening of negative gearing for residential property. The reform pivots decisively toward boosting housing supply: only "new builds" will retain the ability to offset rental losses against salary and wage income.

Importantly, the policy does not abolish deductions for established properties. Instead, it ring‑fences them. For an investor like Yoonseo, who purchases an existing dwelling after the May 2026 announcement, rental losses can no longer reduce tax on her $100,000 salary. Those losses remain deductible, but only in the future — against rental profits or the eventual capital gain. The tax benefit is preserved in value but deferred in timing, which is the key liquidity impact for investors.

To qualify as a new build and retain immediate salary‑offsetting benefits, a property must genuinely add to supply. Under the Budget's criteria:

• Eligible: Homes constructed on vacant land; a duplex replacing a single dwelling.

• Ineligible: Knock‑down rebuilds that do not increase dwelling count; substantial renovations; secondary dwellings such as granny flats attached to existing homes.

As the Budget papers highlight, current settings can encourage leveraged investment strategies that deliver greater tax advantages to investors than to owner‑occupiers. By narrowing these advantages for established properties, the Government aims to reduce investor competition for the same stock sought by first‑home buyers and redirect capital toward new housing supply.

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The Albanese government has announced major tax reforms in the 2026 federal budget, breaking its election promise not to touch negative gearing or capital gains tax. From budget night, negative gearing will only apply to newly built investment properties, ending the long‑standing ability for investors to deduct losses on established homes. The government argues this shift will rebalance the housing market toward first‑home buyers, with Treasury estimating 75,000 investor‑owned properties will move to owner‑occupiers over a decade, though it will also reduce new housing supply by about 35,000 dwellings.

Capital gains tax rules will also be overhauled from July 2027. The current 50% CGT discount will be replaced with a system that taxes only gains above inflation, paired with a new minimum 30% tax rate on capital gains to prevent high‑income earners from reducing their tax burden through timing or trust structures. Existing assets will be grandfathered into the old system for gains accrued before 2027, while gains after that date will fall under the new rules. Pensioners and income‑support recipients will be exempt from the minimum rate.

The budget also introduces a minimum 30% tax on discretionary family trusts from 2028, closing what the government describes as a loophole used disproportionately by high‑wealth households. While the opposition argues the changes will worsen housing shortages and raise rents, the government says its broader housing package—including $2 billion for enabling infrastructure and an extended ban on foreign buyers—will offset supply impacts and add a net 30,000 homes over four years. Over a decade, the tax changes are expected to raise $77.2 billion in revenue, even as the government acknowledges the political cost of breaking another tax promise.

Read more by following us here - Australia Budget Property Tax Changes

The Reserve Bank of Australia has lifted the official cash rate by 0.25 percentage points to 4.35%, its highest level in more than a year. This is the third straight increase in 2026, reflecting the RBA's push to rein in persistent inflation and temper wage pressures. The move follows continued signs of rising prices at home and abroad, along with stronger-than-expected household spending. More information about RBA Rate Hikes Here .

Australia's housing market is still ticking higher, just not quite as fast as it was a few months ago. According to Cotality's latest Home Value Index, national home values rose 1.0% in November 2025, the third month in a row of 1%-plus growth.

If you'd like to understand what these shifts mean for your borrowing power – whether you're looking to buy, refinance or invest – a quick chat can go a long way. You bring your goals. We'll bring the numbers and translate them into plain English.

Mortgage and Finance Brokers

A recent spike in Australian building approvals, suggesting a potential housing boom and easing of the housing crisis.

The anticipated interest rate cuts by the Reserve Bank of Australia (RBA). Rising construction costs, labor shortages, and high interest rates have previously hampered new housing supply, but the moderation in these costs coupled with lower rates is expected to encourage more construction.

While approvals are increasing, they still lag behind the government's ambitious National Housing Accord target, emphasising the need for continued growth in housing stock to improve affordability and match population growth. Read more updates at https://orchardlending.com.au/blog/ .

Rising construction costs, labor shortages, and high interest rates have previously hampered new housing supply, but the moderation in these costs coupled with lower rates is expected to encourage more construction. While approvals are increasing, they still lag behind the government's ambitious National Housing Accord target, emphasising the need for continued growth in housing stock to improve affordability and match population growth. All amongs the back drop of lower inflation figures.

For all your property finance needs book a call today - https://orchardlending.com.au/contact-us/

The Reserve Bank of Australia (RBA) cut the official cash rate by 25 basis points to 4.10% in February 2025, marking the first rate cut in over four years. This move, prompted by easing inflation and subdued wage growth, provides modest relief to Australian mortgage holders.

The decision has political implications as Australia approaches an election, and the RBA remains cautious about future rate cuts, emphasizing that this cut doesn't guarantee a series of further reductions. Analysts suggest homeowners should consider refinancing to secure the best possible rates, as competition in the home loan market is expected to increase.

Aiming to assist first-time buyers and investors. we examine factors like market trends, rental yields, lifestyle, and growth potential in these budget-friendly locales, recognising the competitive landscape and rising demand in this price segment. The guide draws on real estate reports, government data, and expert insights to analyse median house prices, infrastructure, employment, and amenities. Specific regions are highlighted, such as Ipswich, Moreton Bay, and Logan City in Queensland, along with Gawler and Salisbury in South Australia, and Melton and Armadale in other states, outlining their market dynamics, key suburbs, growth drivers, lifestyle benefits, and potential challenges. We conclude by emphasising the importance of thorough research and professional advice for prospective buyers when looking at investment properties and related real estate transactions.

Mortgage & Finance Brokers cjatting about various loan products, including business loans, with same-day assessments and 24-hour funding. Orchard Lending brokers highlight features like competitive interest rates and no early payout fees, emphasising a quick and transparent application process. We also offer free credit consultations and boast a high success rate. In addition to loan services, they we blog updates and podcasts on financial topics relevant to Australian borrowers.