G'day.
A lot happened in the last three weeks. The RBA hiked, the Budget rewrote investor tax rules from July 2027, and auction clearance rates have rolled over. Here's what actually matters for your rental.
This week in Australian property
RBA hikes 25bp to 4.35%
On 5 May the Monetary Policy Board lifted the cash rate by 25 basis points to 4.35%, in an 8–1 vote. The Board pointed to Middle East-driven energy costs feeding into already-sticky services inflation. Westpac, CBA and NAB are all flagging the door is still open for another move later in the year.
What this means for you: on a $500k investment loan, a 0.25% rise is roughly $1,250/yr in extra interest. That's fully deductible, but it still needs to clear your bank account first. If you've been running a thin buffer, this is the prompt to revisit it.
Open the negative gearing calculator →
Cotality: home values up just 0.3% in April
April's Cotality (formerly CoreLogic) Home Value Index came in at +0.3% nationally — the slowest monthly pace since January 2025. Sydney and Melbourne both fell 0.6% over the month and are now five months into a soft correction. Perth, Adelaide and Brisbane have lost momentum but are still positive.
What this means for you: if you were planning to sell into a peak before EOFY, that window has narrowed. Self-managers in SYD/MEL should price recent re-lets to market rather than aspirationally — vacancy compounds fast when stock builds.
Auction clearance rates near 50% post-Budget
The combined-capitals clearance rate has dropped to around 50% in the weekends following the 12 May Budget — down sharply from the high-60s the market was running pre-announcement. ABC's housing desk attributes most of the slide to investor hesitation around the negative gearing and CGT changes (more on those below), with a smaller contribution from the rate hike.
What this means for you: the buyer pool for established investment-grade stock has thinned out. If you're a holder, this is mostly noise — your rent didn't change. If you're a buyer, this is the best negotiating position investors have had in 18 months.
Budget 2026-27: the dates that matter
The 12 May Budget confirmed the long-rumoured changes:
- Negative gearing on established dwellings will be limited to new builds for losses incurred on or after 1 July 2027.
- The 50% CGT discount is being replaced with an inflation-indexation regime + 30% minimum tax on the discounted portion, also from 1 July 2027.
- Existing investors are grandfathered for properties acquired before the start date — your current portfolio keeps the current rules.
We've published a full breakdown — Federal Budget 2026-27 — what it means for property investors — including the worked examples and what the grandfathering language actually says.
What this means for you: nothing changes for FY2025-26 or FY2026-27. The decision to make in the next 14 months is whether you acquire one more property before 1 July 2027 to lock in the existing treatment, and whether that decision still stacks up on the cashflow even at 4.35%+ rates.
Deadline corner
- 30 June — EOFY. Last chance for repair deductions, QS reports, pre-paid interest, depreciation top-ups for FY2025-26.
- 14 July — STP finalisation for any landlords running an entity with staff.
- 28 July — Q4 BAS due (only if you're trading through a structure).
- 31 October — individual return lodgement deadline if you self-lodge.
Product this week — PortfolioPulse rate-sensitivity card
We've shipped a small but useful change inside the Dashboard. The PortfolioPulse rail now includes a rate-sensitivity card that shows your projected annual interest cost at +0.25%, +0.50% and +1.00% over your current rate, per property and portfolio-wide. It uses your live loan balances so you can stop doing the maths on a napkin every RBA meeting.
Available on all plans, no setup required.
That's the week. Reply to this email (or email us at support@propally.com.au) with anything I got wrong, anything worth covering next week, or questions I can answer with an actual answer rather than a guess.
— Tob
