Negative Gearing Is Changing: What Happens Next?

The end of negative gearing for established property could become one of the biggest turning points in Australia’s housing market—not just because investors may lose tax deductions, but because of the ripple effects it could create across buyer behaviour, borrowing capacity, property values, and the types of housing that get built in the future.But if these changes are designed to improve affordability, who actually benefits—and what could break in the process?In this episode, Veronica and Chris unpack the federal government’s proposed changes to negative gearing and capital gains tax, exploring why the real risks may lie in the unintended consequences. From investor pullback in regional markets and apartment-heavy precincts to the growing pressure on first-home buyers and developers, they examine how markets driven by investor demand could respond if the economics of property investing fundamentally change.They also dive into what they call the “secondary market problem” —the possibility that properties built to attract tax-incentivised investors today could struggle to attract buyers once those incentives no longer apply to future owners.The conversation also explores the broader forces already weighing on the market, including inflation, interest rates, lending conditions, and weak consumer confidence. Rather than reacting emotionally to the policy changes, they challenge listeners to think more strategically about asset quality, long-term demand, and what sustainable investing could look like in a post-negative gearing environment.Episode Highlights01:57 – The Negative Gearing Changes Explained04:19 – Why Chris Says “Everything Gets Repriced”06:37 – Who Wins From the Grandfathering Rules?10:40 – The Borrowing Capacity Squeeze Ahead12:21 – Which Regional Markets Are Most at Risk?17:39 – The Mining Boom Mistakes Repeating Again21:22 – Property Changes Meet Economic Headwinds26:04 – Could Investor Sell-Offs Accelerate?28:02 – Why Negative Gearing Created Scarcity32:04 – Could Investors Need Another Bailout?33:27 – The Owner-Occupier Data Nobody Sees37:41 – Rental Demand, Bonds &amp; Market Pressure38:56 – Will First Home Buyers Finally Benefit?41:35 – Why Australians May Need New Wealth Strategies44:22 – Which Property Segments Get Hit Hardest?46:17 – The Tax Structure Problem Few Discuss48:04 – How the Property Industry Will Pivot Next50:37 – Final Warnings for Buyers and InvestorsMentionsInvestopoly (Podcast) with Stuart Wemyss &amp; Campbell WallaceAbout the HostVeronica Morgan is one of Australia’s most respected property experts, with decades of experience spanning property investment, buyer advocacy, market analysis, and consumer education. As the co-host of The Elephant in the Room and co-founder of Homebuyer Academy, Veronica is known for her evidence-based approach to property investing and her ability to cut through industry hype with clear, strategic insights. Having worked through multiple property cycles, she specialises in helping buyers understand the long-term drivers of capital growth, asset selection, and risk management in an increasingly complex housing market.Chris Bates is the founder and CEO of Alcove, an award-winning mortgage broking and property advisory firm that helps Australians make smarter financial and property decisions. With deep expertise in lending strategy, borrowing capacity, debt structuring, and cash flow management, Chris works closely with first-home buyers, owner-occupiers, and investors navigating changing market conditions. He is widely recognised for his analytical approach to property and finance, as well as his willingness to challenge conventional wisdom and hype-driven investment narratives.Together, Veronica and Chris bring a rare combination of on-the-ground property expertise and real-world lending insight. Their conversations blend macroeconomic analysis with practical strategy, helping listeners better understand not just what is happening in the Australian property market—but why it matters and how to respond intelligently.ResourcesVisit our website: https://www.theelephantintheroom.com.auIf you have any questions or would like to be featured on our show, contact us at:The Elephant in the Room Property Podcast - questions@theelephantintheroom.com.auLooking for a Sydney Buyers Agent? <a href="http: