From hidden reserve prices to AI-altered rental listings, governments are introducing new rules designed to make the property market fairer and more transparent.

1. Buyers can now see a property's reserve price

This month, Victoria brought into force new rules requiring a person selling a property to be transparent about the lowest price they'll accept.

Sellers and their agents now have to share this reserve price with potential buyers seven days before an auction or fixed-date sale.

The state government is framing the reform as a crackdown on underquoting.

This is when an agent suggests a property will be cheaper than what they know it'll likely end up costing.

Dr Paul Harrison from Deakin University's business school says Victoria is the first state to require such transparency.

"It will certainly help buyers and I think it will actually help real estate agents as well," he says.

"It makes people feel more confident and I think you'll see more people genuinely being at auctions," he adds.

"[Real estate agents] will get people turning up who actually do want to buy."

Monica Rouvellas, a solicitor with Sound Counsel specialising in property law, says the change will help young people especially.

"A lot of first homebuyers spend $200 or $300 per property to do their research, only to go to an auction to find out that they're not even able to afford it," she says.

But Rouvellas also shares some of the concerns about the law raised by Victorian real estate groups.

In particular, the potential for it to deny sellers flexibility as they approach an auction date.

"If the reserve price is set too low and they need to update it, then they have to restart that seven days again," she notes.

2. AI-edited rental listings must be disclosed

From next year, landlords and agents in New South Wales will have to disclose when a rental advertisement has been altered with, or entirely generated by, AI.

It comes after Money has highlighted examples of real estate agents altering images of their properties to make them look more eye-catching.

In one case, a Queensland agency used digital tools to make it look like a property had a pool and water fountain that, in reality, didn't exist.

Dr Harrison from Deakin University says such tactics can cause potential renters to get emotionally invested in properties that aren't as good as they think.

He welcomes the incoming reform, but says agents putting a generic disclaimer acknowledging AI use won't help renters understand how exactly an image has been altered.

"They might think that once they disclose, they can do whatever they like and can put the responsibility back on the consumers," he says.

He wants the disclaimers to be more specific.

"It would be different if they actually talked about the change that was made," he argues.

"Like if it said the garden has been digitally-enhanced or the swimming pool or these windows do not exist".

3. Renters can transfer their bond to a new property

The New South Wales government is also making changes to its bond system it says will save renters up to $4000 every time they move to a new property.

The Smart Rental Bonds initiative came to life last month.

It allows renters whose security deposit has been lodged with Rental Bonds Online, the state's central holding facility, to transfer their bond from one property to the next.

New South Wales Tenants Union CEO Leo Patterson Ross says the initiative appears to be working well so far.

"It resolves a particular problem, which is when you are moving out of a home you usually have to pay for the bond at the next home before you get your old bond back," he says.

"So that means you have double the bond taken up in the system".

But Patterson Ross is critical of the $25 fee renters are being charged to use the scheme.

He also says his state could look to other parts of the country for ideas on how to better help people leasing a home.

"The ACT and Victoria are probably the two that have come the furthest and give the best deal [to renters]," he notes.

Reader question

I have lived in the same three-bedroom inner-Sydney house since 2020, and the household has functioned steadily with co-tenants.

The owners are now considering selling and have expressly invited me to make an offer before they commence a marketing campaign.

One of the two expected appraisal inspections has taken place.

My present individual borrowing capacity is limited, so I have started exploring whether a small group of trusted friends could pool resources to make ownership achievable.

I am already speaking with a mortgage broker and would obtain independent legal and financial advice before proceeding.

I came across your comments about buying property with friends and thought my situation might be one where your perspective would be particularly valuable.

My central question is: What would you regard as the most important financial and relationship risks to resolve before a group of friends considers purchasing a home together? - Anssi

Paul Clitheroe's response

Good question, Anssi. A shared purchase can enhance or destroy friendships. I am pleased you took the time to send me an email about this way of buying property.

It makes a lot of sense, but it must be done with care.

You have nailed the technical aspects of a shared purchase. Talking to a mortgage broker and then seeking independent advice before proceeding is the way to go.

But the most important issue here is not blowing up your friendships.

Before you see an independent adviser, you need to pull out the wisdom of Solomon and discuss with your friends exactly how this will work. I've seen a shared purchase work well, and it usually does until life changes.

It sounds like you would live in the property with your co-purchasing friends.

Obviously, you would sign an agreement involving mortgage repayments, costs and so on, and it is usually low stress until life gets in the way.

The list of life stuff is as long as your arm, but what happens if one of the owners loses a job, gets ill, moves for work, wants to buy their own place, or there's a friendship falling-out?

The obvious solution is a buyout, but will the rest of the group have the financial capacity to do this?

An adviser will most likely suggest 'majority rules' if it is necessary to sell the property, but this often leads to disappointment for those who don't want to sell.

I think the right answer is more complex than this when it involves friends.

I'd like you all to sit down together and discuss life and the changes it brings. I'd add this 'soft' conversation to your agreement as a reminder of why you bought together.

About all you can say with confidence is that people's lives always have and always will change.

So do your best to discuss this openly and take your conclusions to an adviser to document your thoughts, not just provide a standard template.

What to read next

• The pros and cons of buying property with friends
• Ask Paul: Should I buy a house with my adult children?
• Read this before you buy property or go into business with family
• Ask Paul: Should I buy a home with my mate?
• Friends With Money #22: Who owns the house? Joint tenancy vs tenants in common

Australians can compare the energy efficiency of a washing machine in seconds.

Yet when we buy a home, the largest purchase most of us will ever make, too often we're expected to make a million-dollar decision without knowing what it will cost to run.

It's a problem hiding in plain sight. Almost 97% of Australian property listings don't disclose a home energy rating, leaving buyers in the dark about running costs.

And as thousands of homes come onto the market this spring selling season, that missing piece of information could cost buyers and sellers alike.

Buyers will commit to running costs that are unknown to them at the point of sale. Sellers will forgo value that is sitting invisible inside their property.

That cost and that value are the same thing: how much energy the property needs to run.

When we think of energy costs, our mind often starts sifting through different providers, or how we can get a better deal. But here is the rub.

Why energy ratings matter more than your power plan

Your energy plan sets the price of energy at any given moment. But it is your house that determines how much energy you need to buy over the life of your occupancy.

Many factors determining this can be painfully difficult to change, such as insulation, window glazing, or which way the living areas face. Switching plans also only saves a few hundred dollars once, then ACCC data shows these savings erode over time and require constant switching.

A better-performing house, on the other hand, lowers your bill every single year without any further action taken.

And Australians do want to know this before they sign. Research shows 86% want to see a home energy rating when buying, and 75% when renting.

So how did we become the third country globally to put energy ratings on appliances back in 1986, and yet are still catching up when it comes to our homes?

Why the rating never reached the buyer

The answer is in new research released by Cotality alongside the Real Estate Institute of Australia, examining how energy performance in homes became Australia's missing measurement.

The Efficiency Edge report notes that Australia already has a home energy rating system. It's just that most consumers don't ever see it.

The Nationwide House Energy Rating Scheme was built to show councils that a new home meets the construction code, which is how over 90% of new homes still use it. It was never designed to tell a buyer or renter what the place would cost to live in.

Yet Australians are doing the maths anyway.

Research shows around 68% of Australians planning renovations are doing so to lower their bills, sitting well ahead of the 55% who cite environmental benefits. Buyers are increasingly recognising that the cheapest home to buy isn't always the cheapest home to live in.

And where families can actually see a rating, they act on it.

When buyers can see a home's energy performance

The report followed several Australians as they bought, sold, or leased a home, to assess whether an energy rating impacted their decisions.

In one example, a family chose a four-bedroom rental that was 35% more expensive than another they liked, because it rated six stars against the 1.5 stars of their rejected choice.

This happened in Canberra, where energy ratings have been mandated at the point of sale and lease since 1999. The family was rewarded for their decision when the first electricity "bill" arrived as a $146 credit.

In a second Canberra case, a four-bedroom house passed in at auction at $2 million, but then five weeks later sold for $2.4 million instead.

The buyer pointed directly to the reduced running costs predicted from the 15 kilowatts of solar, seven-kilowatt battery, and double glazing as the trigger to bid higher. And the vendor collected $400,000 that would otherwise have stayed invisible.

These examples are of course anecdotal. But running costs are becoming as important to buyers as mortgage repayment costs, showing up in what sellers can achieve.

So how can we bring this number to the forefront?

Most Australians aren't making the energy comparison that our aforementioned renters did, because there is no requirement to declare the energy rating of a home in most Australian states.

The hidden features affecting your energy bills

The features deciding your bill are also the ones you can't easily see at inspection.

Insulation, glazing, orientation, and draught sealing sit behind walls and above ceilings, and are routinely absent from listings or described inconsistently.

But when they do become visible, the money conversation changes.

Solar panels can be seen from the street and are usually in listing pictures. Research shows they lift a property's value by around 2.7%, or roughly $23,100 on a typical property.

So buyers and renters are already paying more for the savings they can see. But there are more savings within many properties  that are just as capable of being shown like this.

A Home Energy Rating for existing homes launched nationally last month, delivered by an accredited assessor who visits the property to determine the energy score.

New South Wales began its voluntary rollout of rating disclosure in mid-2026 and has said it will move to mandatory disclosure once the market is ready. But there's no need to wait for the change.

Sellers and landlords can choose to order one now and put it in their listing, so the savings that are already built into the home can also be priced into the sale or rent.

Buyers and renters can also ask for one before they sign, to ensure they aren't setting themselves up for bill shock.

Because if a washing machine can offer you energy transparency, there's no reason the house it sits in can't too. And that answer may be worth a great deal more.

Rising seas levels could cost Australia $855 billion in damage to land and property by the end of this century, according to a new report from the Climate Council.

The climate advocacy group says as many as 267,000 coastal properties and two million hectares of land could be hit by flooding and erosion under the scenario, which it says is conservative.

Its Rising Seas, Rising Bills report notes sea levels have already risen and that Australians can expect them to rise at least another 14 centimetres by 2050.

With further increases likely beyond this, water levels could then be as much as 54 centimetres above where they are today by 2100.

Most properties deemed at risk are in Queensland, New South Wales and Western Australia.

The Gold Coast alone faces $84.4 billion in projected economic losses - the most of any urban area in the nation.

Report co-author Professor Tom Kompas from Melbourne University says many properties in the firing line would be homes.

"It's mostly residential. So in most cases, in Brisbane and the Gold Coast and so on, it's basically residential properties to a large extent," he says.

Professor Kompas says homeowners would see damage mostly in the form of coastal erosion, mould, landslides and localised flooding, as higher seas levels carry storm surges to into wider areas.

Residents already seeing impacts

The Climate Council says emissions from the burning of fossil fuels is heating the planet and driving the rise of sea levels, which it says have increased already.

Aileen Vening lives near the Victorian coastal town of Inverloch.

She prides herself on monitoring the local coastline closely and has seen significant erosion events hit local beaches regularly over the last 15 years.

"Everyone started noticing it from about 2012," she says. "From then on it may not be every year, but it's only one serious weather event away from a lot of erosion".

Vening says a 2024 storm washed away 18 metres of beach, while the local surf club has had to deploy sand bags to protect its facilities from erosion.

Yet coastal properties remain popular

Kym O'Connell is a real estate agent in Currumbin Valley near the Gold Coast - the city the Climate Council warns will suffer more damage than any other.

She is cautious about flooding in her region, but says rising seas levels are "low on the radar" of people moving into properties near beaches or waterways.

"Migration [to the Gold Coast] is massive and won't cease," she says. "Beachfront properties really haven't been damaged enough to steer people away... those downsizing go straight to the beach to live".

She believes the lifestyle and climate will keep people coming to the area, but is concerned about how they'll deal with the escalating costs borne out of a growing risk of floods.

"When your insurance premiums become just completely unaffordable, it does make you wonder where that will end".

Homeowners facing costs on their own

Property owners will have to pay for much of the damage caused by tidal inundation and storm surges out of their own pocket because these events aren't covered by most insurance policies.

"Actions of the sea are generally excluded or limited because coastal erosion and inundation are high and increasingly predictable risks that are difficult to insure sustainably," a spokesperson for the Insurance Council of Australia (ICA) told Money.

What can be done?

The ICA spokesperson adds: "What's needed is greater investment in coastal protection and adaptation, and better risk-informed land planning so development is kept out of high-risk locations".

The Climate Council agrees, saying Australians should stop building properties in at-risk areas, invest in coastal protection measures and even "manage a retreat" from properties in highly-exposed locations.

Professor Kompas, who worked on the economic modelling of the damage rising seas levels would do, admits these mitigation measures would also be "very expensive".

In the meantime, he says, people should be careful about buying property near the coast.

"Check where the land is situated. What's it's elevation? Are there any barriers that are going to protect you? Is there a possibility of a landslide behind you?"

Aileen Vening from near Inverloch, agrees: "Do your homework, pay attention and just realise that this is not a hypothetical, this is not going to get better."

Thinking of borrowing against your home? Falling property prices could put those plans at risk.

A decline in your home's value can erode the equity you've built up, reducing your borrowing power and, in some cases, leaving you with no equity to access at all.

That scenario may become more common if the Commonwealth Bank's forecast proves accurate.

This week, the bank warned house and unit prices could fall by more than 10% in Sydney and Melbourne during 2026, cutting more than $100,000 from the value of a $1 million home.

What is home equity?

The equity you hold in your home is the difference between its market value and what you still owe on any loan you used to purchase it.

"[It's] the portion of your home's value that you own outright, so it's essentially the difference between what your home is worth and what you owe on that home," explains Blake Cullen, senior financial adviser at Evalesco.

Most banks calculate your "usable equity" - the portion of equity they'll let you borrow against -- by taking 80% of your property's value and subtracting what you still owe on your loan.

So if your property is worth $1,000,000 and the remaining balance on your loan is $500,000, your usable equity would be $300,000.

How can you access your home equity?

Accessing equity means borrowing or withdrawing an amount of money from your bank that is in proportion to the usable equity you hold in your home.

Most people do this by taking on a new or bigger loan from the bank they have their mortgage with, but talking to loan brokers or other lenders as part of a refinancing process can also help you unlock equity.

Cullen says many of his clients spend the money they get through their equity on renovations on their home, but notes that putting it towards investing has also become "more prevalent".

How will falling property prices affect your home equity?

Real estate experts say most Aussies have a decent amount of equity in their home, thanks to their properties having consistently increased in value since they've bought them.

"For the last 10 years or so that I've been doing this, it does build quite quickly," says Ruth Van Eekelen, broker with Aussie Home Loans.

"But lately we have seen it start to stall somewhat and not grow as much as it has been".

Falling real estate prices in most parts of the country have squeezed borrowers' equity.

This week, real estate data company Cotality revealed national home values had fallen for the fifth month in a row, most recently by 0.9% in August.

In some parts of the country, declines have been much larger.

When the market value of your home falls closer to the amount remaining on your loan, your equity in the property - and, by extension, the amount you can borrow - shrinks.

If your property's value reaches what you still owe on your loan or falls below it (negative equity), you won't have any usable equity on which to borrow.

Whose homes are most at risk?

Sam Gordon, founder and director of advisory Australian Property Scout, says people who have bought homes in the last year or so in expensive suburbs in large cities are at most risk of having no usable equity.

"First homebuyers who've used a 5% deposit to be able to go out and buy property -- if they were to buy in an area where the values had [fallen], there is a very decent chance they could be in negative equity... or sitting at 100% debt on home value," he says.

How to check your usable equity

Most banks have calculators on their websites which can show you your estimated usable equity.

But to use these, you'll need to know your home's value and your remaining balance on any loans.

What to watch out for before using the equity in your home

1. Make sure you've got the money to service any loans

Most bank products that let you access your equity are loans, so your bank will still want to make sure you can afford the extra costs that come with these.

"Even if you have a lot of equity in your property, that doesn't automatically mean you can access it," says Ruth Van Eekelen from Aussie Home Loans.

"You still need to have the income available, we still have to verify that you have capacity to repay [the loan]".

2. Home improvements don't automatically boost equity

Van Eekelen says another mistake home owners make is assuming any amount they've spent improving their home will automatically be reflected in the property's value and therefore be added to their equity.

"If you spend $200,000 fixing-up or doing renovations, that doesn't automatically mean you're adding $200,000 worth of value," she says.

3. Think before investing with equity

Noting the growth in people using home equity to invest, Blake Cullen from Evalesco says anyone pursuing this option should consider how changes introduced by the recent federal budget may have affected popular investments.

"You want to be having a good think around the types of investments that you want to put that money into," he says.

"Based on the changes, it's just worth having a second thought as to what is a good investment going forward."

The holiday home, the great Australian aspiration. A discretionary purchase that promises long-term capital growth, weekends away with family and friends and, increasingly, an income stream to help cover the mortgage.

Summers on the beach in Noosa, Byron Bay or Lorne. Winter school holidays at Mt Hotham. A week of wine and solitude on Tasmania's East Coast.

For years, a few weeks of short-term rentals helped offset the holding costs. But that equation has become more complicated.

Short-term rentals rebounded strongly after the pandemic, reaching more than 174,000 active listings nationally by the end of 2024.

As the sector has grown, governments, councils and the ATO have tightened the rules, while higher interest rates and rising operating costs have made holiday homes more expensive to own.

So, does a holiday home still stack up as an investment in 2026?

Why investors still love holiday homes

Wisebuy Home Loans founder Brad East says whether short-term rentals still make financial sense had been under scrutiny well before the Budget and the ATO's renewed focus on holiday home deductions.

Many buyers are attracted to the flexibility of owning a holiday home they can enjoy themselves while earning income when they're not using it.

"A lot of the time it's for more personal reasons as opposed to investing reasons," he says.

"They might buy an apartment on the Gold Coast and say it's an investment, but they're also staying there every month. It's really a lifestyle purchase."

East says buyers need to separate those two objectives before they purchase because that's how lenders assess the property.

Rather than using projected nightly rates to assess borrowing capacity, lenders generally rely on a long-term rental appraisal.

Once a property has been operating as a short-term rental for around 12 months, they may also consider the income declared in the owner's tax return.

"You can't tell the bank it's going to earn $1000 a night. They'll use the lower long-term rental appraisal figure instead," he says.

That means buyers need to be confident that they can afford the property without relying on projected short-term rental income.

East says short-term accommodation is also far from a passive investment.

"If it is a proper investment, then it almost needs to be run as a business," he says.

The Airbnb tax traps every owner needs to know

Borrowing capacity is only one consideration.

The tax treatment of holiday homes can also have a significant impact on the investment's overall return.

Since July 2023, booking platforms, including Airbnb, Stayz and Booking.com, have reported host income directly to the tax office under the Sharing Economy Reporting Regime.

From July 1 this year, the ATO introduced new guidance spelling out exactly how holiday homeowners should apportion expenses between private holidays and paying guests.

The ATO is paying attention to whether a property is genuinely available for rent, whether below-market rentals to family and friends have been treated correctly and whether a holiday home is being operated as a legitimate income-producing investment rather than kept primarily for private use.

DSR Partners partner and tax specialist Taylor Hulls says anyone buying a holiday home with plans to rent it out should understand those rules before making assumptions about what they can claim.

East recommends doing two things before committing to investing in a holiday rental property:

1. Check the ATO's website

The examples they provide leave no room for ambiguity over primary use and legitimate claims.

"Often the most common mistakes or misconceptions clients have are related to the deductibility of their expenses and the private use apportionment. We also commonly see issues with claiming deductions for repairs or capital improvements," says East.

"Clients often spend a potentially large sum on renovations, or even replacing a hot water heater, oven or air conditioner, and expect immediate tax relief in the year they spend it.

"Even though these may appear to be repairs, the vast majority of expenditure above $300 needs to be depreciated over a period of up to 40 years.

2. Prepare a cashflow forecast

Before committing, East recommends preparing a detailed cashflow forecast covering mortgage repayments, strata, council and water rates, insurance and other holding costs, then stress testing the investment against seasonal income and longer-than-expected vacancies.

"Planning out the potential best and worst-case scenarios for the timing and amount of income received from your investment ensures you have a plan in place to meet these holding costs when they are due," he says.

"It's awesome to have a fully booked property over the Christmas holidays bringing in a premium, but you still have to pay the mortgage in July."

Why location matters more than ever

Research from The University of Sydney found that short-term rentals accounted for almost one in five homes in Byron Bay at the end of 2024, compared with 3.2% on the Sunshine Coast and much lower levels across most metropolitan areas.

In the past three years, that concentration of short-term rentals has prompted many councils to tighten local planning rules to return more homes to the long-term rental market.

Home Scouts founder Bronwen Stacey specialises in helping buyers purchase holiday homes in Noosa on Queensland's Sunshine Coast, with many intending to offset holding costs through short-term rental before eventually relocating or retiring.

"There's a lot of due diligence that we undertake for any shortlisted property, but short-term letting approval is definitely one of the early deal breakers that can eliminate a property before it even reaches the inspection stage," she says.

Noosa Council tightened its short-term letting rules in February 2022 to ease pressure on the long-term rental market.

Many holiday rentals now require council approval before they can operate, and are subject to ongoing conditions and annual fees.

Since the rules were introduced, more than 3100 properties have been approved to operate as short-term rentals.

At the same time, the council has refused 103 applications and issued 180 infringement notices against owners breaching the rules.

Stacey says that the changes haven't stopped buyers looking for holiday homes.

"It's important that buyers are educated from the outset about the limited supply of approved properties, the areas where short-term letting is permitted and the likely returns, so they have realistic expectations," she says.

Stacey says the restrictions have prompted some buyers to rethink their plans where achieving strong holiday rental income is fundamental to the purchase.

"For the majority of our clients, the primary motivation is securing the right property in a tightly held market.

Lifestyle is usually the driver. Rental income simply helps cover the holding costs until they're ready to move."

The reality of running a holiday rental

So will the property perform as a short-term rental?

Nesty co-founders Sally Broad and Felicity Lewis have spent almost a decade managing holiday homes across Victoria's Surf Coast. They offer this advice:

Be realistic

The biggest misconception they see is how much income owners expect the property to generate.

"People often think they're going to make more money than they actually will. Once upon a time that was probably the case, but markets have changed and there are so many more variables," says Broad.

"You have to be realistic about how much money a short-term rental will make you.

You can't enter with the mindset that you're going to make a profit because you may not even cover all your costs."

Work out your goal

Before Broad agrees to manage a property, the first thing she asks is what the goal is.

"If you have a holiday home and need it to generate a certain amount of income every year, we can't guarantee a return because the market is always changing. We can't make those promises," she says.

Most clients use the properties themselves as well as renting them out.

About half block out peak holiday periods for family use, while the remainder leave the calendar open to maximise bookings.

Be prepared for the costs

Even after the ATO's announcement on greater scrutiny of holiday home usage and deductions, Broad says few changed the way they use their properties because rental income was never the primary reason they bought.

"They're fortunate enough to own a holiday home. Any income they make in between is a bonus."

However, almost all owners underestimate the work, and costs, involved before the first guest arrives.

Avoid doing it on the cheap

"Invest in good mattresses, make the property feel welcoming and get a stylist in if you need to.

If you start well and get good reviews early, you'll make more money," she says.

Presentation, professional photography and thoughtful furnishings all influence bookings, while a distinctive feature such as a spa, fire pit or family-friendly outdoor space can help a property stand out in a crowded market.

Get the pricing right

Broad says successful short-term rentals require constant revenue management and owners who refuse to adjust prices during quieter periods often end up with empty calendars that ultimately reduce annual returns.

"You've got to be flexible.

There are months when prices are lower, but filling those quieter periods can produce a better return across the year than holding out for one expensive booking," she says.

How one family made their holiday home pay

It's the advice Sarah Hamilton and her family took when leasing out The Soak House, now one of Nesty's best-performing properties.

The Lorne holiday home, purchased in August 2025, is walking distance to the beach.

The three-bedroom property sleeps eight and rents for more than $1500 a night during the peak summer season.

Following Broad's advice, the family hired a stylist on settlement to refresh the interiors and installed a spa on the deck for guests to enjoy while taking in ocean views.

The changes doubled the property's nightly rate and significantly increased occupancy.

Hamilton says after their experience with their first short-term rental in Aireys Inlet, the family was realistic about the intention of the purchase and never expected the property to fund their lifestyle.

"It's not a big money maker," she says.

"It does a good job of covering most of the costs while we're not there."

They're now considering adding a Euca-built two-bedroom modular home on the large block to help maximise the return and provide extra space for their growing family.

But the income isn't the biggest driver.

Instead, Hamilton says one of the benefits of short-term renting is that the house is maintained year-round, professionally cleaned between guests and ready for the family to enjoy whenever they arrive.

The verdict: Are holiday rentals still worth it?

Despite the tighter regulation, higher holding costs and increased scrutiny from the ATO, Cotality research director Tim Lawless says short-term rentals can still outperform traditional leases, albeit in the right locations.

"The maths of short-term renting has become more nuanced and much more geographically specific," he says.

"They can still stack up where the property is in a high-demand tourism market, occupancy is consistently strong and the rental premium is sufficient to offset higher operating and compliance costs."

Lawless says the challenge is that investors can no longer assume those conditions exist simply because of a property's address.

He points to Queensland's patchwork of council rules that vary between local government areas and even individual suburbs depending on zoning and dwelling type.

That makes due diligence critical, he says, particularly as councils continue to look for ways to protect long-term rental supply.

"Some investors may decide the additional compliance burden, risk and uncertainty aren't worth it, particularly if they were relying on year-round short-term letting to make the investment stack up," he says.

"For some investors, a traditional long-term rental may now look more attractive, particularly where the gap between short-term and long-term rental returns has narrowed."

Short-term rentals haven't become a bad investment and can still make sense for investors prepared to do their due diligence.

But they're not a set-and-forget investment or source of passive income.

Lending policies, council rules, tax obligations, operating costs and seasonal demand all need to be considered before taking the plunge, not after.

Property was the vehicle for investment returns. Leverage was the engine.

The recent changes to negative gearing and the capital gains tax discount have weakened some of those tailwinds.

In broad terms, negative gearing will be restricted to established residential properties acquired before the Budget announcement, while the 50% CGT discount will be replaced by cost-base indexation and a minimum tax on capital gains from 1 July 2027.

While the Budget changes do not remove the investment case for property, they do reduce some of the tax advantages that previously supported these kinds of leveraged investments.

For some investors, these advantages outweighed some of the limitations of property investing, such as its illiquidity, but with the tax benefits removed, this may need rethinking.

Even without the tax benefits, property may still be an effective vehicle for building wealth.

However, as retirement approaches, reducing debt, contributing to super, improving diversification and maintaining access to capital can become just as important as growth.

Tax should be the tail, not the dog

Negative gearing was often promoted as a tax strategy, but nobody became wealthy simply because they received a tax deduction.

A $1 deduction does not produce a $1 tax saving.

Property investors must still fund the remaining loss, together with interest, maintenance and transaction costs.

For the past three decades, strong capital growth has often more than compensated property investors for these expenses.

But as we are currently seeing, capital growth can't be taken for granted. Ultimately, an asset must have an underlying reason to appreciate, whether that is rising income, increased demand or constrained supply.

The investment should work before tax. Tax concessions should improve a sound strategy, not justify a poor one.

For many investors, the numbers behind buying property may still be sound. For example, an investor who pays a deposit of $200,000 to buy a $1 million investment property has an asset worth five times their initial investment.

If the property value rises by 10%, the $100,000 gain represents 50 per cent of the original deposit, before interest, tax and costs.

This approach was particularly effective when borrowing costs were declining, property losses could reduce tax on salary and eventual gains received a substantial CGT discount.

But with less generous tax treatment and higher financing costs, future returns will depend more heavily on the property's rental income.

There are two key lessons here. Investors can't assume the conditions that supported previous returns will continue indefinitely. In addition, they need to remember that leverage works both ways.

A 10% fall in price reduces their equity by the same amount.

Concentration risk

Another consideration for investors is that many are unintentionally concentrated in their investments, with their family home, investment property and employment income all highly dependent on the Australian economy and property market.

That concentration may have helped build wealth while property values were rising and employment income was strong.

But it has also created a degree of risk which has been brought to the forefront by the Budget changes.

The tax changes therefore provide a useful trigger for reconsidering whether adding another leveraged property to an investment portfolio remains the best use of capital.

Super opportunity

A strategy that has successfully built wealth does not automatically remain the best strategy for funding retirement or transferring that wealth to the next generation.

As property concessions are reduced, superannuation is one of the few remaining opportunities to claim a personal tax deduction while building wealth.

Concessional contributions can reduce taxable income, subject to the applicable contribution caps and eligibility requirements.

Unlike negative gearing, these contributions direct money towards an investment for retirement rather than providing a deduction for an ongoing investment loss.

This can be particularly useful when approaching retirement, when investors may be earning their highest incomes and have fewer years remaining to build their super balance.

The strategy becomes less about taking on additional debt and more about placing savings into a tax-effective retirement structure.

Estate planning

Property's illiquidity may not matter greatly during the accumulation years. In retirement, access to capital becomes more important.

A diversified investment portfolio can generate income and allow investors to sell only the amount required.

Property will generally require refinancing or selling the entire asset, often involving significant costs and settlement delays.

Liquid portfolios can also be simpler to administer and divide between beneficiaries.

Property may create practical difficulties if beneficiaries disagree about whether to retain or sell it, or if one beneficiary wishes to take ownership but the others need to be paid out.

This does not make shares inherently better than property. It means flexibility, simplicity and estate planning should form part of the comparison, particularly later in life.

Warren Buffett once said, "Diversification may preserve wealth, but concentration builds wealth."

For many property investors, concentration and leverage did build wealth. But as retirement approaches, the objective often changes from building wealth to preserving it.

That is when diversification, liquidity and simplicity become increasingly important for funding retirement and transferring wealth to the next generation.

Reader question

Hello, Paul, my husband and I have been avid readers of your column since 2023.

Your insights are invaluable to us, and we are hoping for your guidance on how to best structure our finances to enjoy a comfortable lifestyle now while securing our future retirement. We are both in our mid-40s.

Our current position

• Property: Purchased our home in 2023 for $1.8 million with a current mortgage of $670,000.
• Mortgage strategy: We use a redraw facility. All our income is paid into the loan, and we redraw funds as needed for daily expenses and holidays.
• Income: Combined annual income of $310,000 (Josh: $200,000; me: $110,000).
• We both receive 17% super contributions. My husband has about $335,000 and I have about $100,000, both on defined benefit schemes.
• Family: Two children in primary school.
• No other debts: We usually go on an overseas trip once every one to two years.

Upcoming capital expenditure

We have significant renovations planned to improve our home:

• 2026: Window replacements ($43,000 deposit already paid).
• 2027: Ensuite addition, plus bathroom and laundry updates (approximately $100,000).
• Future: Landscaping, fencing and a pergola (approximately $100,000).

The dilemma

We currently pay approximately $87,000 in annual income tax. While we've noted your previous advice regarding paying off a primary mortgage before investing, our high tax burden is making us reconsider.

Given our high marginal tax rates, would you still suggest prioritising the mortgage and renovations over acquiring an investment property or shares? Especially considering the changing legislative landscape around negative gearing benefits.

This brings us to a couple of areas where my husband and I don't quite see eye-to-eye:

• Investing vs the home: I have a strong interest in real estate, but my husband does not. He believes our retirement security lies entirely in paying off our family home. I feel that a home isn't a complete retirement plan and that we are missing out on our potential to build wealth through outside investments.
• Renovating vs moving: My husband is hesitant about the upcoming renovations, not due to the cost, but because of the living disruption and his belief that they won't add significant resale value. He would prefer to sell and buy a finished home. My view is that we can easily afford the renovations and should do them to enjoy the lifestyle benefits now, especially since buying a new home that ticks all my boxes is outside of our current budget.

Our key questions for you:

Would you suggest shares or an investment property as viable "retirement builders" for us right now, or should we stick to the "mortgage-first" path despite the heavy tax leak?

Down the road, if we can afford it, does it make sense to completely pause our renovation plans now, save the money, and eventually buy a new home while keeping our current home as a rental property?

Or should we forget about investing entirely, focus purely on climbing our respective career ladders to reach the next pay level, and simply use that extra income to pay off our home loan faster? - Sothea and Josh

Paul's response

Thanks for the kind comments, Sothea and Josh. I much enjoy answering Money reader questions and try to provide some guidance in a very volatile world. Some things, such as wars, viruses, legislation and so on, we can do little about. But we can focus on what we can control.

Speaking of volatile, as you are very aware, the landscape for negative gearing has shifted quite dramatically. Tax has a habit of doing this.

Until September 1985 we had no capital gains tax (CGT). Then it was introduced on an inflation-adjusted basis. In September 1999, we moved to a mathematically simpler system where all your gain was taxable, but we received a 50% discount.

Now it looks like we return to the past and pay CGT on any gains in excess of inflation on investments after 1 July 2027, with a minimum rate of tax of 30%.

Personal taxation did not exist until 1915 when our first federal income tax was introduced to help fund the war effort in World War I, the idea being that it was a temporary tax. So much for that, of course. As we all know, tax has evolved into an overly complex, vast piece of legislation.

Tax is changing and it must keep changing, upsetting some, pleasing others.

Take our age pension system. I know retirees would like payments to be higher, and unemployment benefits certainly could be. But an age pension did not exist before 1908, when it was decided men should get one at age 65. Back then men lived, on average, to 58. Now a man's life expectancy is nearly 82.

Did we need to move the qualifying age up? Yes, we did. But it was only increased to 67 for men and women, a two-year increase, when on average we live some 16 years longer.

Changes to tax are inevitable as life expectancy increases.

One of my key money rules is "investment first, tax second". I am very cautious when I see tax being the primary driver.

Take the crazy tax schemes of the 1980s and 1990s. Huge tax breaks were introduced for film production and rural activities such as pine plantations and all sorts of things. In the vast majority of these, be it a film or a pine plantation, we got very few good films or pine plantations. Salespeople and managers of these products did well, but few investors did.

Super is an area where tax is part of the conversation, but the first part is holding good-quality assets for low fees. Add tax breaks to this and we investors have a winner.

With 17% super contributions, Josh will have little or no scope to salary sacrifice into super, but you should be under the $30,000 cap and, if your super balances are below $500,000, which at your ages I think they would be, you may be able to use your unused amounts from the previous five years.

I'd like you to chat to your accountant, your super fund or a financial adviser about this.

With the changes to CGT and negative gearing, super and the family home have become two very attractive, tax-advantaged assets.

We would have had a far more interesting chat about negatively gearing an investment property before the recent federal budget, but now, of course, you are restricted to a new build.

I'll be interested to see the actual legislation, but it seems a new build is one bought from a developer, a home built on vacant land, or an older demolished property where there is a significant increase in housing density.

My decades-long view has been to negatively gear an existing property in a tightly held area near a city centre or hub, with well-established public transport, schools, entertainment and so on, with scope to improve it and with as much land as possible.

There is a simple rule here. Property depreciates, which is why investors get depreciation allowances. Land appreciates in tightly held, established locations.

It is a bit sad, but it is also true that older buildings are often better built than newer ones.

So I'd be very cautious with negative gearing under the new rules.

My view would be to keep adding to your offset account via your redraw account. Top up super to the maximum, while recognising you can't touch this money until retirement.

I think there is an investment property in your future, but I don't want to see you buy the wrong new build that you can negatively gear just for tax purposes.

I'd suggest that a bigger deposit, where your rent pretty much offsets the costs of holding the property, and buying the very best property in a great location, is the way to go.

But with your incomes, large super contributions, adding value to your home with renovations and a commitment towards saving, I have little doubt you will be financially independent well before your retirement years.

I wish you all the best.

What to read next

• Could new CGT rules make shares more attractive than property?
• The best property investments after negative gearing changes
• What happens after you pay off your mortgage
• Ask Paul: We've paid off our house in our 40s, what now?
• How to choose investments that fit your life

Aussie property owners pay tens of millions of dollars in state and territory land taxes and local council rates every year.

But these levies are influenced by property values, so will the recent fall in real estate prices mean some relief from these charges?

To find out what owners can expect, we asked three residential property experts:

• Melissa Barlas, founder of Conveyed conveyancing
• Mathew Tiller, head of research and business intelligence at LJ Hooker
• Dr Cameron Murray, chief economist at Fresh Economic Thinking

1. What is land tax?

Melissa Barlas: Land tax is an annual state or territory government tax levied on the ownership of land, based on its total taxable value. It's separate from council rates and from stamp duty, which is a one-off tax paid on purchase.

2. How is it calculated?

Mathew Tiller: It's not a federal government tax, which is why the rules are different across Australia... the main thing to understand is that land tax is generally based on the value of the land only, not the full market value of the property including the house.

Dr Cameron Murray: It's a tax on the unimproved value of the land. It's not how much your home would sell for, it's how much, if your house burnt down, your empty block would sell for... [there are] a variety of exclusions for owner-occupiers and low-value holdings. For example, in Queensland, you have to own at least $600,000 of residential land that's not your principal place of residence to start falling into the land tax bracket.

3. Who pays land tax?

Melissa Barlas: Owners of land that isn't their principal place of residence, investment properties, holiday homes, vacant land and commercial land, generally pay it once the total value of their landholdings in that state exceeds the threshold. Most owner-occupied homes are exempt (thresholds and exemption rules vary by state). Foreign owners often pay an additional surcharge.

4. How is the government-assessed land value different to the market value of a residential property?

Mathew Tiller: This is one of the biggest sources of confusion around land tax. A property's market value and its government land value are not meant to be the same number. A property could have a market value of $1 million, while its government assessed land value may be considerably lower.

Melissa Barlas: The government valuation (often called unimproved or site value) values the land only, it strips out the house, granny flat, pool and any other improvements. Market value is what a buyer would actually pay for the land and everything built on it.

5. How do government land values influence council rates?

Mathew Tiller: Official property valuations can be used when councils calculate rates, but the approach varies across Australia... your rates bill is not simply a tax on the value of your property. Councils usually work out how much revenue they need to raise, then share that cost across properties using their rating system. Property values can influence that calculation, but so can rating categories, minimum rates, service charges and other council charges.

6. There's been talk of property market prices falling in Australia - will this affect official land values and therefore land tax?

Melissa Barlas: Eventually, but with a lag. Valuations in several states are based on multi-year averages or periodic revaluation cycles, so a market downturn doesn't show up immediately, it needs to be sustained across a full valuation cycle to meaningfully pull down official land values.

Mathew Tiller: Even if the assessed land value falls, the land tax bill may not fall by the same amount. Tax rates, ownership structures, exemptions and the treatment of multiple properties can all affect the final bill.

Dr Cameron Murray: Depending which state you live in, they might not go down. The [tax] rates might go up, even if your land value goes down. For example, if you're in Victoria, they might want to not give up that tax revenue, given their budget tightness.

7. Will falling property market prices lead to lower council rates?

Melissa Barlas: Not automatically, no... because council rates are ultimately a budget-allocation tool, not a direct percentage of your property's value.

Mathew Tiller: Councils need to raise money to provide local services, infrastructure and facilities. Property valuations are used as part of the system to work out how that cost is shared between properties... but if property values fall across an entire council area, the council may still need to raise a similar amount of money. Everyone's property might be worth less, but that does not automatically mean everyone's rates bill will fall.

8. What recourse do property owners have if they believe their government-assessed land valuation is too high?

Melissa Barlas: Owners can lodge a formal objection with the relevant valuation authority... supported by independent valuation evidence or recent comparable sales. If the objection is rejected, most states allow a further appeal to a tribunal or court.

Mathew Tiller: Timeframes vary across states and territories... but the key point is to act quickly. These processes usually have strict deadlines, so owners should not leave it too late if they think the valuation is wrong. It is also worth checking whether land tax or council rates still need to be paid while an objection is being reviewed.

1. Borrower's market as mortgage slump continues

If you've got a home loan, now could be a good time to look for a lower rate, with more signs the mortgage market is shifting in favour of borrowers.

All four of Australia's big banks have now confirmed they're seeing softening demand for home loans, as competing lenders cut rates to grab a slice of the market.

On Thursday, ANZ revealed people had started applying for smaller mortgages since the May federal budget.

The bank said the average dollar value of loan applications it received between mid-May and the end of July was 12% lower than it had been earlier in the year.

That news came a day after the Commonwealth Bank, while announcing a bumper profit of $ 11 billion, reported it too had seen demand for mortgages fall since the budget, with applications down 15%.

These were the last two of the big four to confirm a waning appetite among Australians for help buying property.

NAB reported last month that applications for its home loans had dropped 15% in the three months to June, while Westpac noted it too had seen a slump.

The fall in mortgage demand comes after the budget wound back tax concessions for property investors and three interest rate hikes since February increased borrowing costs.

Mortgage brokers have told Money they've seen lenders cutting rates on variable home loans - something Canstar says 28 mortgage providers have already done in the last two months.

2. When will Ozempic and Wegovy be cheaper in Australia?

Both the federal government and the makers of drugs like Ozempic want the medications to be put on the Pharmaceutical Benefits Scheme (PBS) and made cheaper for Australians, but can't agree on a price.

Commonwealth health minister Mark Butler this week said drugs like Ozempic and Wegovy were "too important not to have on the PBS," but that his department couldn't agree with manufacturers on a price "they're willing to receive and we're willing to pay on behalf of taxpayers."

When a medication is on the PBS, the government negotiates with manufacturers to agree a price at which it will be sold to Australians and then subsidises a portion of this, lowering the cost to local consumers substantially.

GLP-1 medications like Ozempic that suppress appetite are listed on the PBS to treat type 2 diabetes, but not for weight loss. Accessing these drugs outside the PBS can cost between $5000 and $6000 per year.

A few days after Butler's comments, the CEO of Eli Lilly, maker of GLP-1 drug Mounjaro, confirmed to the ABC that his was one of the companies whose PBS negotiations had broken down over price.

David Ricks said the rate proposed by the federal government was "significantly lower" than what was being offered by other countries' subsidy schemes, adding Australia wasn't recognising the real value of the drug.

3. ASIC says shopping around could cut your car insurance premium

Aussies are again being urged to shop around to save money, this time on car insurance.

The corporate regulator ASIC says insurers are hitting customers with "sharp and repeated" premium increases that are above inflation, but isn't explaining why.

ASIC looked at eight different insurance providers and conducted research involving more than 2000 Australians and found premiums had "surged" 8% in the year to July 2025 and 42% between 2019 and 2024.

Despite these hikes being well above the rate of inflation, no insurance companies had properly explained how the new prices had been calculated and why premiums had increased so much.

The solution? Again, Aussies are being told to shop around, or at least threaten to - ASIC says 31% of people who contacted their insurer to challenge their new premium got a discount.

4. AUSTRAC shuts down 96 crypto ATMs over scam concerns

The federal government's financial intelligence agency has shut down 96 cryptocurrency ATMs across Australia, saying the company running the machines wasn't doing enough to prevent them from being used for money laundering and scams.

Crypto ATMs allow customers to exchange cash for cryptocurrency, but authorities say scam victims are being directed to the machines and coached to use them to send money to criminals.

The Australian Transaction Reports and Analysis Centre (AUSTRAC) suspended Cryptolink's operating licence for three months this week, shutting down all of its ATMs.

The intervention came after the company was late submitting reports on large "high-risk" transactions being made with its machines.

AUSTRAC says requiring these reports is one of the ways it's trying to get crypto ATM operators to stop their machines being abused by criminals.

Cryptolink last year said it had put measures in place to prevent its machines being misused, but consumer groups have called for all crypto ATMs to be banned anyway, saying they have "no legitimate use".

In any case, the pause on Cryptolink's operations may do little to cut down on scams - the company's machines make up only 96 of the more than 1800 crypto ATMs now running across Australia.

5. Cbus changes death benefit nominations after consumer concerns

An advocacy group for superannuation consumers has criticised the industry for not doing enough to help customers decide who gets their super when they die.

The criticism from Super Consumers Australia came as super fund Cbus made changes appearing to mirror those the advocacy group was calling for.

In research released on Monday, Super Consumers Australia noted only 13% of people it had surveyed were certain they had a binding death nomination.

It said super funds should be reminding members to make these, pointing out that they provide more certainty than non-binding nominations.

In reporting these findings, ABC News highlighted the story of relatives of a Cbus customer, who complained their uncle's superannuation money hadn't been distributed as he had wished because his death nomination was non-binding.

Cbus told the ABC it was undertaking "significant reforms" to simplify its death and insurance claims processes and some of these appear to have already materialised.

Just days prior to the ABC story being published, the company announced it would stop offering non-binding death benefit nominations.

It also said it would scrap nominations that expired after three years - another system quirk consumers have raised concerns with.

In a decision that was widely anticipated beforehand, the nine Board members voted unanimously to keep the cash rate steady at 4.35%.

This marks the second rate hold from the RBA in as many meetings, following three consecutive rate hikes at the start of the year.

In its post-meeting statement, the Board stated that inflation is still too high and that it won't rule out the possibility of further rate increases if necessary.

"With monetary policy judged to be somewhat restrictive, the Board decided to leave the cash rate target unchanged while it assesses how the economy is evolving.

"The Board will continue to do what it considers necessary to bring inflation sustainably back to target, including increasing the cash rate target further if upside risks materialise."

Is now a good time to negotiate or switch your mortgage?

So, what does the hold mean for households? On the surface, a bit of stability, which, after rate rises in February, March and May, will be welcome news to some - particularly those with a mortgage.

While today's decision won't translate into relief for borrowers, another development in the market could be working in their favour.

Both NAB and Westpac have revealed drops in loan applications in recent months, with reduced borrowing power following earlier rate hikes and the impact of the budget's property-related tax reforms, playing a role.

Richard Whitten, money and home loans expert at Finder, says that given the drop in loan volumes, lenders may be more likely to want to keep hold of their customers.

"I do think existing borrowers looking at either negotiating a better rate, or refinancing, are the customers that lenders are heavily incentivised to try and keep happy.

"After all, it's much easier to keep an existing customer than to acquire a new one.

"That's provided that borrowers themselves are in a good position. People may find that their borrowing power is not where it was two years ago, for example, because their expenses have gone up - and not necessarily in line with their income."

What are the best home loan rates in August?

Whether a borrower is looking to negotiate a better deal on their existing loan or eyeing a switch to a new lender, comparing their current interest rate to the rest of the market can help.

This is all the more important given that, as Whitten explains, there's a significant spread in home loan rates from the cheapest to the most-expensive end of the market.

"On Finder, our broad average is close to 7.00% for variable rate mortgages at the moment, but that encompasses lots of different scenarios.

"Right now, anything around the 6.00% mark or under is a good deal.

"There's quite a few small lenders with rates under 6.00%, as well as a few larger lenders like Greater Bank, Bendigo Bank and Unloan (which is backed by Commbank) that have rates sitting around 5.80% to 5.90%."

Thinking about refinancing? Here are four things to consider

In a recent survey conducted by Compare The Market, one in four mortgage holders admitted they should be looking around for a better deal, but one in 10 weren't sure where to start.

As Whitten lays out, while the rate attached to a loan is likely to be the most important factor to consider before refinancing, it's not the only one.

Here are three other things he suggests are worth considering when weighing up a switch:

• Fees: "The rate is going to be the main cost you'll want to consider, but any one-off or ongoing fees are also important - you don't want to be overpaying for fees."
• Offset account: "Another major consideration may be whether the loan has an offset account. Being able to put money in your offset can just be so beneficial - so much so that some people view it as more important even than their rate."
• App or online platform: "A point people often miss is convenience and whether a lender has a good app or online platform. An app that lets you manage your loan more easily and be engaged with your spending and saving can make a big difference."

Want to learn more about the refinancing process? Check out our article on how to refinance your mortgage for the first time for more information.

More than half of Australian residential property investors follow a well-worn path to long-term wealth creation and building a portfolio.

They find an established property, put in a tenant, claim the deductions in their tax return each year and let time do the heavy lifting.

The Federal Budget changed the economics of that strategy in May, as investors buying established residential property were no longer able to offset rental losses against their salary.

Newly built homes, including off-the-plan apartments, remain eligible for negative gearing, while commercial property is unaffected.

These changes are expected to send more investors towards assets that some may have never seriously considered.

Here's what to weigh up before taking the next step.

1. Is it always better to buy a new-build than an existing home?

The proposed tax changes may encourage more investors to consider new residential property, but Flint Group co-founder and investment adviser Redom Syed says instead of asking whether to buy new or established, the question should be: will this established property outperform the new one by enough to justify buying it?

"Our modelling suggests an established property needs to outperform a comparable new property by around 0.5% to 1% per year in capital growth to justify buying it instead," he says.

"Historically, that's often happened because established homes tend to be in tightly held suburbs where supply is constrained. A lot of new developments are built in growth corridors where there's simply more land to develop over time."

The balance between housing supply and population growth also differs markedly between growth corridors.

Western Sydney, for example, is expected to require more than 25,000 new homes a year to accommodate forecast population growth, yet fewer than 6000 dwellings are currently under construction across the region, according to Ray White Western Sydney.

Not all locations are equal

Knowing where to buy becomes just as important as deciding what to buy, says Eda Property founder Anissa Cavallo.

Rather than relying on suburb-level growth figures, she recommends understanding future land releases, local supply and demand, and the differences between individual estates.

"Not all estates and growth corridors are created equal, and plenty will lag on capital growth. The right street in the right pocket matters enormously."

Cavallo expects the Budget changes to increase competition for quality new housing and says investors who have already identified the right opportunity may benefit from acting sooner rather than later.

"Given the Budget has ensured that a lot of investor focus will shift to the new-build space, I think there's a real window of affordability right now."

Take the final price into account

Buying new also comes with tempting upgraded finishes and features that aren't included in the base contract, while site costs can materially change the overall budget.

"I've seen people walk into a display home, get completely mesmerised by the interior design and the very talented salespeople working those spaces, and then feel let down when they start pricing up what they need," she says.

"The quoted base price is rarely the full story. Drainage issues, easements and slope problems can add $20,000 to $60,000-plus if they weren't disclosed upfront."

Negative gearing isn't the only financial advantage of buying new, according to Cavallo.

She says depreciation and the ability to lock in today's purchase price during construction can both improve long-term returns.

2. Is it advisable to seek independent advice before buying?

Just as most investors rely on a conveyancer to review contracts and a mortgage broker to arrange finance, a buyer's agent can also play a role, particularly when purchasing a new build, an off-the-plan apartment or commercial property.

While buyers agents are often associated with established homes, many specialise in these markets, helping investors assess opportunities, negotiate contracts and navigate the different lending, construction and settlement processes.

Buyer's agent and current Property Investment Professionals of Australia (PIPA) chair Cate Bakos says demand for specialist knowledge is likely to increase as more investors explore parts of the market they may not have previously considered.

"New property selection requires a different approach and skillset given the complexities vary greatly," she says.

"From defects, sunset clauses, lending regimes and subdivision/titling, not all agents understand new builds and the responsibilities that these assets command."

When looking for the right buyer's agent, Bakos recommends checking they have a firm knowledge of lending policy for new or off-the-plan properties, and the ability to tackle the settlement process, including defecting and sign-off.

Make sure it's the right investment for you

It's a service that Cavallo believes is less common than it should be, as investors assume that because they're buying directly from a developer or project marketer, they don't need independent representation.

"When you buy through a developer's sales team, their job is to sell you that product at that price. They're not thinking about whether it's the right asset for your portfolio, whether the pricing stacks up against comparable stock in that corridor, or whether the contract terms protect you," she says.

"You need an independent and experienced set of eyes to review the contract, assess the location and developer track record, and tell you honestly whether the numbers make sense."

3. Is it worth owning more than one dwelling?

Not every investor buying new will look at greenfield estates or off-the-plan apartments.

Instead, they may add a granny flat, subdivide an existing block or create a second dwelling on land they already own.

According to Domain research, "granny flat" was Sydney's most searched property keyword in 2025, while searches for "dual living" and similar terms have risen sharply.

Solvere founder and property adviser John Pidgeon says experienced investors have long used subdivision projects and secondary dwellings to manufacture equity and improve returns, and he expects more investors to explore those strategies under the proposed tax changes.

"The sophisticated investors have always used this as a wealth-creation method so that will continue for them," he says.

"The granny flat will be in vogue as people search for a better-yielding portfolio to offset the negative-gearing impacts."

Strong capital growth vs tax benefits

However, Pidgeon says investors should remain disciplined when assessing development opportunities, and if there's no prospect of capital growth, tax benefits will be of little help.

"Proceed with caution around supply and demand, the number of investors surrounding you, build costs and reliability, and forecast supply coming into the market in the coming years," he says.

Creating additional housing is often more expensive and time-consuming than investors expect, Cavallo says, as people underestimate the cost of planning permits, surveying, civil works, service connections, legal fees and holding costs.

These can quickly erode the economics of a small subdivision.

Timing is important

"The entire process from purchase to title on the new lot can easily run two to three years. It used to cost around $50,000 on average per block. Now, even subdividing a small block can cost over $150,000 per block," she says.

"It can absolutely work, but the numbers must work, not just the concept."

Cavallo suggests the easier and least risky path is to find land that's already been subdivided.

4. Is commercial property a good investment?

Commercial property is also expected to attract greater investor interest because it sits outside the proposed residential negative gearing reforms.

BMT Tax Depreciation chief executive Bradley Beer says many investors overlook smaller commercial assets because they assume the entry price is significantly higher than residential property.

"Many investors looking around the $1 million mark focus primarily on residential property," he says.

"But smaller commercial assets such as offices, industrial units, retail spaces and consulting rooms can also sit within a similar price range."

BMT analysis found commercial properties purchased for $1 million or less delivered average first-year depreciation deductions of $13,659 and average deductions of $62,720 over the first five years.

Flint Group broker Ben Robinson says investors looking for well-leased assets in major cities should generally expect to enter the market closer to the $2 million mark, where larger tenants, longer lease terms and stronger liquidity become more common.

Smaller commercial assets can carry higher leasing risk and can be more difficult to sell.

Tenant turnover and vacancy rates

Unlike residential property, commercial values are closely tied to the income generated by the asset, making tenant quality, lease terms and vacancy risk central to the investment.

He says one of the biggest mistakes investors make is entering the commercial market too early without the financial buffer to withstand vacancies or tenant turnover.

"Unlike residential, where you might only be vacant for a few weeks, commercial properties can sit empty for months, so you need a longer runway and stronger cashflow to hold the asset," Robinson says.

He adds that commercial lending is also more structured than residential lending, with finance strategy and ownership structures required.

Urban Property Australia founder Sam Tamblyn says the best opportunities are emerging in markets where population growth, tourism, major projects or defence spending are increasing demand faster than new commercial space can be built.

He lists industrial markets on the Gold Coast, Adelaide, Perth and Melbourne's south-east, where vacancy rates remain exceptionally low, along with selected regional hotel markets benefiting from tourism and major infrastructure investment.

5. Is buying off the plan a good idea?

Developers are also expecting to see an uptick in investors making up a larger share of the buyer pool, with the Gold Coast's Lewis Land anticipating an increase in interest in its 16-hectare master-planned community, Harbour Shores, which will deliver more than 2000 new homes over 10 years on the northern Gold Coast.

Lewis Land's head of development Michael Long says the challenge will be ensuring that there's enough well-located apartments available for both investors and owner-occupiers.

"Competition between first-home buyers and investors has always been a challenging market dynamic, but the real issue is whether there is enough well-located, attainable product to serve both," he says.

Lewis Land is responding by placing greater emphasis on one- and two-bedroom apartments in future releases, while continuing to prioritise first-home buyers through projects such as Palm House, where there's a greater concentration of more affordable property.

The lowdown on apartments

Investor appetite for new apartments was already on the rise well before Budget night, with the latest Urbis Apartment Essentials insight report showing that local investors accounted for 28% of apartment pre-sale buyers during the March quarter, the highest share since 2017.

New investor loan commitments for new builds accounted for almost 43% over the same period, of up from 15.1% five years earlier.

Interest has been strongest in Perth and the Gold Coast, where the latter's sales figures were up 47% in the March quarter, the highest level of new project activity recorded since Urbis began monitoring the market.

With only 14 months of supply left at the end of March, Urbis director Lynda Campbell says demand continues to absorb new stock almost as quickly as it reaches the market.

The same can't be said for every apartment market, Flint Group's Syed says, encouraging investors to focus less on whether an apartment is new and more on whether supply is genuinely constrained.

"People often talk about apartments as though they're all the same, but they're not. Apartment markets move in cycles just like housing markets do," he says.

"The biggest thing I look at is supply. If approvals are falling, projects aren't stacking up financially and fewer apartments are getting built, eventually you create scarcity.

At some point prices have to move higher, otherwise developers simply won't build."

Quality of the asset

The final assessment still comes back to the quality of the asset, rather than the tax treatment, Ray White Group chief economist Nerida Conisbee says, listing yield, rental demand and long-term resale prospects are more important than ever.

"In a low price-growth environment, investors cannot rely as heavily on capital growth to make the numbers work. If negative gearing is no longer available on established apartments, the property needs to generate enough rental income to be viable on its own," she says.

She reminds investors that under the new tax rulings, the advantages of a new apartment are largely enjoyed by the first purchaser.

"A new apartment is also only new once. The first buyer may benefit from the tax treatment, but the subsequent buyer pool is smaller if future investors cannot access the same concessions. That could affect resale demand and long-term capital growth."

6. What really makes a good property investment?

For all the discussion around negative gearing, capital gains tax and housing supply, the Budget hasn't changed what makes a good property investment.

Investors still need to buy quality assets, pay the right price and ensure the investment suits their financial circumstances.

What is likely to change is where those opportunities are found and how investors assess them.

Syed expects the market to become more selective over the next two years as investors place greater emphasis on cashflow, rental yields and affordability than they have in the past.

Rather than stretching to borrow as much as possible, he believes many will focus on building more resilient portfolios capable of performing under a wider range of market conditions.

"I think we're going to see investors become a little more defensive. Higher yields, lower entry prices and stronger cashflow are becoming more attractive than stretching to buy the most expensive property possible."

Long-term perspective

That doesn't necessarily mean investors should become more cautious.

Periods of uncertainty have often produced some of the strongest buying opportunities, provided buyers remain disciplined and keep a long-term perspective.

Syed says investors worried about changing tax settings should spend less time trying to predict the market and more time assessing their own position.

"I'd almost ignore the market for a minute and focus on yourself. Are you financially secure? Can you comfortably service the debt? Are you investing for the long term?" he says.

"Because if those things haven't changed, then the investment thesis really hasn't changed either."

The outlook is likely to vary between markets, with supply-constrained locations expected to outperform while others contend with affordability constraints, weaker demand and softer conditions.

PIPA's Cate Bakos agrees the proposed reforms are unlikely to produce a single winning property type.

Instead, she expects investors to become increasingly discerning about the quality of individual assets, while placing greater importance on rental yields, purchase price and long-term fundamentals.

"I predict a rise in quality, boutique and low-density apartments in the capital cities," she says.

Do your research

At the same time, she cautions against assuming every new development will perform well simply because it attracts more favourable tax treatment.

"New property will likely thrive, but investors will need to be cautious about overpayment risk, high outgoings, and compromised locations and zones."

Whether the next investment is an off-the-plan apartment, commercial property, a house-and-land package or a subdivision project, location, supply, quality, cashflow and a long-term investment horizon will be far more critical than any tax concession.

Over the past two decades, there has been a sharp drop in the number of young Australians owning property.

Homeownership among 35- to 44-year-olds fell from 76% in 1981 to 57% in 2021, according to the Australian Bureau of Statistics.

Why first-home buyers face less competition

The government's changes to negative gearing and capital gains tax in the recent Federal Budget make investing in property less attractive.

So instead of coming up against cashed-up property investors, first-home buyers are more likely to be competing for existing homes with others who are in the same boat.

Before the changes, property investors accounted for 40% of all new home loans.

Further increasing the availability of affordable homes to first-home buyers, the government has banned foreign property investors from purchasing existing homes in Australia until mid-2029.

How the 5% deposit scheme is helping buyers

Another measure to help first-home buyers is the 5% deposit scheme.

About 250,000 Australians have made use of this scheme, formerly the Home Guarantee Scheme, since it began in 2020.

The scheme has made it possible for 172,000 Australians to buy homes in urban areas, and more than 81,000 have purchased property in regional and remote Australia.

This is great news for first-home buyers. Owning a home offers financial security, and rent hikes over the past several years have been punishing.

While mortgage repayments eventually come to an end, paying rent goes on forever.

How higher interest rates cooled the property market

It's not just the government changes to negative gearing that have slowed down property prices.

Buyers have also been spooked by a string of interest rate increases.

My family and I have breathed a sigh of relief. The cooling property market not only takes some of the pressure off my adult children who want a toehold in the market, it helps parents wanting to fund adult kids into property.

These days there's almost an expectation to be the Bank of Mum and Dad and bankroll kids into property. And the average gift or loan from parents to adult children keeps rising too. I know parents who raided their superannuation, leaving their own retirement plans in tatters.

Or parents working into their seventies to help their 30-something children. Other parents have passed on their own inheritances to their children to give them a financial boost.

The growing role of the Bank of Mum and Dad

It surprises me how determined some parents are to get their kids into property.

One couple is considering giving their daughter and her young family their family home and buying a small unit in the same suburb to be close by.

Other couples sell the family home to move closer to their children because they can't afford to buy near their parents and they need help with childcare. It is common for adult children, and often their partners, to live with their parents for years so they can put rent money towards a home deposit.

For children without the support of a benefactor, housing and student debt can be a struggle, and this is where the 5% deposit scheme can make a difference.

What the negative gearing changes mean for investors

For anyone who is a fan of negative gearing, it still applies to newly built housing from July 1, 2027.

People sometimes overextend themselves with poor-quality investment properties simply to be eligible for a tax benefit from the government.

But negative gearing is only an advantage when interest paid is greater than net rental income. While the negative gearing of income is grandfathered under the government's changes, what isn't well understood is that future capital gains will now be taxed differently.

A tax offset for inflation now applies. But this is a minor discount over the short term.

Most of your capital gain will be taxable, so the investment arithmetic for a negatively geared investment changes.

A property investment needs to appreciate meaningfully in the future on a consistent basis to make it worthwhile continuing. If it goes backwards or flatlines, you've been paying a cash deficit with insufficient recovery from the capital gain after tax.

How to buy a home with just a 5% deposit

The government ramped up the scheme so that all first-home buyers can buy a home with a 5% deposit.

Single parents or legal guardians of one or more dependants can apply with a minimum 2% deposit.

Usually you need a 20% deposit to avoid paying lenders mortgage insurance (LMI), but the government guarantee means first-home buyers are exempt from paying LMI, saving them tens of thousands of dollars.

To be eligible, the property must be residential and its purchase price and property value must be at or below the location's price cap, which varies by state, city and regional area.

For example, if a first-home buyer pays $820,000 for a home, a 5% deposit is $41,000, instead of $164,000, which would be needed as a 20% deposit to avoid LMI.

The government has shaved more than $2.3 billion off LMI costs and taken years off the time it takes to get into a home.

The question is becoming increasingly relevant as more Australians approach retirement with mortgage debt still attached to their home.

Research based on ABS housing data found that 54% of homeowners aged 55-64 still had a mortgage in 2019-20, up from 23% in 2002-03.

Among Australians aged 65 and over, the share carrying mortgage debt rose from 4% to 13%.

"My experience, having paid off a mortgage twice, is it's great, but it feels like you're on a plane coming into land," says Serina Bird, author of How to Pay Your Mortgage Off in 10 Years.

"You touch down, feel that first bump and go: 'Wow, we've hit the ground, we've paid off the mortgage, it's all fine.' But then there's a few more bumps."

For Bird, those post-mortgage bumps are the major expenses that can suddenly arise later in life.

She says keeping a mortgage account open, rather than immediately discharging it, can provide an extra layer of financial flexibility when unexpected costs arise.

Is anyone actually paying off their mortgage completely?

Yes, but it's becoming less common as more Australians carry mortgage debt into retirement.

Vince Scully, co-founder and CEO of financial advice firm Life Sherpa, says it's a trend he's seeing among clients.

"I don't see that many people doing it," he says. "More people heading into retirement have guaranteed loans for their kids to get them into a house, and the banks take their house as security for that."

Even so, plenty of Australians are reaching the point where they've repaid their home loan and are deciding whether to formally discharge the mortgage or keep the facility open.

For these borrowers, reaching a zero loan balance raises a new question: should they formally discharge the mortgage, or keep the facility open for future flexibility?

And for some borrowers, financial advisers say discharging the mortgage may not be the best option.

"Generally, we would encourage people to not pay it off, particularly if they have a redraw or offset account and particularly if they're coming towards retirement and having to access credit," says Scully.

Should you discharge your mortgage after paying it off?

There is no one-size-fits-all answer. Whether you should discharge your mortgage after paying it off depends on how likely you are to need credit in the future, the costs of keeping the loan open and how much value you place on being completely debt-free.

Financial advisers say one of the biggest advantages is maintaining easy access to credit through redraw facilities or other lending arrangements.

For example, a homeowner who has spent two decades making extra repayments could have tens or even hundreds of thousands of dollars available through a redraw facility. Keeping the mortgage facility open could allow them to access those funds later for renovations, helping adult children into the property market or funding an investment purchase.

But Scully also acknowledges the benefit of hoisting off a mental load borrowers may have been carrying for decades.

"There's that feel-good factor, knowing that the bank's not on the top anymore and we should never underestimate the power of those sorts of psychological feelings."

Why some Australians keep their mortgage open

Paying off and discharging your mortgage can mean losing access to a relatively cheap and easy way to borrow money.

This is because your loan might have come with a redraw facility, a feature which gives you access to any repayments you made above the minimum required by your lender.

"You can draw that money out, usually at no charge, depending on the lender, to use for whatever purpose you like," explains Edwards.

Financial advisers say such facilities can give mortgage holders access to sizeable sums of money.

"If you think of somebody at 40 years old buying a family home and making additional payments along the way, at 55 or 60, they could have built up hundreds of thousands of dollars available to recall," explains Scully from Life Sherpa.

"You can do what you'd like with those funds, in terms of accessing or gifting them, if you want to gift them for helping kids out, or use them to purchase an investment property," adds Edwards.

What does it cost to keep a mortgage open?

Despite these benefits, Edwards notes that a mortgage with a low amount owing may still come with ongoing costs and obligations.

"Typically there's either account-keeping fees or, if your home loan is in a package with an offset account and a credit card attached, there'll be a package fee," she says.

"You also have to check with the lender whether, if there is zero balance showing, does that trigger a closure of the facility and is there a minimum balance that needs to be retained?"

How much does it cost to discharge a mortgage?

Savings expert Serina Bird warns going through the steps above will cost time and money.

"[Your bank] won't go: 'Congratulations, you paid off your mortgage. We're so happy for you, and here's the discharge form and we'll make it really easy!' You really have to chase them to get the discharge form and pay for it."

Financial advisers say bank fees to process a discharge and land titles office fees for searching and making changes to a Certificate of Title can add up to several hundred dollars.

Frequently asked questions

Does a mortgage automatically close when it's paid off?
No. In many cases you'll need to request a mortgage discharge from your lender.

Can you keep a mortgage open after paying it off?
Often yes, although your lender may impose fees or minimum balance requirements.

How much does it cost to discharge a mortgage?
Costs vary by lender and state or territory, but can total several hundred dollars.

What to do after you've paid off and discharged your mortgage

Banks urge anyone discharging their mortgage to consider what implications this might have for their insurance, estate planning and will.

Bird says it's also important to recalibrate your financial plans once the burden of the loan has been lifted.

"Often paying off a mortgage is a really big goal for people, it's something that really motivates them with their finances," she notes.

"So once you've achieved that goal, it's important to think about what comes next and what your next financial goal will be."

Reader question

Hi Paul, I have a question about a family farm under personal ownership (not in a trust or company structure).

It was bought before the 1985 capital gains tax exemption.

Would it now be impacted by capital gains tax if the owners sell it to fund their retirement? - Naomi

Paul's response

Hi Naomi, I can give you general guidance here, but you must speak with your tax adviser before making any decisions.

Farms can be quite complex from a tax perspective and require advice tailored to your personal circumstances.

There are several concessions that could mean you pay little or no CGT if you sell after July 1, 2027.

One is the 15-year small business CGT exemption. If you are aged over 55, retiring, and have actively operated the farm as a primary production business, you may be able to pay no CGT at all.

There are also other small business concessions, including the active asset reduction and the CGT retirement exemption.

In addition, the main residence exemption may apply to your home on the farm and the surrounding land used for private purposes, generally up to two hectares.

So yes, it is possible that a farm held in personal names could become partially taxable under the proposed rules if it is sold after July 1, 2027, assuming the legislation passes and is not altered by a future government.

In that situation, a valuation would typically be needed as at July 1, 2027. Any increase in value after that date could potentially be subject to the new CGT rules, with inflation taken into account when calculating the taxable gain.

As you can see, this is an area where professional tax advice is essential before taking any further steps.

What to read next

• Ask Paul: Who should inherit the family farm?
• Accountant vs financial planner: which expert do you need?
• Ask Paul: I invested in good faith, now the rules are changing
• Budget 2026: The changes you'll feel first
• What does the Federal Budget mean for your family trust?

On this episode of the Friends With Money podcast, Money's Tom Watson is joined by Arjun Paliwal, founder and chief executive of InvestorKit, to discuss the latest rentvesting developments.

Episode timestamps:

00:00 Introduction

02:43 Who is rentvesting used by?

04:15 The tax changes impacting rentvesting

06:02 Is rentvesting still worth it?

06:27 Sydney case study and numbers

12:04 The rentvesting decision checklist

15:34 How investors should adapt to policy changes

19:49 Final lessons for long-term investors

22:05 Conclusion

Listen to this episode of Friends With Money

Listen on Apple Podcasts

Listen on Spotify

Watch on YouTube for closed captions

Subscribe to Friends With Money

Subscribe wherever you get your podcasts

Friends With Money podcast FAQ

What is the Friends With Money podcast?

Friends With Money is a weekly personal finance podcast by Money magazine, offering expert insights on investing, budgeting, superannuation, property, and other money strategies for everyday Australians.

Where can I listen to the podcast?

You can listen on Apple Podcasts, Spotify, or YouTube (with closed captions available).

Who hosts Friends With Money?

Episodes are hosted by Vanessa Walker and Tom Watson from Money magazine, featuring expert guests and real conversations about money.

Is the podcast suitable for beginners?

Yes! It's designed to be accessible for beginners while still offering valuable insights for seasoned investors.

What topics does the podcast cover?

The Friends With Money podcast covers topics including banking, property, budgeting, superannuation, investing, saving, insurance, employment, travel and more.

How often are new episodes released?

New episodes are released weekly, so you can stay up to date with the latest financial tips and trends.

Can I watch episodes with captions?

Yes, full episodes with closed captions are available on YouTube.

Why subscribe to the Friends With Money podcast?

Boost your financial literacy anytime, anywhere with the Friends With Money podcast from Money magazine. Whether you're commuting, working out, or relaxing at home, this weekly podcast makes it easy to grow your money knowledge on the go.

Each episode dives into real conversations about money - how it's earned, shared, saved, and grown - with tips and insights that make finance simple and relatable. Perfect for beginners and seasoned investors alike, it's your go-to guide for building better financial habits.

Subscribe to the Friends With Money podcast today and start learning when it suits you.

The growing number of Australians struggling to become homeowners will welcome a report showing the regional hubs, many within commuting distance of major cities and with other positive economic features, that are more affordable options for first-home buyers.

It will also interest older people looking to buy a cheaper home to free up cash for a better retirement lifestyle, as well as investors who don't have the sums needed to invest in big cities.

Ten regional local government areas across Queensland, NSW, Victoria and Tasmania were designated as affordable buys in PRD Real Estate's 2026 Smart Moves: Regional Edition report.

Five criteria drove the report's findings: affordability compared to the state capital, sales and growth, rental yield, the local unemployment rate and planned development in the area. The full report is available at prd.com.au.

Looking beyond price was key to ensuring regions were viable for buyers, according to PRD chief economist Diaswati Mardiasmo.

These areas are turning into more sustainable and insulated economic hubs because of the commercial and infrastructure activity planned, she says.

And with more people now working some days a week from home, buying a house close to work is not as important as it once was.Purchasing in a regional area with job opportunities, infrastructure and lower prices also means lower debt commitments, adds Mardiasmo.

10 regional hotspots for property buyers

• NSW: Central Coast, MidCoast, Shoalhaven
• Victoria: Bendigo, Geelong, Casey
• Tasmania: Launceston
• Queensland: Cairns, Toowoomba, Ipswich
• Cheapest median house price: Launceston, Tasmania ($575,000)
• Most affordable compared with its capital city: Central Coast, NSW ($925,000 versus Sydney's $1.76 million median)

Affordable NSW regional property hotspots

The Central Coast LGA, north of Sydney, was one of the areas singled out. It offers houses at almost half the price of those in the capital, with a median house price of $925,000 at the end of 2025 compared with $1.76 million in Sydney.

It's a well-established coastal region, valued for its scenic beaches and surrounding national parks, with good road and rail transport links to Sydney and Newcastle.

Over a period of 10 years to 2025, the area recorded strong median house price growth of 76.2%, while remaining significantly more affordable than Sydney, according to the report.

"Over the past 12 months, median house prices increased by a modest 0.6%, contributing to a more sustainable environment for first-home buyers. However, with economic momentum building and limited housing stock, buying conditions may tighten as demand accelerates."

Two other NSW regions made the cut: the MidCoast LGA north of Newcastle, with a $750,000 median house price at the end of 2025, and the Shoalhaven LGA on the south coast, where the median house price sat at $865,000 in December 2025.

Shoalhaven's unemployment rate of 3.3% is below the Australian average of 4.2%.

"House sales increased by 18.5%, while median house prices rose by 2.5% over 2025. Despite this growth, median house prices remain approximately 50.8% more affordable than Sydney Metro, supporting continued buyer demand," says the report.

The MidCoast, renowned for its beaches, lakes and relaxed coastal lifestyle, recorded population growth of 4.3% over the past five years.

"This reflects its increasing appeal, particularly for retirement living, which remains a key driver of the local economy," the report says.

Victoria's affordable regional property markets

Three Victorian regions have been included: the Bendigo LGA, the Geelong LGA and the City of Casey LGA.

Bendigo, a former gold rush city in central Victoria, has the lowest median house price of the three at $610,000, compared with the Melbourne median of $1.11 million at the end of 2025.

Bendigo is accessible to Melbourne by rail and road within two hours.

"Investment conditions across the Bendigo LGA remain compelling," says the report.

Average rental yields were 3.9% for houses at the end of 2025, well above Melbourne Metro's 3%, while units achieved an average yield of 5.2%, also outperforming Melbourne Metro's 4.4%.

Known as Victoria's second city, Geelong offers great lifestyle options as well as houses with a median price tag of about $700,000, 37% less than Melbourne.

It's also only about an hour's commute to the capital by either road or rail.

The area offers first-home buyers and first-time investors low-cost entry into a proven growth location, says the report.

Casey, a major growth corridor south-east of Melbourne, recorded a median house price of $765,000 as at December 2025.

Spreading from the Dandenong Ranges in the north to the shoreline of Western Port in the south, it's Victoria's most populous municipality and has recorded high population growth of 11.4% over the past five years.

Major towns include Berwick, Cranbourne, Endeavour Hills, Hallam, Hampton Park and Narre Warren.

Launceston emerges as Tasmania's cheapest regional hotspot

The Launceston LGA, which includes Tasmania's second-largest city, offers the cheapest median of all the areas identified in the report, $575,000 at the close of 2025.

This is significantly less than in the capital Hobart, where the median sat at $767,451 in December 2025.

"A steady regional market with tightening supply conditions" is how the report categorises Launceston.

It recorded a falling unemployment rate in 2025 and house sales grew by 20.4%, while the median price rose 4.5%.

Over the 10 years to 2025, median house prices grew 115.4%.

Queensland regional areas offering lower house prices

Back on the mainland, Queensland has three of the most affordable areas.

On the far north coast, the Cairns region had a median house price of $745,000 at the end of 2025. In Toowoomba, an inland hub in the southeast, the median house price was $769,000, and in Ipswich, a major regional centre within the Greater Brisbane area, the median price reached $801,450.

At the same time, Brisbane's median was $1.17 million.

All these areas have recorded strong population growth over the past five years: 11.7% in Ipswich, 7% in Toowoomba and 5.1% in Cairns.

Apart from considering regional living as a way of getting a foothold in the property market, first-home buyers should make sure they are taking full advantage of any government schemes on offer.

Government schemes that can help first-home buyers

1. First Home Guarantee (5% deposit scheme)

Eligible first-time buyers can buy a home with a 5% deposit (2% for single parents) without paying lenders mortgage insurance (LMI). The government guarantees the rest.

LMI is a one-off, non-refundable fee charged by lenders when a borrower has a deposit of less than 20%, and it protects the lender, not the borrower.

For example, a first-home buyer purchasing an $800,000 home with a 5% deposit ($40,000) could pay about $31,000 in LMI without the scheme.

2. First Home Super Saver (FHSS) scheme

This allows voluntary contributions of up to $50,000 to superannuation, which can be withdrawn for a first home deposit, generally benefitting from the lower 15% tax rate on contributions.

3. Help to Buy scheme

A shared equity scheme where the government contributes 5% to 30% of the purchase price for existing homes, and up to 40% for new builds, reducing the mortgage size.

There are also various state and territory incentives such as the First Home Owner Grant, which is a one-off grant, typically up to $10,000, for buying or building a new home.

It is available across states and territories, with varying thresholds.

4. First Home Buyers Assistance Scheme

In NSW, this scheme offers full exemptions on stamp duty for existing homes up to $800,000 and vacant land up to $400,000, with reduced rates up to $1 million.

Many first-home buyers in regional NSW would be eligible for this assistance.

What are the real, often-overlooked costs of owning a home in Australia, and how can buyers avoid nasty surprises?

Owning a home is much more expensive than just paying the purchase price.

According to property writer Georgia Madden, new homeowners face steep mortgage interest, rising insurance premiums, energy bills, maintenance, council rates and, if buying an apartment, strata fees and surprise levies.

Many underestimate costs such as rebuilding insurance, ongoing repairs and the impact of interest rate rises. Smart strategies include reviewing insurance annually, fixing small problems early and checking apartment sinking funds before buying.

For first-home buyers and anyone budgeting for a home, missing these hidden costs can lead to financial stress, unexpected bills and even the risk of losing the asset.

Understanding the full picture means you can plan, save and protect your investment, rather than being caught out by a "budget sinkhole".

Episode timestamps:

01:31 Mortgage breakdown: interest vs equity

02:46 Insurance: costs and common mistakes

03:59 Energy bills and efficiency tips

04:55 Solar: upfront costs and payback

05:45 Maintenance: how much to set aside

06:51 Hidden repair costs: plumbing, wiring, roofing

07:51 Council rates and water charges

08:37 Strata fees and apartment levies

09:47 Cautionary tales and advice for buyers

10:16 Wrap-up and where to find more info

Listen to this episode of Friends With Money

Listen on Apple Podcasts

Listen on Spotify

Watch on YouTube for closed captions

Subscribe to Friends With Money

Subscribe wherever you get your podcasts

Friends With Money podcast FAQ

What is the Friends With Money podcast?

Friends With Money is a weekly personal finance podcast by Money magazine, offering expert insights on investing, budgeting, superannuation, property, and other money strategies for everyday Australians.

Where can I listen to the podcast?

You can listen on Apple Podcasts, Spotify, or YouTube (with closed captions available).

Who hosts Friends With Money?

Episodes are hosted by Vanessa Walker and Tom Watson from Money magazine, featuring expert guests and real conversations about money.

Is the podcast suitable for beginners?

Yes! It's designed to be accessible for beginners while still offering valuable insights for seasoned investors.

What topics does the podcast cover?

The Friends With Money podcast covers topics including banking, property, budgeting, superannuation, investing, saving, insurance, employment, travel and more.

How often are new episodes released?

New episodes are released weekly, so you can stay up to date with the latest financial tips and trends.

Can I watch episodes with captions?

Yes, full episodes with closed captions are available on YouTube.

Why subscribe to the Friends With Money podcast?

Boost your financial literacy anytime, anywhere with the Friends With Money podcast from Money magazine. Whether you're commuting, working out, or relaxing at home, this weekly podcast makes it easy to grow your money knowledge on the go.

Each episode dives into real conversations about money - how it's earned, shared, saved, and grown - with tips and insights that make finance simple and relatable. Perfect for beginners and seasoned investors alike, it's your go-to guide for building better financial habits.

Subscribe to the Friends With Money podcast today and start learning when it suits you.

The Minns government has announced a $16 million package of asbestos reforms, including a two-year trial that will offer free household asbestos collection and disposal from next year.

The initiative forms part of the new NSW Asbestos Plan of Action, developed in response to recommendations from the NSW Chief Scientist's review into asbestos in the waste stream.

Environment Minister Penny Sharpe says the reforms aim to reduce illegal dumping, improve worker safety and make it easier for families renovating older homes to dispose of asbestos correctly.

"One in three houses built before 1990 contains asbestos - that's why it's important to make it cheaper and easier for NSW families to dispose of these materials," Sharpe says.

"To avoid the looming waste crisis in NSW, we need to increase resource recovery and reduce barriers to safely disposing of problematic waste types, like asbestos."

The government says illegal dumping costs councils millions of dollars each year, with asbestos waste frequently found among dumped materials because of disposal costs and confusion about where it can legally be taken.

Here's what the new scheme means for homeowners, and how to identify, manage and safely dispose of asbestos when renovating.

Free asbestos disposal trial: what homeowners need to know

Under the reforms:

• NSW is investing $16 million in asbestos management initiatives.
• $9 million will fund a two-year free household asbestos collection and disposal trial.
• The service is expected to begin next year.
• New controls, training requirements and supply-chain safeguards will be introduced across the asbestos waste sector.
• The reforms aim to reduce illegal dumping and improve safety for workers and the community.

The NSW Asbestos Plan of Action is available on the EPA website.

"We're acting upon recommendations to tighten the entire supply chain - making sure it is safer for workers, better for industry and trusted by the community," says Sharpe.

Why asbestos remains a major concern

Asbestos may have been banned, but it remains present in millions of Australian homes.

In fact, the NSW government says one in three homes built before 1990 is estimated to contain asbestos-containing materials.

Kim Brislane, chief executive of the Asbestos and Dust Diseases Research Institute, says the health risks remain significant.

"Over 4000 Australians die each year from historical exposure to asbestos so we must be vigilant about the risk of asbestos and take precautions when it is detected in the workplace or the home."

When asbestos-containing materials are disturbed, microscopic fibres can become airborne and be inhaled, increasing the risk of serious diseases including mesothelioma, asbestosis and lung cancer.

What is asbestos and why is it dangerous?

Asbestos is a naturally occurring mineral made up of microscopic fibres.

It was widely used in more than 3000 building products throughout the 20th century because it was cheap, durable and resistant to heat and fire.

While sealed asbestos in good condition generally presents a low risk, problems can arise when materials are damaged, deteriorate with age or are disturbed during renovations.

How can I tell if my home contains asbestos?

If your home was built or renovated before 1990, there's a reasonable chance asbestos may be present somewhere on the property.

Common locations include:

Inside the home

• Wall and ceiling sheeting
• Bathroom linings
• Vinyl floor tiles and adhesives
• Carpet underlays
• Insulation
• Fireplace flues
• Lagging around hot-water pipes

Outside the home

• Fibro wall sheeting
• Roofing
• Eaves
• Fencing
• Gutters and downpipes
• Garages and sheds
• Concrete paths

What does asbestos look like?

Asbestos cannot usually be identified by appearance alone.

Fibro sheeting, old vinyl floor tiles, roofing and insulation may contain asbestos, but laboratory testing or professional assessment is often required for confirmation.

Is asbestos always dangerous?

Not necessarily.

Asbestos in good condition that remains sealed and undisturbed is generally considered low risk.

The danger increases when asbestos-containing materials are:

• Cut
• Drilled
• Sanded
• Sawed
• Demolished
• Scraped
• Broken
• Weathered and deteriorating

These activities can release fibres into the air, creating a health risk for anyone nearby.

Should I get an asbestos inspection before renovating?

If you suspect asbestos is present, experts recommend arranging an inspection by a licensed asbestos assessor.

An asbestos identification report can help determine:

• Whether asbestos is present
• What type of asbestos-containing material is involved
• Whether removal is necessary
• How it can be safely managed

For buyers considering an older property, an asbestos inspection before purchase may help avoid costly surprises later.

Can I remove asbestos myself?

In most Australian states and territories, homeowners can remove up to 10 square metres of non-friable asbestos themselves.

However, stricter rules apply to larger quantities and higher-risk materials.

• Friable asbestos must be handled by licensed professionals.
• Larger quantities generally require a licensed asbestos removalist.
• Disposal requirements vary depending on where you live.

Before attempting any DIY removal, check the rules that apply in your state or territory and consult SafeWork guidance.

How much does asbestos removal cost?

The cost of asbestos removal depends on:

• The amount of asbestos involved.
• Whether it is friable or non-friable.
• Ease of access.
• Removal and disposal requirements.

For NSW homeowners, the new free collection trial could significantly reduce disposal costs and remove a major barrier to legal disposal.

How to stay safe during renovations

If your home may contain asbestos:

• Have suspect materials assessed before renovation work begins.
• Use licensed removalists where required.
• Follow all disposal requirements.
• Keep asbestos materials sealed and undisturbed if they are in good condition.

Do not:

• Cut asbestos-containing materials.
• Drill asbestos-containing materials.
• Sand or saw asbestos-containing materials.
• Pressure-clean asbestos surfaces.
• Place asbestos in household rubbish bins.
• Dump asbestos waste illegally.

The bottom line

The NSW government's new free asbestos collection and disposal trial could make renovating older homes safer and more affordable.

But while the new service may reduce disposal costs, the health risks associated with asbestos remain unchanged.

With one in three pre-1990 homes estimated to contain asbestos, identifying the material early and handling it correctly continues to be one of the most important steps homeowners can take to protect themselves, their families and tradespeople working on their property.

When you're buying a place to live in, emotions are everywhere. That's completely understandable. The goal is not to switch off your emotions, but to make sure they're not the ones driving the car while your logic is tied up in the boot.

Once you've named the emotional traps, you can start to build a proper strategy for buying a home to live in.

Here are five common emotional traps owner-occupiers fall into and how to avoid them.

1. The dream home myth (and the 'forever home' fantasy)

Most first-home buyers secretly want their first home to tick every box. Light, bright, renovated, close to everything, quiet street, great neighbours, north-facing backyard, walk-in pantry, subway tiles and of course 'future-proofed'.

The reality is, though, that your first home may not be perfect. You might get most of your needs met and only some of your wants. That's not failure, that's normal.

Having a detailed dream home in mind can create a few problems.

You might overstretch your budget and box yourself into stressful repayments, or delay buying for years, waiting for something 'perfect' while prices and rents keep moving.

You might talk yourself out of good, solid options because they are seven out of 10 instead of a mythical 12 out of 10.

We strongly encourage you to remove the phrase 'forever home' from your vocabulary for now. It piles on unnecessary pressure.

You don't need to lock in the perfect home for every version of your future self, you just need a home that works well for you for the next reasonable season of life.

2. Fear of making a mistake

Fear is one of the strongest emotions you'll feel when buying a home. Fear is normal, but it's not a great decision maker.

The antidote to fear is good data and clear criteria.

There's a reason the old acronym for fear is 'false evidence appearing real'. Your job is to replace false evidence with real evidence.

Fear can look like:

What if I buy in the wrong place?

Spend time in the suburb, talk to locals, walk the streets at different times of day. Look at school catchments, access to transport, flood maps and council plans.

If you turn up and next door has three abandoned cars in the front yard and a lawn that hasn't been mowed since 2014, that's useful evidence.

What if the market falls?

When you buy an owner-occupied home, your primary driver is security and lifestyle, not short-term speculation.

Property values will rise and fall in the short term, but you're not buying to hold for three years then flip. You're buying a stable base for your life.

What if there's something wrong with the property?

That's where due diligence comes in.

Building and pest inspections, strata reports, checking council records and having a good conveyancer are all about turning fear into facts.

For now, remember: don't ignore red flags and don't skip checks because you're 'too in love' with the house.

3. Comparing yourself with others

This is especially common for first-home buyers. Comparison will try to sneak into every part of your home-buying journey.

It might be friends who bought years earlier in a nicer suburb.

It might be family members who keep reminding you what they paid for their first home in 1994.

It might be social media feeds full of perfectly styled homes that don't even look lived in.

The trouble with comparison is that you don't know how much help they had from family, how much debt they're carrying behind the scenes, or what compromises they made elsewhere in their life to get there.

Your job is to build a life on your terms, not to recreate someone else's highlight reel.

If you're in a relationship, you both need to be strong on this. Decide together what's right for your values, your budget and your lifestyle, and stay in your lane.

4. Emotional pressure from family

Family can be one of the biggest emotional influences on your first-home purchase.

It may come from a good place, but can still be unhelpful.

Your parents or extended family may have bought in a completely different era, with different prices, different interest rates and very different expectations about what a 'proper home' looks like.

They might insist that you 'must' buy a three-bedroom brick home on a big block because they would never have bought an apartment or a townhouse.

Their reality is not your reality.

Today, many buyers can't afford to live close to family and buy a huge family home right off the bat.

You might need to move further out, buy a smaller place, choose a townhouse or unit, or live somewhere different from where your parents think you 'should' live.

Listen respectfully, but remember you're the one making the repayments.

Advice that ignores your actual numbers and your strategy is not advice you have to take.

5. Falling in love too fast

Falling in love with a property is incredibly common.

You walk in, the sun is streaming through the kitchen window, there's a pot of basil on the bench, someone's baked bread, the styling is immaculate and suddenly you're saying things like, 'I could see us here forever'.

That feeling isn't the enemy, but it does need boundaries.

When you lead with emotion, it becomes much easier to overlook red flags, push your budget beyond what's actually comfortable, or compromise on things that genuinely matter, all in the name of 'this feels right'.

As a general rule, Mercury and Venus don't need to align when you inspect your first property.

In fact, it's usually better if they don't.

This is an edited extract from The Quick-start Guide to Your First Property: Pick up your keys simpler, smarter and sooner by Glen James & Rachelle Kroon (Wiley, $34.95). Enter now for your chance to win one of five copies!

The Australian government is backing a Greens' policy to put a stop on self-managed superannuation funds (SMSFs) from purchasing residential properties with any capital assistance, arguing the sector is currently gating nearly two million properties from first homebuyers.

What is changing for SMSF property investors?

The Greens are backing amendments that would ban self-managed super funds from using limited recourse borrowing arrangements (LRBAs) to purchase residential property.

An LRBA protects the SMSF as a whole by safeguarding other assets held by the SMSF from the lender if the loan defaults.

Aiming to pass the bill in the coming fortnight, it described the act as an exploitation of a "loophole" where investors use SMSFs to buy up tax-advantaged properties and proposed to remove ministerial discretion that would allow a minister to wind back these reforms.

However, the Greens argue grandfathering existing arrangements will allow investors to continue benefiting from tax concessions and leave around 1.7 million properties in investor hands rather than making them available to prospective first-home buyers.

Greens say reform will help first-home buyers

Greens leader Larissa Waters criticised Labor's "low ambition" to fixing the housing crisis.

"... by grandfathering in wealthy property investor tax perks Labor has once again chosen to put the 1% over the millions of people trying to buy their first home," Waters says.

"Backing this bill puts an end date on these tax breaks - but Labor's low ambition means that inequality and the housing crisis will be worse for longer. This enduring housing crisis will now be squarely of Labor's design.

"We are glad that the government has listened to some of the concerns raised through the inquiry process by the Greens and experts, but Labor has again ignored young people and renters."

Meanwhile, Greens senator Nick McKim added while the government is making small steps in the right direction, it has missed a "generational opportunity" to fix the burgeoning housing pressure.

"After four years in government and multiple failures to act, Australia's housing crisis is now Labor's housing crisis," McKim says.

"Labor has chosen to skew this package to benefit wealthy property investors in every way they can. They have delayed relief for renters, pulled up the ladder on first homebuyers, and let the 1% keep $33bn in tax breaks."

In response, SMSF Association chief executive Peter Burgess was disappointed in the decision, claiming that LRBAs pose "no material risk" to the super system under appropriate circumstances.

"Banning LRBAs for residential property represents a clear departure from nearly two decades of settled policy. If property spruikers and high-pressure sales tactics are the issue, the answer is to target that conduct directly and not trade away LRBAs investing in residential property just to secure passage of their Federal Budget tax measures," Burgess says.

"LRBAs are a legitimate investment tool that, when used appropriately and under existing regulatory safeguards, allow individuals to invest in assets through their self-managed superannuation fund that they may not otherwise be able to do.

"The problem is not the borrowing structure itself, but the conduct of those who aggressively market unsuitable property investments and make unrealistic claims about returns and retirement outcomes."

Burgess also highlighted a consultation on the reforms should be launched, and a grandfathering provision should be on offer as many investors and SMSFs have planned their investments based on the existing rules.

"Many investors and SMSF trustees have made legitimate financial commitments based on the existing rules. Any changes to LRBA rules should include appropriate consultation and grandfathering provisions or a substantially longer implementation period to ensure investors are not left high and dry midway through a significant financial commitment," Burgess added.

Will existing SMSF property investments be affected?

Meanwhile, SMSF Alliance managing director David Busoli echoed Burgess' concerns, stating the change represents another "broken promise" from the government.

"The Greens have been implacably opposed to SMSFs generally and limited recourse borrowing in particular, even though the use of LRBAs has been, in the main, appropriate and a legitimate vehicle for superannuation members, including younger members, to save for their retirement," Busoli says.

"Also, demonstrably, the effect on the availability of homes for new home buyers has been negligible.

"The change will not be retrospective and will not affect existing contracts or, presumably, those entered into before the measure becomes law though details are yet to clarified."

This article first appeared on Financial Standard

This week on the Friends With Money podcast, Money's editor-in-chief Michelle Baltazar speaks with Justin Blaess, principal and portfolio manager at REIT specialist Quay Global Investors, to explain real estate investment trusts (REITs) and how investors can earn investment income through them.

They discuss REITs as listed businesses that own buildings and collect rent, how the sector has evolved since the late 1990s and the GFC, and new opportunities beyond traditional retail, office and industrial property.

Episode timestamps

01:05 What Is a REIT?

01:48 How REIT investing evolved

03:29 Investment hotspots: data centres, storage and senior living

05:59 Expected returns basics

09:34 Interest rates myth

12:43 How to start investing

Listen to this episode of Friends With Money

Listen on Apple Podcasts

Listen on Spotify

Watch on YouTube for closed captions

Subscribe to Friends With Money

Subscribe wherever you get your podcasts

Friends With Money podcast FAQ

What is the Friends With Money podcast?

Friends With Money is a weekly personal finance podcast by Money magazine, offering expert insights on investing, budgeting, superannuation, property, and other money strategies for everyday Australians.

Where can I listen to the podcast?

You can listen on Apple Podcasts, Spotify, or YouTube (with closed captions available).

Who hosts Friends With Money?

Episodes are hosted by Vanessa Walker and Tom Watson from Money magazine, featuring expert guests and real conversations about money.

Is the podcast suitable for beginners?

Yes! It's designed to be accessible for beginners while still offering valuable insights for seasoned investors.

What topics does the podcast cover?

The Friends With Money podcast covers topics including banking, property, budgeting, superannuation, investing, saving, insurance, employment, travel and more.

How often are new episodes released?

New episodes are released weekly, so you can stay up to date with the latest financial tips and trends.

Can I watch episodes with captions?

Yes, full episodes with closed captions are available on YouTube.

Why subscribe to the Friends With Money podcast?

Boost your financial literacy anytime, anywhere with the Friends With Money podcast from Money magazine. Whether you're commuting, working out, or relaxing at home, this weekly podcast makes it easy to grow your money knowledge on the go.

Each episode dives into real conversations about money - how it's earned, shared, saved, and grown - with tips and insights that make finance simple and relatable. Perfect for beginners and seasoned investors alike, it's your go-to guide for building better financial habits.

Subscribe to the Friends With Money podcast today and start learning when it suits you.

The RBA has held the cash rate at 4.35%, but Aussie homeowners may still be able to cut their mortgage repayments by negotiating a lower home loan rate or refinancing to a cheaper lender.

The decision, announced at the June board meeting in Sydney, marks the first pause this year after earlier rate hikes in February, March and May, leaving interest rates at their highest level since November 2011.

While there's no immediate relief from the Reserve Bank, borrowers don't have to wait. Many households are still paying above current market rates and could reduce their interest rate and monthly repayments by asking their lender for a better deal or switching loans.

How much could a lower rate save you?

Homeowners can still cut their own rates

Even without a fresh hike, many mortgage holders are already paying significantly more than they were at the start of 2026.

On an average home loan of $736,000, monthly repayments have jumped by about $342 following earlier increases, according to Compare the Market.

"That's in after-tax dollars, meaning you need to earn roughly $6000 more a year to cover it," says David Koch.

The upside is borrowers don't have to wait for the RBA to move. Many can reduce repayments right now by negotiating with their lender or refinancing to a cheaper deal.

How to land a lower rate

Two key options can help borrowers claw back savings:

1. Ask your lender for a discount

"Everyone should be calling their bank or broker," Koch says.

"We still see borrowers paying above 7%, even though rates in the high 5% and low 6% range are available."

Even small cuts can make a difference, potentially saving hundreds each month and thousands over time.

Competition remains fierce, with refinancing activity up 18.7% over the past year, giving borrowers leverage.

Successful negotiations can deliver cuts of 0.10% to 0.50%, or more for strong borrowers.

2. Consider refinancing

If your lender won't move, switching can unlock sharper rates and better features.

Borrowers often only get serious retention offers when they are about to leave, but banks typically match competitor rates rather than beat them.

Looking beyond the major banks, some lenders are offering rates below 5.9%, with the sharpest deals around 5.84%.

Refinancing does come with costs, including exit fees and government charges, so weigh up the total benefit.

Who is most likely to get a better deal?

Borrowers with lower loan-to-value ratios are in the strongest position to negotiate or refinance.

For example, some lenders are offering sub-6% rates to borrowers with LVRs below 50% to 60%.

Traps to avoid

Focus on the comparison rate, not just the headline rate.

Be careful refinancing doesn't reset your loan term back to 30 years, which could increase total interest paid. If you're five years in, request a 25-year term.

Will rates fall in 2026?

For now, most forecasts suggest borrowers shouldn't expect relief anytime soon.

RBA governor Michele Bullock said a further rate rise remains on the table.

"If we need to increase again, we will," she says.

A Finder survey found 37% of economists expect the cash rate to rise further to 4.60% by year end, while 30% expect it to stay at 4.35%.

Major banks including CBA and NAB expect rates to hold through 2026 before cuts in 2027, although Westpac still predicts hikes later this year.

For borrowers, that means taking action now may be the fastest way to get relief.

In Australia, most properties are sold through real estate agents who charge the seller a commission for their services.

Fair enough. It's that agent's job to find a buyer at the maximum possible price.

But if you are a buyer, that job is in direct conflict with what you want.

While the real estate agent selling the property may seem helpful and friendly, they are not acting in your best interests. In fact, it would be a breach of their obligations to the seller if they were.

Buyers, in the main, go through the demanding process of acquiring a property on their own, with assistance from a conveyancer only after the purchase has been made.

Does this sound like an uneven playing field?

That's where buyers agents come in.

They are licensed agents who are employed by the buyer rather than the seller.

While only about 3% of properties bought in Australia involve a buyers agent, their use is increasing.

How a buyers agent can save you thousands

Apart from having someone in your corner, a good buyers agent can do much more to ensure your purchase is successful.

For starters, they should have a good idea of what properties are worth in a particular market.

A good buyers agent can work with you to identify what you want, set your budget and identify properties that fit your requirements.

They can assess the property so that you don't have to waste your valuable weekends inspecting places that sound good but don't fit your needs.

They can help with the due diligence on a property - coordinating building inspections, and survey and engineering reports.

They can also research potential issues such as zoning, nearby developments or other matters that could affect the property.

Increasingly, Australian investors are prepared to look outside their own area, investing interstate or in a different part of their State.

Using a local buyers agent who understands that market can ensure you are getting good local information.

As real estate laws are State-based and may be different from what you're used to, buyers agents can help help you avoid costly mistakes.

They can also have relationships with developers and real estate agents, which may give them early access to suitable properties or off-market opportunities.

Buyers agents can negotiate on your behalf or bid at auction if you are unsure of doing it yourself.

They can also work with you to ensure that you have everything lined up before purchasing, so you don't risk losing the right property when it comes along.

What you'll pay - and whether it's worth it

As with agents acting for sellers, fees can vary.

According to the Real Estate Buyers Agents Association of Australia (REBAA), for the full service - searching for a suitable property, inspection, due diligence and negotiation - the industry average fee is between 2% and 3% of the purchase price, plus GST and an engagement fee to get started.

Some can charge a flat fee based on the purchase price and an engagement fee.

If you only want to use the buyers agent for specific tasks, such as negotiating on a property you have found yourself or attending an auction on your behalf, the fees can be tailored to suit.

Red flags that could cost you

Because real estate legislation is State based, any buyers agent you use should be licensed to operate in the domain that you're looking to buy in.

Some buyers agents are national but still need to be licensed by the relevant State.

You can check that they are licensed and have insurance through the State's fair trading office (or equivalent).

According to the REBAA, you should also make sure the agent is acting for you and not getting a kickback from developers or other agents.

It says its members are exclusive buyers agents, which means they only act for the buyer.

It recommends you look at a prospective buyers agent's website to see if they sell real estate and question them about possible commissions.

It's also worth paying close attention to fees.

There is an argument that a commission-based fee, while common, isn't in your best interest because it creates a disincentive for the agent to negotiate the lowest possible price.

Some agents will cap the final amount as a percentage of the lower end of your budget.

Or you may agree on a fixed fee.

The REBAA says it has also seen a rise in 'volume-based' buyers agents who are more interested in collecting upfront payments from clients than genuinely trying to fulfil their brief.

"I heard of a sales agent who received a 'shopping list' from a volume buyers agent, which simply outlined the types of properties they needed to satisfy the dozens of clients they were supposedly representing," says REBAA president Melinda Jennison.

"Buyers probably have no idea that the person they have already potentially given thousands of dollars to is doing very little work on their behalf and is often just approaching sales agents to see what listings they have on their books."

She says one of the most important questions to ask is how many buyers the agent currently represents. They should work with a limited number of clients.

"[And] working with clients who have the same briefs is unethical, because how on earth would they determine which buyer deserves which property - unless it was influenced by who has paid the highest fee or who is prepared to make the quickest decision," she says.

"Consumers should also ask how a buyers agent sources properties for their clients, with a big, red flag being those who say it's always 'off market'.

This is not only highly unlikely, but those properties often require a premium to be paid."

Did you know?

In the US, sellers have typically paid two commissions - one for selling the property and another for dealing with the buyer.

Changes will now require buyers to pay their own commissions.

Best-case: what you gain

In many ways, having someone squarely on your side in a property transaction can have benefits - whether it's convenience, negotiating experience, property appraisal or just guiding you through this major investment.

Worst-case: when it backfires

The potential downside is that the wrong buyers agent could end up costing you more for little or no benefit.

What is the wild card?

Demand for buyers agents depends to some extent on the state of the property market.

They are more likely to be used in a heated market when finding and securing a desirable property is harder.

It's the worst-case scenario: you're unable to continue making your mortgage repayments so your lender sells your home to cover the outstanding debt.

Fortunately, the vast majority of homeowners won't ever find themselves in this situation, but with interest rates expected to tick up and rising inflation putting pressure on everyday expenses, it might become a reality for more people.

Nearly 1.5 million mortgage holders were at risk of mortgage stress in the three months to April, Roy Morgan research shows - a figure which is likely to rise if rates keep heading north.

So what actually happens if you fall behind on your home loan? Here's how the process can escalate, and what you can do early to avoid losing your home.

Can going into negative equity put your home at risk?

Owing a bank more than your property is worth (negative equity) isn't ideal - but it's a situation more owners could find themselves in if prices in some parts of the country drop.

Commonwealth Bank's most recent forecast, for one, suggests that home values in Sydney (-6%) and Melbourne (-7%) will fall over the remainder of 2026.

"A buyer who purchased with a 5% deposit at the start of this year has very little buffer against falling property prices," says Sally Tindall, data insights director at Canstar.

"If CBA's forecasts play out, some recent buyers in Melbourne could owe the bank more than their home is worth by the end of the year, despite making their mortgage repayments on time."

The major downside of negative equity is that if you're forced to sell, you'll need to cover any shortfall between your loan and the sale price.

"Negative equity isn't necessarily a crisis if you plan to stay put and keep making repayments, but it can become a major problem if you're forced to sell or want to refinance," Tindall explains.

"If you do find yourself in this position, don't panic. Instead, put your head down and keep your mortgage repayments up."

Missed a mortgage repayment? Here's what to do next

While missing a mortgage repayment isn't recommended, it's not the end of the world.

Plenty of people do it by mistake, though depending on how long it takes to fix it, you may be charged a late payment fee and end up with the missed payment on your credit report.

If you miss a payment because you don't have the money to cover it, lenders recommend contacting them as soon as possible and being upfront about your situation.

There are likely options available says Tom Abourizk, a senior policy officer at the Consumer Action Law Centre, including financial hardship support.

"Don't be afraid to ask for hardship assistance from your bank.

"A long-term deferral of a payment or a waiver of one month's payment might make a big difference, and it's probably in the bank's interest to strongly consider that at the very least."

How many mortgage repayments can you miss before default?

If you can't rectify one or more missed payments, that's when the formal default process may begin.

"The first step in terms of the legal process is that a default notice will be issued," Abourizk explains.

"Default notices have to quite clearly set out that you're in default of your home loan, how you can fix it, what can happen if you fail to fix it and also provide a timeline for how long you have to fix it.

"I believe the standard is normally 30 days that they must provide at a minimum."

At this point, Abourizk recommends that anyone who receives a default notice considers lodging a dispute with the Australian Financial Complaints Authority (AFCA).

Beyond being able to raise any relevant concerns, repossession (they next potential step) can't go ahead until AFCA's assessed the dispute.

"An ombudsman would go through a process of exploring the options between them [the homeowner] and the bank to see if there is a way for them to retain their house, or at the very least, double-check that the bank is doing everything legally and reasonably."

When can a bank repossess your home?

Failing an AFCA resolution or a remedy for the default, that's when a lender can begin the process of repossessing the property.

"To start repossession proceedings, banks generally need to go to court, so that would require formal written notice," Abourizk says.

"The person who receives that notice then has ten days to file an appearance, and they then have 30 days to file a defense if they want to do that."

If the court allows the repossession to go ahead, the lender is then likely to go to the sheriff.

"The sheriff would normally go through a two-step process where they notify the person that they have received the writ and will give them a date that they need to vacate by."

Can a bank repossess your home after one missed repayment?

No. In most cases, a lender will contact a borrower about missed repayments and may offer hardship assistance before taking further action.

Repossession is generally a lengthy process involving default notices, opportunities to catch up on repayments and, in most cases, court action.

How to manage mortgage stress before it gets worse

Repossession is a worst-case scenario. There are actions that homeowners - including those feeling the strain of rising mortgage repayments - can take long before that happens though.

Deb Shroot, a financial counsellor and industry liaison at Financial Counselling Australia, says that the first step for homeowners should be assessing their financial position.

"Work out how much you can afford and the maximum you can afford if rates do go up. Knowing what that amount is can be really useful so that you can quantify and track how you are, versus what you need to pay.

"You could also start either paying extra or putting any excess aside so that you do have a bit of a buffer if things get a bit tight.

"And if your plan includes refinancing, don't wait until you are unable to make your payments before looking at doing it."

Should you prioritise your mortgage over other debts?

Though mortgage repayments may be the largest cost for homeowners, Shroot also reinforces the point that other property-related expenses shouldn't be neglected.

"It's not just your mortgage that's really important, but also your strata and rate payments.

"Strata and rates are bound by either by-laws or legislation, so if you fall behind on these there's not the same flexibility of hardship that's available with commercial loans."

A home loan isn't going to be the only debt some households are paying off either, so how should a mortgage be prioritised?

"It depends on the individual, because everyone's finance ecosystems and value systems are different," Shroot says.

"Housing is a need, however, owning your house is not the only option.

"For example, someone might value continuing to send their child to a private school, so they might sell up and rent, whereas someone else would put their kids in a public school."

How can Australians access financial help?

One bright spot for anyone struggling with mortgage stress is that support is available. That includes hardship assistance from a lender or support from a financial counsellor.

"The options are going to depend on a number of factors, including how much equity you have in your home, how big your repayments are, whether you've accessed hardship before and whether you have other debts.

"So, there's really no one-size-fits-all type of solution," Shroot says.

That's why Shroot recommends reaching out to a financial counsellor who can provide advice which is catered to an individuals' situation, values and priorities.

"Financial counsellors can provide free, independent and confidential advice to help you work through the best options and the next steps forwards for your situation.

"There might also be flow-on consequences from someone's decisions, so we'll be able to discuss the consequences of choosing to pay your mortgage over your rates, or the other way around, and the pros and cons of doing that."

To speak to a financial counsellor you can call the National Debt Helpline on 1800 007 007, or you can find a counsellor in your local area or to fit your specific needs by visiting the National Debt Helpline's find a financial counsellor portal.

Reader question

Hi Paul, I have four adult children but only one still lives in our hometown.

I live on a large block and my daughter and her husband were struggling to afford a house and land package, so I subdivided my block and gifted them a piece of land to build their first home.

Now my other children are upset that I only helped one child. They are asking me to buy each of them a block of land.

Paul, I can't afford land in Sydney or Melbourne. I was proud to be able to help out my daughter. She has stayed close to home in our small town and always lends a hand when I need it.

I am close to retirement and have enough if I am careful, but expensive blocks of land certainly aren't in my budget.

How can I make this right with my other kids even if I can't make it exactly fair? Thank you for your advice. - Pete

Paul's response

Darn. The best time for us to have had this chat, Pete, was before the decision to help your daughter.

It is a real shame, but when it comes to family harmony, money is one of the issues that causes the most disruption, in particular 'early inheritance' gifts.

Few could afford a block of land in Sydney and Melbourne. To be quite frank, I think your children in these big cities are being unreasonable. I can see you want to resolve the situation and I do get fairness when it comes to financial gifts and inheritance.

A good solution may be to look at the value of your gift. You mention you live in a small town; the land you subdivided may not be a big dollar amount.

You could have the subdivided block of land valued at the time of your death, and this value is attributed to your daughter, meaning the other three kids get a larger amount from the estate. Your own financial security in retirement comes first.

Your call. But for me the solution would be to explain the low cost.

I'd also be transparent about the fact that like pretty much every near retiree, the money is not there for capital.

What the other three kids is requesting is unfair.

A block of land subdivided by you is not equivalent to a city block of land. It may be that this can be resolved via your estate; a chat with your solicitor could be very helpful.

What to read next

• Ask Paul: Should we leave our kids unequal inheritances?
• Estate planning and wills: How to protect your assets
• How to plan your countdown to retirement
• Ask Paul: My wife won't stop giving our adult kids handouts
• How to best give away an early inheritance

Buying a strata property can be a minefield, but the biggest risks are often hidden until it's too late.

In NSW, with one-third of all strata developments in Australia, 53% of strata buildings have reported serious defects in common property, according to a 2023 survey by the Office of the Building Commissioner and Strata Community Association of NSW (SCA).

The most prevalent defects are related to waterproofing, fire safety systems, structural issues, building enclosures and, increasingly, building services such as lifts and plumbing.

Mixed-use can quietly drive up your costs

Problems with strata living or investing can be compounded if the strata you buy into is also part of a mixed-use development, for example shops below and apartments above, and is governed by a building management statement (BMS) or a strata management statement (SMS).

These documents regulate shared areas between different entities, setting out how they will be managed and funded.

A building management committee (BMC) is the body responsible for carrying out the rules set out in the SMS or BMS and is made up of representatives from each of the different schemes.

The very nature of a mixed-use complex indicates a plethora of interests, including the residential owners or tenants, the commercial landlords (often the original developers), the commercial tenants, local authorities, customers and visitors, generally, according to legal firm Bannermans, which specialises in construction, strata and property development law.

"The potential for conflicts between these often-competing needs and interests is very real."

Mixed-use developments are becoming more common, says David Glover, managing director of the owners corporation network (OCN).

And the problem with many BMSs is that they are drafted by the developer and registered before residents move in.

Strata jargon, decoded

BMS (Building Management Statement)
Rules for how shared spaces between residential and commercial areas are managed and paid for

SMS (Strata Management Statement)
Similar to a BMS, used in multi-layered strata developments

BMC (Building Management Committee)
The group that makes decisions about shared areas and costs

SCA (Strata Community Association)
Industry body representing strata managers and stakeholders

Why apartment owners often foot the bill

"Decisions made at development approval stage will directly shape the governance, financial sustainability and liveability outcomes for thousands of current and future residents," says Glover.

"Poorly structured or inequitable BMSs create persistent governance and financial problems."

Strata expert Professor Cathy Sherry of Macquarie Law School agrees that mixed-use developments are becoming more prevalent.

In the current, frenzied, simplistic push for high-density development, there has been a marked growth in stratum subdivision, which combines retail, commercial and residential development in large high-rise estates, serviced by complex infrastructure and governed by largely unregulated management statements drafted by developers," said Sherry in an article in The Sydney Morning Herald in February 2024.

Problems are emerging with BMC structures, says Glover.

These include "inequitable distribution of costs, with residential owners often subsidising commercial infrastructure and locked in cost allocation formulas that are difficult or impractical to amend, even when they become clearly unfair".

Other problems that can disadvantage residential owners identified by the OCN include diffuse accountability for shared infrastructure, increasing long-term building deterioration and financial risk for residents, and limited transparency and indirect representation of residential owners who cannot participate directly in BMC decision-making.

"I could never see myself buying into a strata development with a BMC," says Glover.

Watch for these warning signs

• High or rising levies with unclear causes
• Frequent disputes in meeting minutes
• Little mention of defects or repairs
• Complex cost-sharing arrangements

What it is really like to live with a building management committee

I can understand his position from my own experience because I bought into such a development without fully understanding the ramifications.

Mine covers four separate schemes and we all have one vote out of four, yet the residential scheme pays the lion's share of the considerable levies required to run the BMC.

One big frustration of living in shared property is that everything that needs to be done to keep my home liveable seems to take such a long time.

Decisions about many things, from upgrading landscaping or just undertaking necessary repairs to common property, can drag out because of governance deadlocks and disputes between competing interests, sometimes compounded by a lack of regular BMC meetings.

The owners of the apartments, especially those who call them home, generally want their buildings and facilities to be maintained to a certain standard and not have to wait for months or even years for things to be brought up to scratch.

The commercial owners, whose tenants usually occupy their spaces during business hours, don't generally have the same priorities.

Why these arrangements rarely change

The bad news is that these arrangements, usually designed by developers to suit their own commercial purpose, can go on forever, says Glover, sometimes 50-100 years.

They can only be changed by the unanimous agreement of all members or by order of the Supreme Court.

"I know of a strata committee that sought legal advice on the prospects of dismantling a BMC arrangement. It cost them $75,000 just to consider whether it was a good idea or not and they were told they had no prospect of success," says Glover.

He thinks, eventually, that informed consumers may turn away from buildings with BMCs attached, which may spur change.

In the meantime, your best protection, if you are buying into any strata development, is to conduct your own strata search, says Glover. Scrutinise both the minutes of meetings and the notices of meetings for at least three years, he says.

"If something bad is going on, there will be some hints somewhere. If you're not reading anything about building problems, then the owners committee and strata manager are likely hiding something."

Reader question

Hi Paul,

For 40 years, my husband, 71, and I, 69, both retired for two years, have lived in our outer-east Melbourne 1950s weatherboard home on a steep half-acre block.

Over the years we have extended and updated parts of the house, although it still needs some TLC.

We tried selling it in 2023, yet the offers wouldn't cover a new property that didn't need renovations, so we had our house restumped, a roof renovation and a total paint job inside and out, paid for from our superannuation.

The property is still at the low end of the market in an area with a range of low-to-high values.

We looked into subdividing the property, but the cost to put in stormwater through four properties to the outlet as per the council, is too high.

My husband has chronic health issues and finds accessing the yard and even the shower over the bath difficult. We have $400,000 in superannuation and $50,000 in savings.

Should we sell the house and use part of the super to buy a better, turnkey home on a smaller, level block, which may cost more, or stay here and update the bathroom and kitchen?

We don't want to live in a unit, apartment or a retirement village.

I'm worried that we'll run out of super in the years to come, or that we'll expire before the super does. Feeling very torn! - Susan

Paul's response

I'm feeling out of my depth here, Susan. There are some powerful personal feelings about your house. I can tell you have loved it - and still do.

Reading your email, though, I get plenty of clues that the emotional attachment you seem to have is not practical. You tell me about your husband's chronic health issues and how accessing the yard and the shower over the bath is difficult.

The house is on a half-acre, steep block. I wonder how you will be able to maintain this land, let alone an older house.

This is up to a professional real estate agent, but you mention it is in the lower end of property prices, and it has the option to subdivide into four blocks, with costs such as stormwater drainage. I would think this would be attractive to developers.

I also worry that its real value is land value, meaning any extra money you put into it is wasted.

I can only read the words you have sent me, so you need to talk to some decent agents about your sale prospects. Values and saleability may have changed since 2023. My sense, based on broad experience over many decades, is that it may be time for you to move to a more appropriate property, given your husband's health.

I can understand that you do not want to live in a unit, apartment or retirement village; that is a personal choice. But what about a much smaller home on a small, flat block of land. Equally a townhouse might be just the thing for you.

My wife and I are pretty much the same age you are. So it is not just my professional experience with people looking to downsize, it is real life for us.

Many of our friends are going through exactly this, often driven by one partner's health issue. We also know our house will be too big for us in time to come.

Unless an agent tells you differently about spending more on your current home, I am nervous about spending money on more improvements.

But, more importantly, I am worried about you and your husband. You may be able to make the house more liveable today, but is an old house on a huge block right for you as the years go by? I suspect not.

The decision to move is a very big one. It is also emotionally and physically hard as you pack up memories.

I'll tell you from experience one thing that is for sure. You really should move before it becomes too hard due to your age and health. None of this is easy and I wish you both all the best.

What to read next

• How to downsize without losing your identity
• A practical guide to downsizer super contributions
• How to cash in on land values by subdividing
• A beginner's guide to bridging loans
• What a home renovation really costs

On this episode of the Friends With Money podcast, Money's Tom Watson is joined by Catriona Graham, financial planner at Bridges Financial Services.

They unpack the real costs, trade-offs and timing of downsizing, and what Australians should weigh up before making the move.

Episode timestamps

00:00 Introduction

01:19 What is downsizing?

02:56 Key benefits and motivations

04:38 Hidden costs and risks

05:50 Downsizer super contributions

07:50 Downsizing and the Age Pension

08:53 The importance of timing

10:33 Lifestyle options and retirement living

11:23 Final tips

Listen to this episode of Friends With Money

Listen on Apple Podcasts

Listen on Spotify

Watch on YouTube for closed captions

Subscribe to Friends With Money

Subscribe wherever you get your podcasts

Friends With Money podcast FAQ

What is the Friends With Money podcast?

Friends With Money is a weekly personal finance podcast by Money magazine, offering expert insights on investing, budgeting, superannuation, property, and other money strategies for everyday Australians.

Where can I listen to the podcast?

You can listen on Apple Podcasts, Spotify, or YouTube (with closed captions available).

Who hosts Friends With Money?

Episodes are hosted by Vanessa Walker and Tom Watson from Money magazine, featuring expert guests and real conversations about money.

Is the podcast suitable for beginners?

Yes! It's designed to be accessible for beginners while still offering valuable insights for seasoned investors.

What topics does the podcast cover?

The Friends With Money podcast covers topics including banking, property, budgeting, superannuation, investing, saving, insurance, employment, travel and more.

How often are new episodes released?

New episodes are released weekly, so you can stay up to date with the latest financial tips and trends.

Can I watch episodes with captions?

Yes, full episodes with closed captions are available on YouTube.

Why subscribe to the Friends With Money podcast?

Boost your financial literacy anytime, anywhere with the Friends With Money podcast from Money magazine. Whether you're commuting, working out, or relaxing at home, this weekly podcast makes it easy to grow your money knowledge on the go.

Each episode dives into real conversations about money - how it's earned, shared, saved, and grown - with tips and insights that make finance simple and relatable. Perfect for beginners and seasoned investors alike, it's your go-to guide for building better financial habits.

Subscribe to the Friends With Money podcast today and start learning when it suits you.

Rate hikes return, so is it time to switch lenders?

Three consecutive rate hikes have wiped out 2025's rate cuts.

But homeowners don't have to just bear the extra cost.

Yes, you may be able to haggle with your lender for a rate discount.

But for a lower rate rate, it can pay to think about refinancing - especially if you look beyond the big banks.

At the time of writing, some of the best rates across the four major banks include:

• 5.84% - CommBank Digi Home Loan 5.84%
• 5.74% - Westpac online offer - Flexi First Option home loan
• 6.19% - NAB Basic variable rate
• 6.14% - ANZ Simplicity PLUS

If you're prepared to look further afield, you could get rates as low as:

• 5.59% - Pacific Mortgage Group
• 5.59% - Virgin Lite Home Loan
• 5.69% - Greater Bank
• 5.74% Reduce Home Loans

Some of these lenders, such as Reduce Home Loans, also offer a cashback sweetener for refinancers.

Property research group Cotality says that there is potential for further rate hikes ahead.

It could make now the time to see how your home loan rate shapes up.

Mother's Day spending jumps, even with cost pressures rising

Tomorrow, May 10, is Mother's Day, and despite rising living costs (and higher interest rates), Aussie mums look set to be spoiled.

ANZ Bank reveals customer spending remains resilient year-on-year.

In 2025, for example, ANZ customers spent $592 million nationally over the Mother's Day weekend, an increase of 6.6% on 2024.

Dining out proved the most popular way to celebrate, with spending also rising on travel for mums (up 15%), watches and jewellery (up 11.9%), and florists (up 7.81%).

ANZ's managing director of data and analytics, Joanna Gurry, says the data underscores Australians' enduring commitment to celebrating mums.

"Aussies love to spoil mum. Mother's Day remains a key moment on the retail calendar, with customers showing their appreciation through both traditional gifts and shared experiences."

ATO cracks down on dodgy tax tips ahead of June 30

As the clock ticks towards June 30, the Australian Taxation Office (ATO) is warning Australians to be wary of incorrect or misleading information, particularly claims promising greater refunds, shortcuts or hacks.

The ATO reports a rise in tax-related content and 'tips' being shared online.

ATO Assistant Commissioner, Anita Challen, says Australians should "think twice" before acting on information from artificial intelligence (AI) platforms, 'finfluencers', and even family or friends.

"In an environment where misinformation can spread within minutes, it's important to pause and check your tax information before you act on it," says Challen.

"Dodgy tax advice doesn't just mislead - it can also lead to significant penalties."

This tax time, the ATO will focus on areas where taxpayers are likely to make errors including work-related deductions and expenses, and omitted income.

"We understand apportioning expenses can be tricky," says Challen. "But don't fall into the trap of thinking if you intentionally claim a little more than you are entitled to, it'll fly under the radar and that the ATO won't notice."

The ATO is also reminding taxpayers to declare all sources of income including side-hustles, cash jobs, interest and rental income.

Savings hit record highs, but are you missing better rates?

Aussies are thumbing their nose at higher living costs by saving more - not less.

The latest figures from bank regulator - the Australian Prudential Regulation Authority (APRA), show Aussie households have amassed $1729 trillion in savings, up from $1682 trillion in December 2025.

Trouble is, we may not always stash cash in accounts that pay the highest return.

CommBank dominates the savings account market, with around $447,808 million of household savings.

But smaller banks can offer very compelling rates on spare cash.

As at early May, Rabobank is offering a 5.65% bonus rate.

Ubank is paying 5.60%.

ING is paying 5.65%.

These rates can come with strict terms and conditions to earn bonus interest. And some may be introductory offers. But now is the time to shop around and make your money work harder.

Banks on standby to support Aussies facing financial pressure

Over 80% of home loan borrowers are still ahead on their loan repayments and household deposits remain at record levels.

That said, Financial Counselling Australia (FCA) says the May rate hike will intensify financial pressure on households with mortgages who are already struggling.

However, homeowners don't have to suffer in silence.

The Australian Banking Association (ABA) is urging home owners with a mortgage to get in touch with their bank if they need support.

ABA CEO Simon Birmingham says, "Australian banks recognise that this week's interest rate rise will be difficult news for many households.

"You don't have to tough it out on your own - get in touch with your bank."

Depending on individual circumstances, assistance may include:

• Moving to interest-only payments for a period.
• Deferring payments temporarily.
• Restructuring the length of a loan to lower monthly repayments, and
• Providing flexible access to savings and term deposit products to support short-term cash flow needs.

The key is to act fast - certainly before you miss a repayment, which can leave a black mark on your credit record, potentially making it harder to refinance to a lower rate.

Property price growth has started to soften. In some markets, prices are even going backwards, according to Cotality.

National home prices rose just 0.3% in April, but competition is intensifying in the cheapest parts of the market where first home buyers are most active.

Over the course of April, the national median home value edged up by just 0.3% to $940,048, which is the lowest increase recorded by Cotality since January last year.

Melbourne and Sydney are proving to be the largest drags on growth, with property prices in both markets falling by 0.6% in April.

It was a different story in some of the other capitals though. Home values in Perth (up 2.1%), Brisbane (up 1.2%) and Adelaide (up 1.1%) all rose in April, though at lower rates than in previous months.

Interest from buyers also appears to be waning, with Cotality noting that estimated sales are down on previous years while listings are on the rise.

"The housing market was losing momentum from late last year as affordability and serviceability constraints weighed on demand," says Tim Lawless, research director at Cotality.

"Now we have the additional downside pressure of higher interest rates, sentiment has fallen off a cliff, and rising inflation is set to drive the cost of debt even higher."

More buyers are chasing fewer affordable homes

On the face of it, the news that price growth is softening (and even decreasing in some locations) would seem like a welcome development for first home buyers trying to enter the market.

But this isn't necessarily the case.

The growth in home values that is occurring is, according to Cotality, increasingly concentrated in the lowest price quartile - the segment of the market where first-time buyers are most active.

As prices become more expensive and borrowing capacity thanks to rising interest rates, Cotality notes that more buyers are competing for the most-affordable pool of homes.

"The largest difference between upper and lower quartile value growth is in Sydney, where lower-tier house values are up 2.9% year-to-date compared with a 3.3% fall across the most expensive quarter of the market," Lawless explains.

Is the Home Guarantee Scheme pushing up prices?

Last October, the federal government rolled out an expanded Home Guarantee Scheme (HGS) for first home buyers, which included higher property price caps, no income limits and unlimited places.

Six months on and roughly 60,000 people have made use of the expanded scheme to enter the housing market, according to figures from Housing Australia.

While helping thousands get a foot in the door, the scheme also appears to have contributed to a jump in prices at the lower end of the market.

Research released by Cotality last month found that in the six months since the revamped scheme began operating, homes with values under the scheme's price caps have risen by 6.7% - more than double the growth rate of those with values above the caps.

Of course, the redesigned scheme isn't solely responsible for price increases at the lower end of the housing market.

Cotality suggests that affordability and serviceability constraints were already pushing many buyers towards cheaper homes, including a large number of investors who entered the market at the tail end of last year.

Going forward, the impact of the scheme on competition and price growth is likely to lessen, though as Cotality notes, this will be as a result of more homes rising above the existing prices caps and more first-time buyers being constrained by higher interest rates and inflation.

Amid Australia's home building boom, Zeher Khalil has become its most recognisable critic. Founder of Site Inspections and better known as the TikTok Inspector, he roams construction sites in a SWAT-like vest bristling with tools, drones buzzing overhead, calling out defects to an audience of millions. He has catchphrases, merch and a social media following that would make lifestyle influencers jealous. But behind the viral moments is a meticulous operator, calling out bad actors who exploit consumers and chip away at trust in Australia's most cherished asset, the family home.

Australia's home construction industry is, to borrow Zeher Khalil's favourite word, a shemozzle. You wouldn't know it from the paperwork. Compliant. Within tolerance. Approved for handover. Those were the words on the independent inspection report for one of Khalil's own builds, a verdict that should have reassured him. Instead, it left him unsettled.

He had expected scrutiny and to be made to defend his actions, but the bloke was just ticking boxes. "I found myself questioning the findings," he says. "It said the work was compliant, but I thought it hadn't gone hard enough."

For Khalil - a licensed builder with an engineering background - the issue was the lack of accountability. If compliance could be signed off without interrogation, what exactly was being verified? If the inspector was not looking into the detail, who was?

"That's when I realised the inconsistencies and knowledge gaps weren't just happening on building sites," he says. "They were happening during inspections too."

@siteinspections This $900,000 home dropped to just $175K after major defects were uncovered. The certifier approved it without key compliance certificates. The builder lawyered up and sent his own inspector who claimed everything could be fixed for ~$7,000. The insurance company quoted over $80,000 just to cover part of the repairs. Then the council gave the family 30 days to fix it or vacate. We weren't buying it, so we paid the builder a visit and uncovered one of the most shocking property investigations we've ever done. Watch the full story and learn how to protect yourself. #thetiktokinspector #building ♬ original sound - The TikTok Inspector - Site Inspections

Why Australia's building inspections fail buyers

Khalil began to assess every door, nail and waterproofing membrane, and traced each defect he found back to a specific clause in the relevant code or Australian standard.

"I treated it like detective work," he says. "If something was wrong, I wanted the exact why and the exact rule."

Soon after, he qualified as a building inspector - the expert prospective homeowners rely on to identify any faults before they put in an offer to buy. However, it wasn't until he turned the camera on the inspection process, and on himself, that everything changed.

Inside a building inspection with the TikTok Inspector

The drone rises slowly above a half-finished home in Preston, Melbourne's north. From the street, it looks complete. Timber frames are up and the roofline straight. Tiles neatly laid. But from above, something's not quite right.

The TikTok Inspector zooms in. Wedged into the roof structure is a length of timber that doesn't belong - greyed, cracked and visibly aged. The wood appears weathered, inconsistent with the new structural framing surrounding it. Yet the stage had already been signed off by a registered building surveyor.

"You've got to be kidding me," the TikTok Inspector says. "Good from far but far from good."

The footage pans across the site. Nearby, a wooden fence is missing boards.

For the homeowner, who had engaged Khalil for an independent inspection, the moment crystallised a fear that many buyers carry: that the biggest problems in a home are often the ones you can't see.

About 70% of existing homes have building quality problems, according to the Australian Housing and Urban Institute.

In NSW alone, the cost of non-compliant home building is estimated at $700 million per year. Another study of 346 Australian construction projects found that over six years, builders had to redo work 19,605 times to fix defects, costing about 39% of the original contract value.

Why trust is risky when buying a home

For most Australians, a home is the largest financial decision they will ever make, and one largely built on trust. Trust that their home is built to standard and not by rotting wood taken from an old fence out back. Trust that the sign-offs carry meaning.

Khalil had no intention of becoming the TikTok Inspector, only to restore this trust. "None of this was planned," he says. "I had zero intention to build a following or become a public figure."

Social media entered the picture almost by accident when a family member suggested he post videos during the Covid slowdown. Khalil was sceptical. "I thought TikTok was just dancing videos and stuff," he says. "But let's see what happens."

His early posts - voiceovers explaining compliance issues - went largely unnoticed. The information was there but the messenger was not.

"So, one day I thought, let's get uncomfortable," he says. "I turned the camera on myself and explained what I was seeing in my own words."

He uploaded the video and went to bed. "Overnight, the video had tens of thousands of views," he says. "I couldn't believe it."

"The attention was overwhelming. It felt out of control, and honestly, it scared me to the point where I deleted the video," he says.

How TikTok turned inspections into public accountability

The reaction forced him to reflect on something much older than social media.

"I grew up in a family who worked with their hands and took pride in doing things properly," he says.

"There was an unspoken rule in our house: if you're going to do something, do it right, even if it takes more time or effort."

That instinct had shaped his work as a builder. Now, it was shaping something larger. The video took on a life of its own. "I thought the attention was a one-off. But it turned out it wasn't."

Pushback from builders and growing support from homeowners

He kept filming. Each inspection became a form of public documentation, identifying defects, explaining why they mattered, and showing how they could be fixed.

The reaction was immediate, and divided. "There was a lot of criticism - online abuse, trolling, people trying to intimidate me," he says. "I'd never experienced anything like it."

Some of the pushback moved offline.

"There have been many attempts by builders to limit our access to the site," he says. "Some have tried to lock us out. Others have tried to make homeowners sign contracts that exclude me specifically."

@siteinspections A builder tried to stop our inspections and have our video removed. After documenting what happened on a Melbourne job site, an Intervention Order (IVO) was filed against us. The order restricted us from returning to the property and forced the video offline while the matter went before the court. We contested the application. The court has now dismissed the case, confirming that we are free to continue conducting inspections and publishing our reporting. In this video we break down: • What happened when we arrived at the site • Why access to the property was denied • The claims made in the court application • The legal arguments presented in court • And the final outcome of the hearing Our work exists to inform homeowners and raise standards in the building industry. When something goes wrong on a construction site, transparency and accountability matter. Now that the matter has concluded, we can finally share the full story. Watch the inspection that started it all. @The TikTok Inspector @Bastion Legal #siteinspections #tiktokinspector #builders #building ♬ original sound - Site Inspections

Access, however, ultimately sits with the homeowner.

"So long as the homeowner has given the builder a heads-up, the builder isn't legally allowed to deny that access. So, we always get to inspect eventually."

While there was resistance, there was also support. "Homeowners, trades, even people inside the industry were saying, 'Keep going, we need this'."

As the audience and Site Inspections grew, Khalil realised the videos were doing more than attracting attention, they were restoring clarity in an opaque market.

"I treated my camera like a tool to make invisible problems visible and help people understand what they're actually buying," he says. "If I was going to keep filming, it would be to share knowledge. And if attention came from it, that's fine, but it's not the goal."

The tools behind the TikTok Inspector persona

Despite the online persona, Khalil insists the inspections remain the bedrock of the business. His videos come later, often late at night.

"At the end of a long day of inspections, I'd go home, write reports and study. Then, at midnight or later, I'd think, okay, I need to explain this to people," he says.

Much of the early production was improvised. Editing, graphics and voice-overs were self-taught. Some recordings were made in his car, parked in the garage after his four children had gone to bed.

But as time went on and the views and scrutiny snowballed, the operation became more professional.

"Not to chase views, but to make sure what we were putting out was accurate, measured and in the public's interest," he says.

"The inspections drive the content, not the other way around. Social media is a tool. The technical rigour, the standards and the evidence come first."

Khalil does not see himself as an influencer but a part of a correction.

"The goal has always been to build a better system," he says.

Site Inspections is developing educational tools to help homeowners and industry professionals better understand compliance and risk. He expects it to be helping consumers soon.

"If there's a next chapter, I hope it's about moving from highlighting problems to helping the industry solve them at scale," he says. "That's where the real impact is."

What home buyers should do before signing a contract

After inspecting thousands of homes, Khalil's advice to buyers is to not rely on appearances. "Don't rely on how the home looks. Verify what it actually is," he says.

Before signing a contract, ensure the approved plans, the contract and the finished build align. Many of the most serious defects, he says, originate in the gaps between those stages.

"If something doesn't line up or if the answers you get are vague, hit pause," he says. "Asking hard questions early is a lot cheaper than discovering issues after settlement day."

He also warns buyers to pay particular attention to inspection clauses. "Most buyers don't realise that the words 'subject to building inspection' are meaningless if it's not properly defined," he says. "If you don't define what standards apply or what qualifies as a major defect, you're often locked into a dispute after the fact. Get clarity before you sign anything."

Is accountability improving in Australia's building industry?

Khalil is measured about the future. "I do think accountability is improving, but very unevenly."

Builders, he says, anticipating independent scrutiny often adjust behaviour pre-emptively.

"That tells you that accountability responds quickly to visibility."

Regulators have strengthened enforcement in parts of the country. But structural reliance on trust remains.

"Mistakes are always going to happen," he says. "But there's no consistent mechanism catching patterns early."

Until education, verification and accountability align, not only in documentation but on site, he believes defects will continue to surface post handover.

"There's clearer recognition these days that poor workmanship has long-term consequences for consumers and the industry as a whole," he says.

Which brings the story back to paperwork. Compliant. Within tolerance. Approved. These words are supposed to guarantee something. They should be more than a box to tick, they should mean a safe home that shelters the next generation of Australians.

"Anything less is a shemozzle."

The move to expand prefabricated and factory-built modular homes as part of a multi-pronged approach to help solve Australia's seemingly intractable housing affordability problem got a boost, thanks to Bunnings' announcement in February that it would start selling modular pod houses.

The pods and studios are designed for backyards, though every council is different, and permit requirements can vary depending on size, use and location.

Australia's largest hardware and home improvement retailer now lists Elsewhere Pods' flatpack dwellings online and in store as a special order.

There are two models, a small 2.7m x 2.4m pod priced at $26,100 and a larger 4m x 2.4m studio at $42,900.

Bunnings says the units can be assembled in as little as two days, positioning the products as DIY-friendly solutions that can serve as crisis accommodation, home offices or teenage retreats.

How housing supply delays are worsening affordability

One of the biggest factors exacerbating our home affordability crisis is the lack of new supply and the increasing time it takes for standard on-site built homes to be completed.

Australia's national housing target is to build 1.2 million new homes over the five years from July 2024 to June 2029. But we are falling well behind this with the National Housing Supply and Affordability Council (NHSAC) predicting that Australia will miss its 2029 target by about 262,000 homes.

The factors causing this include severe workforce shortages and planning and regulatory delays that have increased the time taken to build a detached house by roughly 34% to 40% since the COVID pandemic.

With apartments it's even worse, with some reports that construction times have increased by up to 80% over the past 15 years.

Why construction costs are still climbing

Rising construction costs, with materials such as timber, steel and concrete jumping more than 40% in price since the start of the pandemic, have added to the woes.

Modular homes currently only make up about 8% of Australia's housing stock, but it's a sector gaining momentum.

"The Australia Prefabricated Construction Market was valued at US$8.35 billion ($11.8 billion) in 2025 and estimated to grow from US$9.01 billion ($12.73 billion) this year to reach US$13.17 billion ($18.60 billion) by 2031, at a compound annual growth rate (CAGR) of 7.88% during the forecast period (2026-2031)," stated a recent report into Australia's prefabricated construction market by market intelligence firm Mordor Intelligence.

"Tight housing supply, persistent skilled-labour shortages, and stricter energy-performance rules under the National Construction Code 2022 are steering developers toward factory-based production lines that compress schedules and curb cost overruns."

Why prefabricated homes can be faster and cheaper

A big advantage of prefabricated homes is that they only take about half the time to build as standard housing, one reason the Australian Federal government is investing $54 million to accelerate the adoption of modular and prefabricated housing.

Prefabricated homes often cost 10% to 25% less per square metre to build compared with traditional homes, according to data from the Housing Industry Association, with savings driven by reduced labour, minimised material waste, and faster, more predictable construction timelines.

Additionally, modular homes are generally of high quality and durable as they are built in a controlled, indoor environment, avoiding weather-related damage to materials, ensuring consistent quality. Many are also energy efficient and sustainable with better insulation, sustainable materials, and in-built off-grid capabilities like solar panels.

Many prefabricated homes can be customised and offer architecturally diverse designs, dispelling the myth that they are unoriginal or boxy.

Who modular homes and granny flats are actually suited to

While these types of secondary dwellings are usually considerably smaller than standard houses, they may indeed suit a large number of people. In Australia, 61% of households consist of one to two people, while three to four bedrooms make up 70% of our housing stock, according to analysis from leading real estate data firm Cotality.

Builders are responding to growing demand for modular homes with a Housing Industry Association (HIA) survey of builders in April 2025 showing that granny flat construction, mostly prefabricated, is set to take off across Australia. Respondents reported that they expected to build 10 times more granny flats this year than they did in 2022.

The origin of the sudden surge in granny flat construction lies in the planning system, says the HIA. NSW was the first State to make it much easier to build granny flats in 2009 and the others have followed, albeit some of them quite slowly.

What could hold prefabricated housing back

One of the problems associated with getting a loan to buy a prefabricated home has been lender hesitancy to come to the party because the home is built in a factory. This means lenders cannot use the building as security until it is installed, making them nervous.

This is being mitigated by the fact that at least one major bank, CommBank, is now offering tailored construction loans that allow for progress payments during the off-site, factory-build phase. Others will likely follow as the sector grows.

Another potentially considerable problem is the cost of transporting factory-built homes, usually on the back of a truck.

Depending on the complexity of the transport and lifting job, moving a home may cost anywhere from $5000 to well over $20,000, eating into cost savings from this type of home.

The Senate Select Committee on the Operation of the Capital Gains Tax Discount handed down its final report on Tuesday after taking evidence from economists, industry groups, unions, academics and members of the public. It held public hearings in Melbourne, Canberra and Sydney across February.

The report found that the concession benefits wealthier Australians most, can skew investment toward existing housing and has helped tilt the market toward investors over owner-occupiers.

While political opinions differ, the broad consensus in submissions favours reforming the rules.

While the Greens chaired the Committee, which included Labor and Coalition senators, the government remains tight-lipped on whether the report will trigger changes.

What is the capital gains tax discount?

Capital gains tax applies to the profit made when you sell an asset.

Any net gain is added to your taxable income and taxed at your marginal rate. Your main residence is generally exempt.

Under current rules, Australian residents who hold an asset for at least 12 months can halve the taxable gain using the CGT discount.

According to the Treasury's 2025-26 Tax Expenditures and Insights Statement, about 830,000 people used the discount in 2022-23.

CGT discount: arguments for and against

The current discount was introduced in 1999 to simplify the system and encourage investment. Since then, housing prices have surged.

The report found the median home price has grown from roughly four to eight times the median income, while only half of 30-34-year-olds own property, down from 57% when the discount was introduced.

Coalition senators Andrew Bragg and Dave Sharma filed dissenting views, arguing the discount supports the supply of rental properties and that inadequate housing supply is the core problem.

"Australians are understandably frustrated by high prices and limited availability," they said in a joint statement. "However, it is misleading and irresponsible to blame the CGT discount for this crisis."

They pointed to Grattan Institute research estimating that increasing CGT could reduce housing construction by up to 10,000 homes over five years to 2030, with the removal of the discount likely cutting property prices by less than 1%.

Separate University of Melbourne research shows removing the CGT discount could push rents up by about 1.3%.

The Committee, however, cited research indicating the current settings do not increase the supply of new housing and therefore do not lift rental supply.

Over the past five years, 92% of investor lending has gone to existing housing, the report said. Only 8% of investor lending has funded new builds, compared with 20% of owner-occupier lending going to new housing.

"Australia's tax system is broken," says Nick McKim, committee chair and Greens senator.

"More and more young people are facing the prospect of never owning their home. Australia is in a nationwide crisis of housing unaffordability which the CGT discount has played a pivotal role in creating."

CGT discount: What could change?

While the Coalition wants no change, others are using the report to push competing models for reform.

The Greens are arguing for the most sweeping overhaul. Their view is that the capital gains tax discount should be wound back across all asset classes so income from owning assets is taxed more like income earned from work.

On housing, they want the discount abolished entirely on investment property sales.

They are also opposed to broad grandfathering, arguing that protecting existing investors for too long would blunt the reform and lock in the same intergenerational inequality the report says the current system worsens.

Independent senator David Pocock is proposing a narrower model.

He wants the CGT discount removed for residential investment properties bought after July 1, while keeping the current rules for properties bought before that date.

He would still allow a 25% discount for newly built homes held for more than three years, in an attempt to direct investor money towards adding supply rather than competing for existing homes.

He has also linked that approach to tighter negative gearing rules on second and subsequent investment properties.

What is grandfathering?

Grandfathering means existing owners keep the old tax rules, while new buyers face the new ones.

So if changes began from July, an investor who bought before that date could still claim the current 50% CGT discount when they sell, while someone buying after that date could not.

It is essentially a way of changing the rules without applying them retrospectively.

Capital gains tax: What is the government's position?

The more politically awkward question is Labor's position.

That is because the report, backed by Labor senators, makes firmer findings than Labor senator Richard Dowling was willing to embrace in his own remarks.

The report says the CGT discount disproportionately favours investors and worsens inequality.

Dowling, by contrast, said the inquiry had merely "heard evidence" about the discount's effects, and stressed that housing outcomes are shaped by many structural factors, with tax policy only one part of a broader housing policy mix.

That is the tension. The report itself reaches strong conclusions about the role of the CGT discount. Dowling stops short of owning those conclusions politically, and instead shifts the focus back to Labor's broader tax and housing agenda.

That is despite Dowling being the deputy chair of the Committee.

All eyes turn to the May Budget

Treasurer Jim Chalmers has also not backed any change to the CGT discount yet, but he has left the door open.

Before the report was released, Chalmers said the government would consider its findings "in the usual way", but made clear that parliamentary committees do not decide tax policy, cabinet does.

He also said the government's policy "hasn't changed in this area" and that any further steps would be a matter for cabinet.

This careful language means Chalmers is not endorsing reform, but he is not shutting it down either.

His most important comment may have been about timing.

"No doubt, the Committee's made a range of findings," Chalmers said in a press conference after the Reserve Bank handed down its latest cash rate decision.

"But when it comes to budgets, they usually finalise closer to May than the middle of March."

In that sense, the report raises the pressure, but the budget is where it counts. If Labor wants to revisit the discount, May is when that choice is most likely to show up.

It's a brutal time to be renting in Australia: prices are rising, vacancy is shrinking and the first rung on the property ladder keeps sliding out of reach.

The average national rent is about $683 a week and climbing 7% year on year. In the capitals it's closer to $779.

Vacancy rates sit at just 1.2%, and rent growth outpaces wages almost everywhere.

If you never buy, the penalty follows you into retirement - renters need roughly $300,000 more in super than homeowners to achieve the same living standard.

But as housing affordability worsens, new layers of technology and middlemen are reshaping the rental market - often in ways that increase risk, cost and control over tenants.

1. How rental applications can expose your personal data

In the scramble for a rental, tenants are paying with data.

A recent AHURI study found rental application portals can request around 50 separate data points, extending well beyond identity and income into lifestyle-related details gathered through long digital forms.

In NSW alone, the government estimates about 187,000 pieces of identification are collected from renters each week: passports, driver licences, bank statements, payslips and referees' details. That information is often screened against tenancy databases and so-called blacklists.

 

 

 

 

View this post on Instagram

 

 

 

 

 

 

 

 

 

 

 

A post shared by Money Magazine Australia (@moneymagaus)

"Currently, there is no consistent standard for how this highly sensitive information is stored, used or destroyed," says NSW rental commissioner Trina Jones.

Property technology (proptech) is now embedded across the market. AHURI researchers identified 57 rental platforms operating by early 2025, including tools that risk-score tenants, algorithmically "match" applicants to properties and maintain tenancy databases that can shadow renters for years.

"Applicants may be unaware they are being vetted by proptech," says Dr Sophia Maalsen from the University of Sydney.

"How applications are sorted and scored remains opaque, and the weighting of characteristics is unknown, creating a 'black box' effect."

A February investigation by Guardian Australia added fuel to those concerns. A researcher found seven rent-tech platforms exposing personal documents via links that did not require login access.

Some links were "guessable" because they used sequential codes; others could be cached by web crawlers. In one case, opening a single lease generated an authentication cookie that unlocked broader landlord records, including rental history and maintenance files.

States are beginning to respond. NSW has introduced reforms to standardise application forms, curb excessive data collection and require disclosure when listing photos have been digitally altered.

National progress has been slower. In 2023, national cabinet backed plans to simplify rental applications and limit what can be collected, but reforms have yet to be implemented federally.

Many agencies and proptech firms are also exempt from the Privacy Act because their annual turnover falls under $3 million - even as the Office of the Australian Information Commissioner (OAIC) flags the sector as a  "key priority".

How to protect your personal data when applying for a rental

Ask what information is mandatory and why.

Request deletion of your documents if your application is unsuccessful.

If your data appears compromised, lodge a complaint with your state regulator or the OAIC.

2. Why some rent payment apps charge extra fees

Data isn't the only place renters are feeling squeezed. The way rent itself is collected is also under scrutiny.

Consumer advocates say renters are increasingly being steered towards third-party payment apps, often with fees attached and limited practical alternatives.

In 2024, more than 40% of renters told CHOICE they felt pressured to use a third-party app when applying for a property. Nearly one in three say they've skipped properties altogether because they didn't trust the platforms involved.

On paper, most states require at least one fee-free way to pay rent. But in practice, renters say the free option can be deliberately inconvenient.

One widely used example is Ailo.

Renters can pay by direct debit (with a 0.25% fee) or card (1.5%), while the no-fee method requires setting up manual transfers that do not store payment details.

While that may make the paid option faster and simpler, analysis by The Times suggests renters could pay nearly $500 a year in fees.

Some platforms promote reward points as a sweetener, but the value can be negligible.

In 2021, the Tenants' Union of NSW examined one rewards system and found a year's worth of points could be worth as little as $3.50 to $7 in vouchers or $8.62 if donated to charity. As Barefoot Investor Scott Pape quipped at the time, it could take 69 years for renters to earn enough for a razor.

There are other risks. In Western Australia, Consumer Protection has warned that some third-party rent platforms route payments through intermediaries or overseas banks before the money reaches an agent's trust account.

Under state law, licensed real estate agents must hold rent in protected trust accounts. Third-party platforms are not licensees and are not required to use trust accounts.

If funds go missing before they reach a licensed agent's account, tenants may not be covered by the state's fidelity fund - the last-resort compensation scheme that reimburses losses from fraud or theft involving money held in an agent's trust account.

"Not only have you lost serious protections," the Consumer Protection Commissioner has warned, "but these third-party payment platform providers are generally overseas and if something goes wrong with them, your money is gone."

In NSW, landlords are already required to offer at least one fee-free way to pay rent. Similar protections exist in other states and territories.

The NSW government has now signalled it will strengthen those rules to ensure fee-free options are genuinely convenient, rather than technically available but impractical.

Draft legislation has yet to be released. But if the reforms proceed as flagged, renters could see a return to simpler methods such as direct bank transfers, reducing reliance on app-based payment systems.

How to avoid unnecessary rent payment fees

Ask in writing what the fee-free payment option is before signing a lease. Consumer Protection advises tenants to read the agreement carefully and clarify how rent must be paid.

Confirm where your money lands: directly into a licensed agent's trust account or via a third-party processor. If platform or card fees are being passed on to you, check with your state regulator whether that complies with local tenancy laws.

3. Why some renters can't choose their electricity provider

There's another cost many renters don't see until they move in: embedded energy networks.

In many apartment blocks and residential land lease communities, electricity is supplied through a private network. Instead of choosing their own retailer, residents buy power from the site operator, who purchases energy in bulk and on-sells it.

These operators are "exempt sellers", meaning they don't face the same regulatory obligations as licensed energy retailers.

In effect, residents can be locked into a single supplier with limited ability to shop around.

"For too long, people living in apartments, residential land lease communities and other properties with embedded networks have faced challenges that others don't, including a lack of competitive choice and at times, unclear pricing," says NSW fair trading minister Anoulack Chanthivong.

The state's Embedded Network Action Plan aims to align prices more closely with market offers and improve access to dispute resolution and rebates.

But reforms are still unfolding, and protections vary by state.

How to check if a rental is on an embedded electricity network

Before signing a lease, ask whether the property is on an embedded network and how utilities are billed. Details can also be found in strata reports.

Factor energy costs into your rental comparison. If you believe pricing is unfair or unclear, contact your state energy ombudsman or consumer regulator to understand your options.

And while the classic double-brick on a quarter-acre block may no longer be realistic for many buyers, the desire to secure a place of your own hasn't faded. If anything, the urgency has increased.

Perhaps renting has worn thin or living with the parents has run its course. Or maybe you simply want the stability that comes from knowing your housing future isn't determined by a landlord.

But once you begin seriously looking, you quickly realise buying a home comes with its own language, deadlines and emotional highs and lows. There's jargon, paperwork and negotiation, and a whole cast of professionals to consult along the way.

This timeline walks you through each stage, from early research to the moment you collect the keys.

12 months out: Start your research

Before you surrender your Saturday mornings to driving around and viewing homes for sale, the process begins with a cheeky scroll.

You browse listings, track suburb prices, compare commute times and check school zones, often building spreadsheets without meaning to.

You notice which homes linger online and start asking why.

Domain and realestate.com.au remain the main search platforms, while AllHomes and property.com.au broaden your options. These sites offer suburb guides, price trends and calculators that help you balance affordability with lifestyle.

Some buyers also use paid valuation tools, such as Cotality, to get a clearer sense of market value.

This research phase continues throughout your journey. As you learn more about budgets, neighbourhood quirks and your own priorities, your idea of a home that ticks the boxes for you starts to evolve.

9 months out: Get your money in order

This is where the search becomes real. Understanding what you can borrow (and what you can comfortably pay) usually requires expert guidance.

Bianca Patterson, director of Calculated Lending, says first-home buyers should speak to a mortgage broker as soon as they begin thinking seriously about buying.

"Early conversations give buyers clarity around what they can safely afford, what they may need to do to become 'purchase-ready', and which government incentives they might be eligible for," she says.

"We explain how much deposit is needed, help review budgets and build savings plans, highlight financial risks or roadblocks, and guide buyers toward loan structures and features that support their long-term goals."

While mortgage brokers can provide credit assistance and guidance, they don't offer broader financial advice.

That's where a financial adviser comes in. They help buyers understand how a mortgage fits within their long-term financial wellbeing.

"A lot of first-home buyers focus on what the bank will lend them, not what their lifestyle can sustainably support," says Jackson Millan, director of Aureus Financial.

"My role is to show how a mortgage intersects with savings goals, insurance needs and future plans, so they're not overcommitting on day one."

Working with both professionals can be helpful: the adviser sets your financial boundaries, and the broker finds loans that fit within them.

3 months out: Lock in pre-approval

Pre-approval is a lender's early indication of how much they may lend. It's not a guarantee, but it gives you a firm budget and signals to agents that you're serious.

You'll provide payslips, bank statements, ID and a breakdown of expenses. Your broker packages the application to meet lender requirements. Pre-approval typically lasts about 90 days.

Patterson says home buyers should exercise significant caution when it comes to making financial changes after receiving pre-approval.

"Even seemingly minor decisions such as opening a new credit card or interest-free payment facility, taking out a personal loan, using savings for a large one-off purchase, or paying out an existing liability without advice can materially affect their borrowing position," she says.

"The same applies to major changes, including switching jobs, reducing hours, moving from full-time to part-time or casual work, changing industries, becoming a contractor or self-employed, or altering income structures."

8 weeks out: Hit the open homes

With pre-approval sorted, open homes become your weekend routine.

You'll meet real estate agents, skilled negotiators who work for the seller (and not for you) but can still offer helpful local insight.

It's also the right time to shortlist conveyancers who review contracts and manage settlement. Your broker or adviser can usually recommend a few.

6 weeks out: Make an offer

Once you've found the right property, things move fast.

Your conveyancer handles the legal side of transferring ownership and ensures the process runs smoothly. They'll review the contract for potential issues such as easements, unusual clauses or unapproved structures.

Melissa Barlas, founder of Melbourne conveyancing firm Conveyed, says it's worth considering whether you need a conveyancer or a lawyer.

"Both can do conveyancing - the legal work behind making you the property's legal owner," she says.

"But if you need representation, face a dispute or require legal advice, that's where a lawyer is handy."

Barlas says having a lawyer from the start can save thousands because conveyancers aren't qualified or insured to provide legal advice.

"Conveyancers are generally more cost-effective for standard transactions," adds Barlas.

"But many law firms charge similar rates to conveyancing firms. It really depends on the expertise you need and who you feel comfortable with for the transaction."

At this stage, your broker reconfirms your borrowing capacity and you submit your offer. In competitive markets, expect counter-offers.

If accepted, you'll pay a small holding deposit.

2 weeks out: Prepare for settlement

Settlement preparation involves signing loan documents, organising building insurance and confirming your funds.

Your conveyancer coordinates with your lender, the vendor's lawyer and the settlement platform to ensure everything is ready.

A pre-settlement inspection, usually 24-48 hours beforehand, lets you confirm the home is exactly as agreed.

Check appliances, ensure repairs have been completed and make sure all keys, remotes and fixtures are still in place.

You'll also need to cover several additional fees, including the loan application fee, mortgage registration fee, transfer fee and any outstanding council and water rates linked to the property.

Settlement day

Settlement day is when the handover happens. Your lender transfers the funds, the property title is registered in your name and the home legally becomes yours. Your conveyancer manages the entire process. Once complete, the agent hands over the keys.

For the conveyancer, lender and agent, it's routine paperwork. For you it's one of the biggest emotional and financial milestones of your life.

Broker or banker?

For generations, home buyers paid a visit to their local bank to arrange their home loan.

Today, the landscape has shifted with nearly 80% of Australian home loans processed through mortgage brokers.

Patterson says one of the biggest first-home buyer misconceptions is that going straight to your existing bank is easier or that loyalty secures a better deal.

"A bank can only offer their own products and policies. Brokers, however, can compare multiple lenders and must act in your best interests by law."

This broader view can make a meaningful difference to first-home buyers.

"Not all lenders participate in schemes like the First Home Guarantee," she says, "If you walk into the wrong bank, you might end up paying lenders mortgage insurance unnecessarily when another lender could have waived it."

Settling in

Move-in day is when the property finally becomes your home. Over the first few weeks, you'll discover its quirks - the morning light, the hot water temperament, the friendly (or noisy) neighbours.

Your adviser may check in to guide you on the next steps in your financial journey, while your broker can help set up offset accounts, arrange extra repayments or discuss refinancing strategies.

"Buying the property is one milestone," says Patterson. "Managing the loan well is the next."

Buyers agents?

At this point, buying a home can feel overwhelming, especially when dealing with seasoned real estate agents whose job it is to secure the highest price for the seller.

"They know the tricks, the psychology and the pressure points to help get the vendor the highest possible price," says Mark Mendel, co-founder of buyers agency Moove.

That's where a buyers agent can help. Their role is to represent the buyer's interests: researching properties, assessing value, negotiating with agents and helping to avoid costly mistakes.

They can also bid at auctions and provide advice on strategy, which is particularly useful in competitive markets or for buyers short on time or buying interstate.

Fees typically range from 1.5% to 2.5% of the purchase price, though some agencies offer flat-fee packages.

Many of our friends are at the same stage. Kids finishing uni, getting decent jobs and suddenly facing the notion that three bricks and a patch of concrete in a capital city cost roughly the GDP of a small island nation.

It has become the new barbecue conversation. Used to be: 'How's work?' or 'Did you see the game?' Now it's: 'Mate, how are you planning to get your kids into the housing market?'

And everyone nods knowingly, swaps horror stories about suburban auctions, talks about the Bank of Mum and Dad, then stares at the sausages like they're the last affordable real estate left on earth.

This is the housing doom loop.

The doom loop works like this: every news headline becomes proof that the market is hostile. Every weekend inspection becomes proof that you're 'too late'. Every rent rise becomes proof that the system hates you.

Eventually, the brain stops looking at options and starts narrating the world. The story becomes, 'It's impossible'.

And once you believe that story, the financial game is already over. Not because of reality, but because you stopped playing.

There is a term for this type of thinking, learned helplessness. This is the psychological phenomenon where repeated failures train you to stop trying, even when new opportunities appear.

Housing is a perfect breeding ground for learned helplessness. A few years of being outbid, underpaid or insulted with mortgage calculators can make the brain go, 'Right, I get it. I'm destined to be a nomadic renter until I crumble into dust'.

But the housing market isn't conspiring against you, it's just moving. And like every big system, it has pockets of opportunity, but those pockets are invisible to anyone stuck in the doom loop.

Read between the lines

The truth is that Australia doesn't have a single housing market. We have thousands of little ones.

A studio apartment in Arundel, Queensland, isn't the same as a townhouse in Ballarat or a three-bedder in Perth.

But we compress all of them into one headline: HOUSE PRICES AT ALL-TIME HIGH.

That simplification feels intellectually tidy. It gives us a villain. It also makes us a little financially blind.

The other trick the doom loop plays involves time. Markets are reported in quarters; lives are lived in decades.

Nobody says, 'Over a 30-year horizon, interest rates will fluctuate, asset cycles will correct, yields will expand and contract, and affordability will be elastic based on cohort behaviour'. They say, 'The market's cooked, mate'.

And the sausages nod.

But there is hope. If the goal feels too far away or unreachable, simply shift the time horizon closer.

•  Can't afford the dream suburb? Look at a suburb a few postcodes away.
•  Can't afford a house? Look at a unit.
•  Can't afford ownership? Build a renter profile that maximises flexibility and savings.
•  Can't think 10 years ahead? Focus on the next $5000 saved.
•  Can't face the whole mortgage? Build an emergency buffer first.

When the goal is emotionally reachable, motivation returns.

And, of course, we all need to stop comparing our children's situation to our friends' kids who might be ahead of the game.

This is social proximity bias: we elevate the achievements of the people most like us, then punish ourselves for not matching them. Your financial path isn't their path. Their timing isn't your timing. Their leverage isn't your leverage.

Housing is, without question, emotionally loaded. But the doom loop only has power if you hand it the pen and let it narrate your future.

Fight the story first, not the suburb. Every meaningful financial journey begins the same way: one decision, one habit, one step, repeated. Even if the barbecue guests roll their eyes.

Three ways to escape the doom loop 

The good news is that there are ways to challenge this type of thinking. Becoming unstuck from the doom loop and changing the conversation can help rewrite the narrative and open our eyes to new opportunities.

1. Build optionality, not fantasy

Rentvesting isn't surrender, it's strategy. Smart investors look for yield, not prestige. Pride is expensive; return on investment isn't.

2. Automate movement

Waiting until you feel ready to save is like waiting until you feel fit enough to go to the gym. The hack is automation. If $100 a week disappears into a housing account before you see it, you've created identity momentum, even when the headlines scream doom.

3. Recognise the emotional tax

Buying property is an ego gauntlet. Shame, envy, imposter syndrome and FOMO are the big ones. You'll make worse decisions if you pretend those feelings aren't there. People often overstretch out of pride. A house is a shelter and an asset; both lose value if you collapse under the weight of the mortgage.

This week on the Friends with Money podcast, Vanessa Walker, managing editor of Money, and journalist Ryan Johnson dive deep into the home-buying process for first-time buyers.

They discuss the essential steps from initial research, engaging with mortgage brokers and financial advisors, 
to pre-approval, making offers, and the final settlement. Get practical tips for navigating real estate websites, understanding mortgage pre-approval, and the importance of conveyancers.

00:20 First steps for first-time home buyers

01:38 Researching and narrowing down your options

03:05 Engaging with professionals: Mortgage brokers and financial advisors

05:42 Understanding mortgage pre-approval 07:51 Making an offer and preparing for settlement

10:25 Settlement day and moving in

Listen to this episode of Friends With Money

Listen on Apple Podcasts

Listen on Spotify

Watch on YouTube for closed captions

Subscribe to Friends With Money

Subscribe wherever you get your podcasts

Friends With Money podcast FAQ

What is the Friends With Money podcast?

Friends With Money is a weekly personal finance podcast by Money magazine, offering expert insights on investing, budgeting, superannuation, property, and other money strategies for everyday Australians.

Where can I listen to the podcast?

You can listen on Apple Podcasts, Spotify, or YouTube (with closed captions available).

Who hosts Friends With Money?

Episodes are hosted by Vanessa Walker and Tom Watson from Money magazine, featuring expert guests and real conversations about money.

Is the podcast suitable for beginners?

Yes! It's designed to be accessible for beginners while still offering valuable insights for seasoned investors.

What topics does the podcast cover?

The Friends With Money podcast covers topics including banking, property, budgeting, superannuation, investing, saving, insurance, employment, travel and more.

How often are new episodes released?

New episodes are released weekly, so you can stay up to date with the latest financial tips and trends.

Can I watch episodes with captions?

Yes, full episodes with closed captions are available on YouTube.

Why subscribe to the Friends With Money podcast?

Boost your financial literacy anytime, anywhere with the Friends With Money podcast from Money magazine. Whether you're commuting, working out, or relaxing at home, this weekly podcast makes it easy to grow your money knowledge on the go.

Each episode dives into real conversations about money - how it's earned, shared, saved, and grown - with tips and insights that make finance simple and relatable. Perfect for beginners and seasoned investors alike, it's your go-to guide for building better financial habits.

Records tumble as first homebuyers cash in on expanded Home Guarantee

First home buyers have piled back into the market after the Home Guarantee Scheme was uncapped, with the value of new loans jumping 15.5% in the December quarter. Fresh ABS figures show first home buyers borrowed $19.3 billion over the final three months of 2025 - the second-highest result on record.

Loan numbers rose 6.8% over the quarter. That's the strongest level since March 2022, but still well below the June 2009 peak of 49,499 loans when first homebuyer grants were expanded.

NSW saw the biggest rise in first home buyer activity, followed by WA and the ACT.

It wasn't just first timers. Total new home loans hit a record $108 billion for the quarter. Investors also stepped up, borrowing $43 billion (up 7.9%), another record.

However, that sentiment may change as calls for the capital gains tax discount to be scrapped are louder than ever.

The bigger story for many households is the size of the debt.

The average new owner-occupier loan climbed to a record $736,000, up $42,000 in just three months - about $457 extra borrowing each day.

In NSW, the average loan reached $873,000. WA recorded the fastest growth, rising $55,000 or 9% to $688,000.

Refinancing stayed strong too.

Even though switching numbers slipped 0.4%, borrowers moved more than $68 billion worth of loans to new lenders during the quarter as rate changes kept people checking their deals.

Super tax overhaul incoming

Labor is again trying to reshape the super system, this time pairing a tax break for low-income workers with higher taxes on very large balances.

Treasurer Jim Chalmers has introduced the Better Targeted Superannuation Concessions Bill, arguing it will make the system "fairer and more sustainable".

Under the proposal, people with super balances between $3m and $10m would pay 30% tax on earnings in that portion of their account, up from the current 15%. Balances above $10m would face a 40% rate.

About 90,000 people, or 0.3% of super account holders, would be affected.,

At the other end of the scale, the government plans to lift the income threshold for the low-income super tax offset (LISTO) from $37,000 to $45,000.

LISTO refunds the 15% tax paid on concessional super contributions so low earners are not penalised for putting money into super.

Raising the threshold would extend the benefit to an extra 1.3 million workers.

The government's previous attempt at super changes stalled after criticism that it would tax unrealised gains and was not indexed, meaning more Australians could be swept up over time. Those elements have been dropped from the new Bill.

The proposal now faces Parliament, where it is likely to trigger fresh debate over how generous super tax breaks should be and who should benefit most.

Aussie drivers stall on servicing and repairs in 2026

Nearly half of Australian drivers are putting off car servicing as household budgets tighten.

New research from iSelect found 49% of drivers have delayed a scheduled service.

About 23% are up to three months overdue, 12% are four to six months behind and 9% admit they are more than six months past the manufacturer's recommended service date.

To save money, many are ignoring smaller problems. Air-conditioning faults topped the list, followed by cracked windscreens and damaged side mirrors.

Some drivers also admitted putting off fixing worn tyres, dashboard warning lights and broken brake lights or headlights.

iSelect comparison expert Sophie Ryan says that's a risky trade-off.

"Vehicle safety is becoming another casualty of cost-of-living pressures," she says. "Issues like a cracked windscreen or faulty air-conditioning might seem minor, but they can get worse over time and cost more to repair."

Skipping a service can also have longer-term consequences.

Car makers set service intervals to catch problems early and check essentials such as tyres, fluid levels and the battery. Missing those appointments could void a new car warranty.

There's an insurance risk, too. If a car is found to be unroadworthy after an accident, an insurer may refuse a claim.

Bulk billing rates rise

Bulk-billing rates have lifted for the first time in months, following the government's $8.5 billion investment in Medicare.

New figures show the national bulk-billing rate rose to 81.4% between November and January, up from 77.6% in the previous quarter. It marks the largest quarterly rise in 20 years outside the pandemic period.

The increase follows the expansion of bulk-billing incentives to all patients from November, fulfilling a promise set out in last year's budget.

Previously, higher incentives applied mainly to children and concession card holders. Since changes in 2023, more than 90% of GP visits for those groups are bulk billed.

The government says more than 3400 practices are now registered as Medicare bulk-billing clinics, with about 1300 switching from mixed billing in recent months.

It estimates 96% of Australians live within a 20-minute drive of one, though some critics are sceptical of this number.

Health Minister Mark Butler says the shift shows incentives are working. However, some GPs remain cautious about whether payments will keep pace with rising practice costs.

Separately, the government will introduce legislation aimed at improving transparency in private healthcare.

If passed, it would require Medicare and private health insurers to upload specialist fees and out-of-pocket costs to the Medical Costs Finder website.

The Bill would also ban "phoenixing", where insurers close an existing policy and reopen a near-identical product at a higher price.

Aussies shop after dark

Late-night scrolling is turning into late-night spending for many Australians, and it's not always ending well.

New research from PayPal shows 79% of Australians have shopped online between 9pm and 5am. Nearly one in four say they do it at least monthly.

The Bedtime Browsing Report suggests fatigue is shaping what and how we buy.

About one in four late-night shoppers say they are more likely to make impulse purchases after dark. One in five spend more than planned.

Some 18% regret what they bought, while 16% have received parcels they forgot ordering.

There's also a scam risk. One in eight shoppers (12%) admit clicking a suspicious link late at night and 11% say they have landed on a fake website.

Most respondents (83%) believe tiredness makes it easier to miss red flags or small print.

Danielle Grant, consumer shopping expert at PayPal Australia, says late-night browsing has become a form of "me time" after long days, but judgment can slip when people are exhausted.

Her tip: pause before you pay.

Double-check website addresses, avoid rushing through checkout and use secure payment options. A few extra seconds could prevent an expensive mistake.

A Greens-led Senate inquiry, established in November and due to report by March, has reopened the debate, drawing sharply divided submissions from across the housing, finance and community sectors.

Fuel has been added by new figures from the Parliamentary Budget Office, which estimate the CGT discount will cost the budget $247 billion over the next decade.

The same analysis suggests the richest 1% of Australians will receive about 59% of the benefit this year, while people under 35 receive roughly 4%.

With Labor's housing agenda under pressure and affordability worsening, scrutiny is mounting on Treasurer Jim Chalmers ahead of the May Budget.

So, what exactly is the CGT discount, and why are calls to wind it back growing louder?

What is the capital gains tax discount?

Like negative gearing, CGT is most often discussed in a property context, but it applies to assets more broadly, including shares.

Capital gains tax is simply the tax you pay on the profit made when you sell an asset. Any net gain is added to your taxable income and taxed at your marginal rate. Your main residence is generally exempt.

Under current rules, Australian residents who hold an asset for at least 12 months can halve the taxable gain using the 50% CGT discount. Complying superannuation funds receive a one-third discount, while companies receive none.

Take a simple example. An investor buys a property for $600,000 and sells it 18 months later for $750,000. The capital gain is $150,000.

Because the asset was held for more than a year, only $75,000 is added to taxable income (ignoring other costs for simplicity).

CGT discount: How we got here

Australia introduced CGT in 1985 to broaden the tax base and close loopholes that allowed long-held gains to escape tax altogether.

Before the discount existed, the system relied on indexation (stripping out inflation) and an averaging rule to soften the impact of large, one-off gains landing in a single tax year.

While fair in theory, it was complex to administer, requiring costs to be indexed quarter by quarter.

In 1999, the Howard government scrapped indexation for new assets and introduced the flat 50% discount, arguing it would simplify the system and encourage investment.

Who wants what - and why?

With the inquiry open, submissions have poured in from industry groups, renters' advocates, economists and unions. Agreement is scarce.

Industry groups: keep it

Property and construction peak bodies argue the CGT discount is being blamed for problems it didn't create.

Master Builders Australia, the Property Council of Australia and the Real Estate Institute of Australia warn that cutting the discount would deter investors, reduce new housing supply and ultimately worsen rental affordability by reducing rental stock.

The Property Investment Professionals of Australia (PIPA) adds that policy uncertainty is already unsettling landlords.

Its 2025 Investor Sentiment Survey found 35% of investors would stop investing if the discount were cut to 25%, while 16.7% sold at least one property in the past year.

Not everyone agrees. The Planning Institute of Australia argues the discount reinforces speculative behaviour, contributes to spatial inequality and works against well-located housing supply.

Renters' advocates: scale it back

Groups such as Better Renting and the Tenants' Union of NSW want the discount reduced or removed for investment properties, with savings redirected to social and affordable housing.

They argue the CGT discount, when paired with negative gearing, encourages highly leveraged churn, pushing up prices while increasing instability for tenants.

Community organisations: reduce and reinvest

Housing and welfare groups - including the Council to Homeless Persons, Q Shelter, HAAG, Vinnies and ACOSS - support reducing the discount and recycling the revenue into social housing and rent assistance.

Their central argument is equity: the gains are heavily skewed toward higher-wealth households.
The Abundant Housing Network Australia agrees there's a strong tax and budget case for reform, but cautions that CGT changes alone won't fix affordability.

Research from the Grattan Institute suggests trimming the discount would reduce house prices by less than 1%, while planning reform and allowing more homes in established areas would have a far larger impact on prices and rents.

Unions: targeted cuts

The Australian Council of Trade Unions supports reducing the discount to 25% beyond one investment property and limiting negative gearing to a single property, with proceeds used to co-fund public housing and improve rental energy efficiency.

Politics: lines hardening

NSW Treasury has even urged Canberra to rethink the discount, arguing it boosts investor purchasing power and disadvantages first-home buyers.

The Coalition has signalled it would oppose changes, though an AFR report suggests some within the party are urging caution.

Greens senators Nick McKim and Barbara Pocock, who initiated the inquiry, argue the discount overwhelmingly benefits wealthy investors, worsens affordability and undermines tax fairness.

They want it scrapped and the savings invested directly in social and affordable housing.

The bottom line

The fault line is clear.

Builders and real estate groups say: don't touch the discount and fix supply.

Renters' advocates, social services and many economists say: trim a tax break that fuels investor demand... and build more homes.

Whether the Senate committee recommends a middle ground, such as cutting the discount to 25%, grandfathering existing investments, or limiting concessions to new builds, is now the question to be answered in March.

And whether the government listens to those suggestions will be answered in May.

New research from property analytics firm Cotality shows 87% of the 1100 real estate and finance professionals surveyed for its Decoding 2026 report expect home prices to rise over the year ahead.

Almost half expect growth above 5% while just 3.5% are bracing for falls.

That optimism comes off a strong 2025. National dwelling values climbed 8.6%, adding about $71,400 to the median home, according to Cotality's Home Value Index.

PropTrack's numbers painted an even brighter picture, with homeowners up roughly $81,200 in equity over the year.

But the new year brought narrowed confidence.

"Housing conditions were strong through most of 2025," says Tim Lawless, Cotality's research director.

"However, national averages distort the variation of performances and market conditions at a local level, and it's those differences that are becoming more important as affordability and policy settings diverge."

Smaller states are doing the heavy lifting

The smaller states are shaping up as the standout markets heading into 2026.

Down south, the Apple Isle took the chocolates this year, with 92% of professionals forecasting the Tasmanian market to rise. However, three-quarters think the growth will be modest, under 5%.

In Queensland, 89% of respondents expect prices to rise, with half anticipating house price growth of more than 5%. In Western Australia nine out of 10 agents expect price increases and just less than half are forecasting those gains to be above 5%.

South Australia rounds out the top three, remaining comparatively cheaper than its eastern neighbours.

Lawless says the trends pushing this optimism has been in place for several years.

"Strong internal migration across Queensland and WA, relatively better affordability compared with Sydney, and a persistent shortfall in housing supply have combined to support stronger price growth, and those factors remain largely intact."

Conversely, Victoria is the state least likely to grow, according to professionals, with almost one third expecting growth below the national average.

At the end of 2025, Victorian dwelling values remained below their March 2022 peak as higher property taxes, reduced investor participation and a recent history of weaker interstate migration shaped market outcomes.

"Victoria stands out for the scale of investor selling," says Lawless.

"The cumulative impact of policy changes and higher holding costs has weighed on investor activity, even as first home buyers now account for the largest share of lending across the states."

For buyers, it reinforces the point that national numbers matter less than where you're buying.

It's also why understanding what a home is really worth (not just what prices are doing) has become more important.

First home buyers are active but boxed in by caps

Government support is still driving activity at the lower end of the market.

More than 75% of agents say buyer activity picked up after the expansion of the First Home Guarantee. Competition has been fiercest around scheme price caps.

Since October, more than 21,000 first home buyers have accessed the expanded 5% deposit scheme.

However, fewer than half of Australian suburbs now sit below First Home Guarantee price caps, down sharply from a year earlier.

It's one reason shared-equity options, such as Help to Buy, are drawing more attention, even as buyers weigh the trade-offs that come with them.

Crystal ball: What the big forecasts say

Cotality's outlook is broadly in line with other forecasts.

In November, SQM Research published a more bullish view of the market, with forecasts of some cities up as much as 21%. However, that was before calls for interest rate hikes ticked back up after inflation data dampened optimism.

More recently, Domain expects about 6% growth across combined capital cities in 2026 while realestate.com.au is tipping 6% to 8%.

The difference this time is what sits underneath those numbers. With affordability limits firmer and the cash rate less certain, performance will vary more widely by regional factors.

"The market is entering 2026 from a position of strength however there is a cloud of uncertainty around inflation and interest rate settings as well as affordability challenges, all of which are likely to weigh on housing confidence," says Lawless.

That uncertainty cloud comes with the caveat that predicting cash rates and property market forecasts are notoriously tricky at the best of times.

In March 2021, Philip Lowe, the RBA's then-governor and a key person in charge of managing the cash rate, said to Australians that the cash rate would remain at 0.1% until 2024. After inflation rose due to the lingering effects of the COVID-19 pandemic, the cash rate rose to its highest point in 13 years.

The point is that while we can take the best educated guess with the latest information available, but there is no crystal ball sitting at the tables of economists, the RBA, or at Parliament House.

AI can now lighten rooms, remove clutter, replace furniture and insert features that don't exist. When these edits are used without clear disclosure, buyers may be forming expectations about a home that no inspection can meet.

As regulators play catch-up, the responsibility for accuracy still sits squarely with agents.

In October 2025 alone, more than 13 million Australians visited listing platform realestate.com.au. As a highly visual medium, online platforms have helped fuel demand for compelling photos.

But in this digital age, photographs may not always be completely accurate.

One Reddit user reports seeing a home advertised for sale, with images showing a big deck, thriving veggie patch and a straw-roofed hut described as a 'meditation room'.

An inspection revealed the deck was taped off due to rotting and unsafe timbers, the veggie patch was a weed-filled dust bowl, and the meditation hut had been split in half by a fallen tree. Apparently, the listing photos dated back to when the home was first built - 30 years ago.

How professional staging pushes up property prices

An increasingly popular trend is professional 'home staging'.

That's where the owner's much-loved though less photogenic furniture is replaced with rented designer furnishings.

It's legitimate, and it can be financially rewarding.

Stewart Bunn, communications and corporate affairs manager at First National Real Estate, says home staging can add around 5-10% to a final sale price.

The catch is that professional staging doesn't come cheap.

According to Hi-Pages, home staging can cost from $1500 to $8000-plus. This doesn't include the cost of offloading your old furniture, or paying for storage while it's hidden from public view.

The rise of artificial intelligence (AI) has seen a far cheaper solution emerge.

The rise of virtual staging

'Virtual' staging refers to the practice of editing photographs to fill empty spaces with new furniture, removing clutter from furnished homes, or making a property appear lighter and brighter.

For the seller, virtual staging can be quick and affordable. It can cost as little as $45 for one room if the process is outsourced to a third party.

Even that modest fee is being driven down by AI. Some services charge as little as 23 cents per image for virtual staging.

This raises two issues:

Is virtual styling any good?

That's debatable.

Home buyers tend to be a canny bunch. They are, after all, making one of the biggest purchases of their life. So it's natural to take a close look at what's on offer.

And alas, virtual staging can be heavy-handed.

A Melbourne villa advertised for sale in late 2025 featured a kitchen that differed markedly between shots - something likely to raise buyers' eyebrows.

Is virtual styling even legal?

Under Australian Consumer Law, which is administered by the Australian Competition and Consumer Commission (ACCC), selling agents must provide truthful and complete information about a property including its features.

However, the ACCC doesn't handle laws specific to property sales and rentals. These come under state and territory control though the basics still apply.

Real estate agents in NSW, for example, must ensure photos used to advertise homes are accurate, clearly labelled, and not misleading.

Similar rules apply in Queensland. Digital 'enhancements' that artificially lighten the colour of walls, or alter rooms or outdoor areas to look bigger than they really are, are regarded as misleading.

Even so, as Stewart Bunn points out, "Low-quality AI virtual staging absolutely pushes into risky territory.

"If AI alters layouts, finishes, fixtures or sightlines in a way that a reasonable buyer could rely on, the risk is real, even if a disclaimer is included."

How agents are editing images to add non-existent features

At the thin edge of the wedge, one Reddit poster came across an ad for a Queensland property featuring a swimming pool with an attractive water fountain.

The issue? Neither the pool nor water feature are real.

While the ad noted the image was digitally altered "for illustration purposes", Bunn cautions, "That is drawing a very long bow."

He adds, "Even where an image is labelled or disclosed, the initial visual impression carries weight.

"Buyers scan listings quickly. Many will see the image before reading the fine print.

"If the headline image depicts a feature that does not exist, such as a pool, the advertising is skating dangerously close to being misleading."

Bunn continues, "From a professional standards perspective, this is behaviour the industry is actively discouraging."

Reddit users were also critical of the practice.

"Even ignoring the ethical issue here, this is so stupid," commented Reddit user Lucky-day00.

"If I want a house with a pool, I'll go to check the place out, see it has no pool, and move on. And probably actively avoid listings from that agent because they waste my time.

"Or, if I actively don't want a pool (which is the case for me), I'll see the pool in the ad and move on.

"It repels both markets."

Another user, Extension_Branch_371, said: "This needs to be made illegal if it isn't already. And realestate.com and domain etc need to stop accepting these photos."

While parksofficeninenine added, "Wtf is even the point. If every house for sale has a photoshopped pool there would be no point in looking at houses. It just becomes pictures on the internet... Get this shit off real estate listings."

New NSW laws aim to stop misleading rental listings

In mid-2025, the NSW state government introduced legislation that doesn't just safeguard the personal details of renters, it also requires disclosure when images in rental ads have been altered to conceal faults.

It's a step in the right direction, especially as Sydney's vacancy rate is a wafer thin 1.8%.

More broadly, for the one in three Aussies who rent their home, time wasted checking out dud properties can mean missing out on a decent rental.

How California is cracking down on AI in property images

On the other side of the world, the US state of California has introduced new laws, effective January 1, 2026, which require real estate professionals to disclose the use of digitally altered or AI-generated images in property advertising.

Anything from minor edits (like lighting) to substantial changes such as adding or removing grass must be declared to give buyers a clearer, more accurate visual understanding of a home before they visit.

It's a fair bet that right now plenty of Aussies aren't sure about taking a leaf from any US playbook.

But legal requirements to show a property for what it really is can save valuable time as 2026 shapes up to be a competitive market for buyers.

Reader question

Hi Paul,

My partner and I, both 24 years old, have just purchased our first property together - a unit in Sydney - with the help of the government's first-home buyer scheme.

We were often told that now was the right time to buy, and after a seven-month search, we decided to take the plunge. We both work full-time and are already thinking ahead - our goal is to build a property portfolio and purchase a second property within the next two years.

We have a dog - Amora, a three-year-old Border Collie, so upsizing to a home with a backyard - and more bedrooms - is a priority for us.

We understand we'll need to stay in our current property for at least a year before considering any moves. So we're taking this opportunity to look at our options. Our mortgage is $660,000 and we have a redraw account.

With our mortgage, at what point would you recommend purchasing a second property if we were to use the equity from our first home to upsize? - James

Paul's response

You know James, my family and friends often ask why, after more than 40 years of answering people's questions on TV, radio and in Money magazine, at the age of 70 I still enjoy doing this.

The answer is that I love hearing people's stories and having a crack at answering their questions. Sure, I don't get a lot of information in a hundred or so words, but I feel that I get the essence of what is happening in people's lives.

We all have different challenges with our personal finances. There are many ups and downs in life and one way or another, money plays a part. This is normal life. I try to answer based on the practicalities of money, but I also try to bring my own experiences to the story.

So, your story made me smile. It is not often I hear from two 24-year-olds who have purchased their first property and are planning their next acquisition. What I also enjoyed is that you added a bit of colour for me - your three-year-old Border Collie. Let's chat about that later.

Hearing from your generation gives me so much pleasure. Our kids are in their early to mid 30s, and much to our son's alarm, he is nearly 40. We have four grandkids, all under six. Despite starting small investments for them, and the older three are now quite interested in their bank account, for them money is just something to be converted into toys.

What I much enjoyed about your email was that at 24 I was yet to meet my wife, Vicki, and a bit like my grandkids, I saw money as something to be converted into goods, in my case, beer or golf balls.

You two are all over the fundamental principles of money. The earlier you start the better, as you let compound returns work for you. Somehow, and I'd love to know how, you have started the wealth creation process very early in your lives.

Maybe it was your parents' influence.

Interestingly - and listen up parents (and grandparents) - it does not seem to matter whether your parents were good or bad with money, the critical factor is that money, for better or worse, is discussed at the dinner table, in the car or wherever the subject pops up. In the area of financial literacy, we see kids who are good with money regardless of their parents being good, bad or indifferent with money.

The main factor seems to be that money is not some hidden secret, it is discussed as the kids grow up.

Doing all the right things

Whatever the reason, you are both good with money. I don't need to be Albert Einstein to work this out. You've sussed out the first-home buyer scheme and taken advantage of it to buy your first home.

You also have a redraw account, which along with growing equity in your apartment becomes the way you purchase your next property. All this also tells me you understand saving. Too many people don't. Saving does not happen by accident. It comes about because you spend less than you earn.

At some stage you may decide to start a family, so now is a good time to invest with two incomes, but please don't leave yourselves with no lifestyle options after your repayments on two properties.

I'm not particularly concerned about diversification at this early stage in your lives, that can come later. It is early days in the wealth-creation process for you both, but compulsory super will be starting to do this for you. The next bit you can do yourself. The size of your next mortgage is a direct reflection of what you are earning and can save. As two smart young people, it is hardly likely that at age 24 your salaries have peaked out.

Keep building wealth

Continuing to build up your asset base will pay big dividends in time to come, so buying an investment property in the next couple of years makes sense to me.

My only concern would be that you overextend yourselves. Using the equity in your home is fine, but it is the repayments I am concerned about.

The rent generated would cover a fair bit of your mortgage repayments, but obviously you would also have insurance, rates, agent fees, maintenance and so on. Costs in excess of your rent would, of course, be tax deductible, which should help a lot.

Remember that you have, in all likelihood, four or more decades of work ahead. Mind you, the way you are going, financial independence is likely to come early for you both, but a key part of your money planning is to have fun. Vicki and I had next to no money when we met, but our first step was to plan a trip to Europe.

Our primary funding mechanism for that was a giant beer can money box. We put our change in it every day after work, and after a year we had our spending money. I can appreciate this concept won't work in a world of tapping your cards, but our money box beer can was an excellent form of saving.

Finally, your Border Collie. As our kids grew up we had a Beagle for some 14 years. Winston was the most gorgeous, lively, heedless animal I have ever met. We loved him. But our middle daughter and son-in-law have a Border Collie. He is a terrific dog who comes to us quite a bit.

It is such a shock to have a granddog that not only does not open the fridge and consume the contents, he does not hide and bury remote controls and mobile phones, but listens and is obedient!

To finish with a money analogy, I am glad you two are not the Beagles of money. I and all the team at Money wish you long, happy lives. I know I don't need to worry about money with you both, just keep doing what you're doing.

Whether you're buying or selling a home, looking to refinance your mortgage or wanting to access equity you've accrued, a formal property valuation can be a key part of the process.

So, what do existing homeowners and potential buyers need to know about the different types of valuations that exist and the process involved?

Read on for a run-through of some of the fundamental elements of property valuations.

1. What is a property valuation?

In short, a property valuation is an independent analysis conducted by a professional valuer designed to provide an assessment of a property's market value.

"A valuation from a qualified professional should give you the transparency of process, ethical and procedural rigour and the confidence to rely on the assessment value," explains Kevin Brogan, a certified practising valuer and the national director, group risk and compliance at Herron Todd White.

"It could be related to some form of property settlement, family law scenario or mortgage security. So, there's a variety of motivations for obtaining a valuation in the first place."

 

 

 

 

View this post on Instagram

 

 

 

 

 

 

 

 

 

 

 

A post shared by Money Magazine Australia (@moneymagaus)

2. When are property valuations needed?

As Brogan notes, there are a plenty of situations in which a formal property valuation could be useful or even necessary. Here are some of more common ones:

Buying or selling a property

Perhaps the most obvious is during the buying or selling process of a property.

For instance, a seller may organise a valuation to provide them with a guide when listing their property for sale, while a buyer may be interested in ensuring that a home they plan to bid on in is priced accurately and fairly.

The mortgage process

Brogan says that property valuations are a critical part of the mortgage approval process - whether that's someone taking out a brand new loan or refinancing an existing one.

In this situation, lenders need to be confident of the value of the asset (the property) being used as security, so they may either require a valuation or assessment depending on the risk involved.

"Lenders can have, if you will, a risk matrix. Let's say you want to borrow 50% of the value of the property and you have been in permanent employment for a decade, the bank might decide to get get what's called a desktop assessment," Brogan says.

"Whereas for higher-risk lending, lenders may get a valuation because they actually want to know about the condition of the property, as well as other factors that might not directly impact its market value."

Tapping into equity

It's a similar situation for homeowners who are looking to make use of any equity they may have built up over the years to borrow from their lender.

That could be to do anything from conducting home renovations to purchasing an investment property.

In order to see how much equity has been built up though, the lender will need to get an idea of the current market value of the property.

Family court matters

It's not uncommon, according to Brogan, for professional valuers to be called upon during matters like divorces in order to independently assess the market value of a property during the separation of assets.

"With something like a family law situation, one party will be hoping for more, in terms of the value, and one party will be hoping for less, in order to benefit their settlement position.

"What can be helpful in that environment is if both parties instruct a valuer to undertake the valuation. That reinforces the independence and the valuer's duty is actually to the court, not either party."

3. What is assessed during a property valuation?

The thoroughness of a valuation will ultimately depend on the level of depth required by a client. However, in the case of residential property valuations, a valuer would typically look at:

• Layout and size: This not only includes the layout of the home, the size of the building and the plot of land it's on, but the aspect of the property and even the shape of the land
• Development potential: If it's called for, a valuer may look at whether the property has any future development potential or restrictions that would impede development
• Condition and risks: Are there any risks or essential repairs that may impact market appeal? For example, a missing roof tile that - while relatively cheap to fix - could put the structure at risk
• Comparable sales: How have homes with similar attributes in the area performed recently when they've gone on the market
• Location: Where the property is situated in a particular suburb or town and whether the local economy is strong, stable and likely to uphold demand for properties
• Market direction: Is there strong and continued growth affecting property values in the area, or is growth subdued or non-existent

Brogan says that all of that information will form the basis of the analysis which, along with measurements of the home and photos of key features (such as rooms like kitchens and bathrooms or any notable defects) will be presented the valuer's report.

4. How do valuations differ from price estimates or appraisals?

There are a number of different ways for owners to get an idea of the value of their property - each with differences that may be worth appreciating.

Formal valuations

Formal valuations are performed in person by independent, professional valuers. The assessment is likely to include an analysis of many of the features outlined above in order to provide a reliable indication of a property's market value.

Desktop assessments

In some situations, lenders may decide that a full valuation of a property is unnecessary because the borrower is relatively low risk. Instead, they might employ a valuer to conduct what is known as a desktop assessment.

"In a desktop assessment, the valuer doesn't inspect the property, so it doesn't qualify to be termed a valuation. But that may be perfectly fine for the purpose and the risk profile," Brogan says.

"Any valuer undertaking a desktop assessment is required to have the relevant knowledge, skills and experience gained by undertaking valuations in the locality though. So, it's not acceptable for a valuer based in Adelaide to do a desktop of a property in Canberra."

Automated Valuation Models

Some homeowners will have come across price estimates on property platforms like Domain or realestate.com.au in the past. These platforms, Brogan says, use Automated Valuation Models (AVMs).

"An AVM will look at a tremendous volume of data held within a property database to come up with a likely price estimate. These can be quite accurate, but the data quality varies from location to location, because some markets are more active than others.

"It's also important to note that an AVM does not follow professional valuation standards. It's a statistical algorithm-based analysis, but it does not follow the recognised valuation approach.

"So, if you're wondering what your house is worth and the AVM tells you a million dollars, that might be reasonably accurate. But if you're making a financial commitment by selling your property, you'll have to consider whether you're happy using that or getting a professional valuation."

Real estate price appraisals

Many owners are likely to have received flyers in their letterboxes offering free price appraisals from their local real estate agents.

So just how accurate are these? Ultimately that will depend on the skill of the individual, but it's worth bearing in mind that real estate agents aren't necessarily qualified valuers.

"Real estate agents will, in some cases, be looking to secure you as a client when providing you with an appraisal figure," Brogan says.

"Now I'm not suggesting that they deliberately inflate their estimates, but clearly one of their aims will be to secure you as a client against the competition."

5. How much will a property valuation cost?

The price of a property valuation will vary from case to case depending on the complexity of the assessment and even the location of the property (if it's in a more remote location that requires travel).

"If you're an individual looking for a valuation of your house for your own interest, I would suggest that it would be in the hundreds of dollars, but less than $1000," Brogan says.

"If you're in a family law situation, which is more complex, I would suggest that it is probably going to be above $1000."

This week on the Friends With Money podcast, Money's Tom Watson is joined by Jack Elliott, mortgage broker and national first home buyer specialist at Alcove and First Home Unlocked, to discuss shared equity schemes and the first home buyer market.

00:00 Introduction

01:31 Understanding shared equity schemes

03:27 The federal government's Help to Buy scheme

03:55 Eligibility and key points of Help to Buy

06:43 Considerations and drawbacks of shared equity schemes

13:35 Market insights for first home buyers

16:19 Final words of advice

18:03 Conclusion

Listen to this episode of Friends With Money

Listen on Apple Podcasts

Listen on Spotify

Watch on YouTube for closed captions

Subscribe to Friends With Money

Subscribe wherever you get your podcasts

Friends With Money podcast FAQ

What is the Friends With Money podcast?

Friends With Money is a weekly personal finance podcast by Money magazine, offering expert insights on investing, budgeting, superannuation, property, and other money strategies for everyday Australians.

Where can I listen to the podcast?

You can listen on Apple Podcasts, Spotify, or YouTube (with closed captions available).

Who hosts Friends With Money?

Episodes are hosted by Vanessa Walker and Tom Watson from Money magazine, featuring expert guests and real conversations about money.

Is the podcast suitable for beginners?

Yes! It's designed to be accessible for beginners while still offering valuable insights for seasoned investors.

What topics does the podcast cover?

The Friends With Money podcast covers topics including banking, property, budgeting, superannuation, investing, saving, insurance, employment, travel and more.

How often are new episodes released?

New episodes are released weekly, so you can stay up to date with the latest financial tips and trends.

Can I watch episodes with captions?

Yes, full episodes with closed captions are available on YouTube.

Why subscribe to the Friends With Money podcast?

Boost your financial literacy anytime, anywhere with the Friends With Money podcast from Money magazine. Whether you're commuting, working out, or relaxing at home, this weekly podcast makes it easy to grow your money knowledge on the go.

Each episode dives into real conversations about money - how it's earned, shared, saved, and grown - with tips and insights that make finance simple and relatable. Perfect for beginners and seasoned investors alike, it's your go-to guide for building better financial habits.

Reader question

Hi Paul, my husband and I are wondering if we are planning intelligently or losing the plot.

He is 75, I am 72, both with super funds in pension mode, collective income about $180,000. We have about $500,000 in the bank, and about $50,000 in direct shares.

We have a 200-acre farm with a house and the land leased out in South Australia's mid-north (currently recovering from drought) that we use from time to time to visit one half of our family who pay for the privilege of using the land, which is valued at about $600,000.

We have owned an investment property, a '60s house in an inner northeastern suburb of Adelaide for a while and it's getting tired. We've been offered $700,000 for it as is by developers.  We have embarked on subdividing the block and building one three-bedroom rooming house (SDA Improved Liveability standard) and a two-plus-one carer SDA Fully Accessible standard house.

We are budgeting a total cost for the development of $970,000, resulting in a value of $1.8 million and an income increase from $30,000 to $127,000 (less expenses) and a loan of $600,000 (and one or two years without the $30,000 rent).

Our object is to provide a 20-30-year legacy for our six grandchildren to share through a testamentary trust. Have we lost the plot or is it a sensible plan? We're long-time readers of Money. - Lynda

Paul's response

No Lynda, you have not lost the plot. At your ages of 72 and 75, I do get nervous about risk and the permanent loss of capital. I should say I am 70 and my wife is 69. Due to this, we've moved into debt-free mode, but our investments remain very heavily growth orientated.

We like to have a couple of years cash to carry us through an inevitable big market downturn at some stage, don't ask me when or why, but every century we seem to get around three of these. I'm not silly enough to argue against thousands of years of history.

Initially, upon quickly reading your email, I thought uh oh debt in your seventies. But when I did a careful read I saw that on top of a large pot of super that is generating $180,000 a year for you, you have $500,000 in cash. You will, I assume use some of this for the development, plus the $600,000 loan.

In an emergency, your super, which is fully accessible to you, would easily cover the loan. But please spend some time making sure you have carefully planned for the downside. As you know the rule to look after kids and grandkids is to first and foremost be financially secure.

I can see the safety argument you would make. You will own your home, you have equity in the farm and a lease payment for its use. There is a stack in super, your cash, plus $50000. The Adelaide property market is very strong and many big projects in South Australia mean many jobs. I can see that another safety valve is an ability to sell the project partially completed.

In summary, while debt in our seventies is not my favourite, I can see your 'safety cover' if things go wrong. As you know, there will be some stress points building the property, but that is pretty normal.

On a positive note, I love what you are doing for the grandkids. What a great legacy. I note it goes into a testamentary trust, great idea. I presume your kids will be trustees? The fact you have set up this trust as part of your estate planning means you have had legal advice and I am sure you have considered how the six grandkids will be treated if in decades to come, one needs money for one reason or another.

You can't solve every problem regarding the grandkids in a couple of decades, it depends how their lives pan out, but it makes sense to have a structure that copes with drama.

Reader question

Hi Paul, I'm 74, own my home outright but due to my health am thinking of selling and buying a property that can accommodate myself and my two adult children (they are 55 and 50).

They don't yet own a home but could afford a mortgage so we thought we could all put in and get something that suits us all.

However I want to retain my pension. Who do I speak with to see if this is possible? - Sue

Paul's response

My mind is flashing 'danger, danger', Sue. I can see how this could work really well. I can also see how it could be a complete disaster.

Obviously, I don't know you or your adult kids, but as you live together you obviously get on well. As you age, living with your family would have real benefits. But here, I need to point out the problems that could crop up.

First, your own home, as you know, is an exempt asset for the age pension. It is also a fabulous, secure asset for you. If you sell and use some of the money to buy a home with your children, you can have quite high assets and keep a full pension.

This is up to $321,500 for a single, homeowner aged pensioner. Services Australia can give you specific advice about the impact on your pension under both the assets and income test.

Frankly, though, while important, this is one of my lesser concerns.

What really worries me is that if you buy a home, as tenants in common with your kids, each owning a percentage related to how much you each add in cash (in your case) or a mortgage for the kids, if for any reason they can't pay the mortgage repayments, exactly what happens?

I know this is an extreme comment, but are you out on the street with a forced bank sale of the home?

In my opinion, the first person you speak to is a solicitor to work out how you can own a home with your children, without you risking your financial security. A written agreement drawn up by your solicitor will be essential. Then it is talking to a lender with your kids and see what loan capacity they have.

Sue, you sound like a lovely person who has done much for your kids and wants to do more. That is super generous and it may work beautifully. But you must speak to a solicitor first and protect your lifetime of work and your future security that is currently tied up in your home.

With high property prices, flat wage growth and stricter lending rules, the idea of the government covering up to 40% of a property's cost is attractive.

After it all, it makes saving a deposit easier and reduces the pressure of loan repayments.

But shared equity is not a simple shortcut into the market. It's a co-ownership arrangement: the government takes an equity stake in the property, and you buy it back over time or when you sell.

For some households, this structure makes home ownership possible. For others, the obligations and long-term costs may outweigh the benefit.

Here's how the scheme works, who it's most likely to help, and the risks every buyer should consider.

How the Help to Buy scheme works

Help to Buy is open to first-home buyers and "returning buyers" - those who previously owned but no longer hold property. Under the scheme, the government contributes:

• Up to 40% of the price of a new home
• Up to 30% for an existing home

The buyer borrows the remainder, reducing the deposit required and lowering repayments.

The government's share goes up or down with the property's value because it matches its contribution.

The scheme also helps borrowers avoid lenders mortgage insurance (LMI), which is usually charged when the deposit is less than 20%.

If you choose to take part in the scheme, you'll be answering to Housing Australia, the government's independent housing agency.

The program is available in most states and territories, with WA and Tasmania expected to join once legislation passes. Commonwealth Bank and Bank Australia are the initial participating lenders, with others joining in 2026.

Who is eligible?

Eligibility rules are strict. Applicants must:

• Be Australian citizens aged 18 or older
• Earn up to $100,000 as singles or $160,000 as couples or single parents
• Live in the home they buy
• Purchase under local price caps (shown below)
• Secure a loan with a participating lender

Only 10,000 places are available each year for four years.

Who Help to Buy is most likely to help

While first homebuyers are the main target, the scheme supports a wider group of households in specific circumstances.

1. Buyers who fall short on borrowing capacity

Some households can save a deposit but can't borrow enough to meet rising local property prices. Help to Buy can bridge that gap, contributing the portion a bank won't lend and reducing the loan to a manageable size. This can bring ownership forward by several years for buyers stuck between saving and market growth.

2. Single parents needing to buy out an ex-partner

In separations, one parent may wish to keep the family home but lack the borrowing power to purchase the other party's share. Mortgage broker Nick Rabba says the scheme can fill that shortfall when a borrower has equity but insufficient borrowing capacity, allowing them to retain the home and avoid being forced to sell.

3. Families transitioning to a larger home

Households needing more space may use the scheme to upsize while staying in their preferred suburb or school catchment. Eligible buyers can settle on a new property first and sell their existing home within four weeks, easing the transition without relying on temporary rentals.

The risks and obligations buyers need to know

Help to Buy lowers the upfront cost of purchasing a home, but shared equity creates long-term trade-offs that buyers need to understand clearly.

1. You only own your share until you buy it back

While shared equity is complex, Mortgage broker Joseph Daoud from It's Simple Finance says its vital people know the government co-owns the property.

"When you sell, the government receives the same proportion of the sale proceeds as the equity it contributed," he says.

That means buyers only benefit from growth on their portion. Importantly, the value of the government's share is based on the property's value at the time of sale, not a fixed dollar amount.

For example, on a $750,000 home where the government contributes 20%, a future sale at $1 million gives the government a $200,000 share - not the original $150,000 contribution.

Daoud says this is the case even if the property has stagnated or fallen in value.

While this is how shared equity is designed to work, it can limit long-term wealth building for buyers who anticipate strong price growth.

"You will still need to repay the government's initial contribution. You may not build as much equity as you would with a larger deposit."

2. Buying out the government can cost more than expected

Buyers can increase their ownership over time by repaying the government's share in 5% increments or when they sell. They can also refinance through a participating lender later to reduce the government's stake.

But again, the repayment is based on the current market value, not the original purchase price.

Daoud says this could surprise buyers: "If prices rise significantly, the cost of buying out the government rises too."

3. Strict rules continue long after settlement

Eligibility doesn't end once you move in. Buyers must continue to meet stringent conditions to occupy the home.

"You must remain within the income thresholds and live in the home; turning it into an investment property isn't permitted and could result in penalties or removal from the scheme," Daoud says.

Also, if you happen to get a pay rise and your income exceeds the thresholds - $100,000 for singles or $160,000 for households - you may be required to start buying back the government's stake sooner than planned.

There are some perks: Buyers would get to keep the percentage difference in value after major renovations.

However, renovations over $20,000 renovations require approvals and valuations, and buyers who fail to follow the process may not receive credit for improvements.

4. You carry all the costs of ownership

Despite co-owning the home, the government doesn't contribute to any ongoing expenses.

Daoud explains: "You're responsible for stamp duty, rates, maintenance and insurance - the government doesn't cover these despite benefiting from the capital gains."

5. Income caps don't reflect reality

You are not automatically guaranteed a home loan even if you meet the eligibility requirements for Help to Buy. You will first need to have your income and financial capacity assessed to see if you are eligible for a home loan from a participating lender.

So, despite having wide-ranging income caps, Daoud says Help to Buy would only target a narrow group of buyers.

"The limit in New South Wales is $1.3 million," he says. "In practice, someone earning under $100,000 with no other liabilities might only be able to borrow around $550,000, and even with the government's help, would fall far short of the price cap."

6. The scheme adds demand without adding supply

While it will help a small group of buyers, Daoud says the broader effect is to inject more demand into a market where supply is already constrained.

Daoud warns that because it doesn't add new homes, it could fuel demand and push prices higher.

"Without more housing supply, demand-side assistance risks inflating prices rather than improving affordability," he says.

"A sustainable solution requires streamlining planning approvals, investing in infrastructure and encouraging new construction, so affordability improves across the board."

Who the scheme may not suit

Help to Buy is not for everyone. It may not suit:

• Buyers uncomfortable with long-term co-ownership
• Those planning to convert their home to an investment property
• Households expecting rapid income growth
• Anyone wanting full control over capital gains

Bottom line

Help to Buy offers a meaningful path into home ownership for some Australians, particularly those caught between saving a deposit and keeping pace with the market.

But the trade-offs are significant. Shared equity limits how much wealth you can build, and the rules and obligations continue long after settlement.

For the right buyer, the scheme can be a helpful leg-up. For others, the long-term costs and restrictions may outweigh the benefit. As always, independent financial advice is essential before signing on.

Reader question

Hi Paul, my wife is 60 and I'm 57. We both work permanent jobs, me full-time and my wife permanent part-time.

There are some companies saying we can access a reverse mortgage loan from age 55. Can you offer advice on this and recommend a suitable broker?

We plan on using the money to renovate. - Mark

Paul's response

No, let's not do this, Mark. I am a strong supporter of the concept of a reverse mortgage, but with many caveats.

I think they can work well for older Australians. Quite frankly, the older you are the safer they are, but a reverse mortgage is compound interest in reverse.

Also, they can be expensive. Expect to pay close to 9% interest, plus application fees. At ages 57 and 60, this could really build up a lot of debt quite quickly.

I would argue they are valuable for an older couple, in particular, a couple receiving a pension. In this instance, they can apply for a Home Equity Access Scheme via Services Australia. As a government initiative, the interest rate is terrific, 3.95%.

In your case, you both have permanent jobs, one full-time and one part-time. I don't want anyone selling you a high-interest reverse mortgage.

My view is that you should apply for a mortgage, where you would be paying interest of about 5%.

I understand you may have cashflow issues and want a reverse mortgage so you can renovate, with no repayments. But at quite young ages, I really fret about how this debt will compound over time.

Sure, you may have many personal issues driving this idea that I don't know, maybe you have no dependants you wish to leave money to or any number of specific personal reasons for seeking 
a reverse mortgage.

Before committing to a reverse mortgage, please do your research carefully and understand the impact of the building debt against your home. Above all, it is essential you talk to an experienced solicitor before signing a reverse mortgage contract.