Investor participation at auction is recovering after a sharp fall in the wake of May's federal budget housing tax measures, according to new analysis from Ray White chief economist Nerida Conisbee (pictured), though she has cautioned against reading too much into the rebound.
The reforms at the centre of the slowdown scrap the 50% CGT discount in favour of cost base indexation and limit negative gearing to newly built properties from 1 July 2027, though existing investment properties are grandfathered under the current rules. Not everyone expects a lasting shake-up as a result.
Ray White's own numbers offer a granular read on how buyer behaviour has actually shifted since the reforms landed. Conisbee's analysis draws on more than 64,000 auction campaigns since the start of 2022, covering roughly one in four auctions held across Australia.
"The housing measures announced in the federal budget on 12 May were intended to reduce the number of investors buying established properties," she said. "In the weeks immediately following the budget, the early evidence suggested this was occurring."
In the nine weeks after 12 May, investor buyer numbers fell to 390, down 31% from 564 in the preceding nine weeks. But Conisbee noted the broader market slowed at the same time, with owner-occupier numbers down 24.5% and total buyers down 26%, making the investor share of the market a more telling measure than raw buyer counts.
That share fell from 24.3% immediately before the reforms to 20.7% in the four weeks to 27 June — the lowest four-week reading recorded in 2026. It has since recovered to 23.2% in the four weeks to 18 July, still below both the pre-budget level and the 29% recorded over the same period last year, but moving in the right direction.
Conisbee was careful to frame the recovery as tentative rather than confirmed.
"More recent data, however, suggests that initial response may be fading," she said. "The recovery should not be overstated." Some of the uptick reflects continued weakness among owner-occupiers rather than a genuine resurgence in investor demand, with the latest four-week investor buyer count of 166 still below the 181 recorded in the first four weeks after the budget.
On the selling side, there's no sign of a post-budget investor exodus — investor vendor numbers fell in step with buyer numbers, and the ratio of investor buyers to investor vendors has held broadly steady, at 71 per 100 before the changes and 72 since.
For brokers with investor clients, the data suggests the initial dampening effect may be easing, but Conisbee stressed the longer-term picture remains unresolved: "We do not yet know whether investor participation will continue to rise as auction volumes recover, or whether the post-budget decline will re-emerge."
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