Before diving into what the upcoming election could mean for the property market, let’s first take a look at the latest auction results for a clearer picture of current market activity.

Scheduled Auctions
842
Reported Auctions
401
Total Sold
336
Total Passed In
65
Clearance Rate
84%

Scheduled Auctions
775
Reported Auctions
482
Total Sold
350
Total Passed In
85
Clearance Rate
73%

With a ruling majority in both houses of Parliament, the Albanese government now holds the political leverage to pursue long-shelved structural reforms chief among them, changes to negative gearing and the capital gains tax discount.

Labor has publicly distanced itself from these policies since its 2019 election loss, where its ambitious housing tax agenda was widely viewed as a decisive factor in its defeat. But with political constraints now effectively removed, questions are resurfacing about whether the party will seize its moment to reintroduce reform under the cover of fiscal responsibility and housing affordability.

Political Capital Meets Structural Opportunity

The 2019 policies proposed by then-Opposition Leader Bill Shorten restricting negative gearing to new housing and halving the CGT discount may have been politically toxic at the time. But structurally, they remain defensible. Both tax concessions come at a significant cost to the budget (negative gearing alone costs an estimated $4 billion annually) and arguably distort the property market in favour of leveraged investors.

The rationale for reform is now even stronger. The housing affordability crisis has intensified, wage growth remains soft, and inflationary pressures are encouraging calls for structural budget repair. Rebalancing tax settings around property investment may be more palatable to voters now, particularly with cost-of-living pressures dominating the national conversation.

Grandfathering and Investor Behaviour

Labor has consistently promised that any reforms would include grandfathering provisions ensuring that existing investments are unaffected and only new acquisitions are subject to new rules. This would mitigate market shock but not investor behaviour.

Even a hint of policy change could drive a spike in investor activity as buyers seek to lock in current benefits. A similar surge occurred prior to the 2019 election, when thousands of investors rushed to secure negatively geared properties ahead of a potential crackdown that never came.

Financial advisers are already noting an uptick in client interest in pre-emptive investment strategies a clear sign that sentiment is shifting despite official denials.

Mixed Signals from Government

To date, Treasurer Jim Chalmers has shown no appetite for reigniting this debate. The official line remains unchanged: no current plans to alter negative gearing or CGT discounts. But political denials are not legislative guarantees, and the current majority changes the calculus. Without a Senate crossbench to negotiate with, Labor has a rare window to act decisively if it chooses to.

Any move would need to be carefully managed. With interest rates still elevated and consumer sentiment fragile, sudden tax changes could destabilise the property market or trigger backlash from an already squeezed middle class. But incremental reform, paired with a strong fiscal narrative, could offer a way forward.

Labor’s majority gives it a free hand to legislate bold policy. The question is not whether it can act on housing tax reform but whether it will. If it does, expect a rapid realignment of investor strategies and, possibly, a temporary surge in demand before any grandfathering deadline. Investors, lenders, and advisers should remain alert to signals from the upcoming budget and parliamentary calendar.