There has been a noticeable change in the property conversations I have been having recently.
Investor enquiries have become quieter, which is understandable given the amount of change investors are currently trying to digest.
The Federal Government has changed the future treatment of negative gearing for established residential property, with properties acquired after 12 May 2026 affected when the new rules commence from the 2027–28 financial year. It has also announced significant changes to the capital gains tax treatment applying from July 2027. Existing investment properties receive transitional or grandfathered treatment under the reforms. Treasury Ministers
Whatever your view of those changes, I think they have introduced another consideration for investors who were already dealing with higher property prices, larger loans and tighter borrowing capacity.
What I am seeing on the owner-occupied side is quite different.
There are still plenty of established homeowners looking at their next move, particularly people who have owned their home for a number of years, have built reasonable equity and are considering upgrading.
For those buyers, a softer market can create an opportunity that is easy to miss if you only focus on what your current home is worth.
If You Are Upsizing, You Are Both a Seller and a Buyer
When the property market comes back, the first reaction for a homeowner can be disappointment that their property may not sell for what it could have twelve months earlier.
I understand that, but for an upsizer I do not think the sale price should be looked at in isolation.
You are selling into the market, but you are also buying into the same market.
What matters is the gap between the two transactions.
Take a simple example.
Say your existing property was worth $1 million, and the home you wanted to upgrade to was worth $2 million.
The difference between the two properties was $1 million.
Now assume, purely for illustration, that both parts of the market are 10% lower.
Your $1 million property becomes $900,000, so you are selling for $100,000 less.
But the $2 million property becomes $1.8 million, which is $200,000 less.
The changeover gap has reduced from $1 million to $900,000.
You have received $100,000 less for your home, but in this simplified example you are paying $200,000 less for the home you actually want to buy.
That is why I think upsizers need to be careful about becoming too focused on getting the absolute highest possible price for the property they are selling.
The more important question can be: what is it costing me to make the move?
The example is deliberately simplified and does not include stamp duty, selling costs or other transaction costs, but it shows why movements in the higher-priced property can matter more in dollar terms.
Twelve Months Ago, Getting the Property Was Often the Bigger Problem
There is another side to this that I think is just as important.
In a very strong market, particularly when good family homes are attracting a lot of competition, there may not be much of a discount available at all.
You might find the property you want, but so have several other buyers.
At auction there can be a genuine frenzy, and even private treaty properties can move quickly. Buyers can find themselves increasing their offer simply because they do not know when another suitable property will become available.
That makes upgrading difficult even if your own home is performing strongly.
In a quieter market, you may have more time to consider the property, potentially less competition and in some cases a vendor who is more prepared to negotiate.
I think that is what some upsizers are starting to recognise.
They may not achieve the peak price they once imagined for their current home, but the opportunity on the property they are buying can be more important.
The Opportunity Is Often Higher Up the Market
This is particularly relevant where someone is making a meaningful jump in property value.
If you are selling a $1 million property and buying another property worth roughly $1 million, a softer market does not necessarily create much of an advantage.
But if you are moving from a $1 million property into something around $1.8 million, $2 million or above, movements in the higher-priced property can have a much bigger dollar impact.
That does not mean every market segment falls evenly. They don’t.
Different suburbs, property types and price brackets can perform very differently.
But it is one of the first things I would look at with an upgrader: not simply what has happened to the property they own, but what has happened to the type of property they want to buy.
This Is Where the Lending Conversation Changes
For most upsizers I speak with, the deposit is not necessarily the biggest issue.
They may already have substantial equity in their current home.
The questions are more likely to be around how much they can borrow, what happens if they buy before they sell and whether they can comfortably carry the debt during the changeover period.
Some will be able to sell first and then buy.
Others may want to buy before selling so they are not forced to find the next home within a particular timeframe.
That can lead to discussions around bridging finance, accessing equity for a deposit and purchase costs, or whether their income is strong enough for a lender to support both properties temporarily.
This is where I think the planning needs to happen before someone becomes emotionally committed to a property.
There is a big difference between knowing you have $800,000 of equity and knowing exactly how a $2 million purchase could be structured.
A Softer Market Does Not Automatically Mean You Should Buy
I am not suggesting that people should upgrade simply because the market has softened.
There are still plenty of things to consider.
Borrowing costs matter. Your household cash flow matters. The size of the new mortgage matters. So does how much cash you will have left after the transaction.
For some people, waiting will still make sense.
But I also do not think an established homeowner should automatically sit on the sidelines because their current property is worth less than it was at the peak of the market.
If you are buying and selling in the same market, the more useful exercise is to work out what the changeover actually looks like today.
In some cases, that number may be better than it was when the market felt much stronger.
Investors and Upsizers Are Looking at the Same Market Differently
This is probably the biggest change I am noticing at the moment.
For an investor looking at an established property, recent government policy changes have added another layer to the decision, particularly around the future tax treatment of the investment. The Government has explicitly designed the negative gearing changes to direct more investment toward new housing supply rather than established homes. Prime Minister of Australia
For an owner-occupier looking to upgrade, those tax changes are not driving the decision in the same way.
They are looking at whether they can sell their current property, secure the home they actually want and make the changeover stack up financially.
That is why I am finding the two parts of the market feel quite different at the moment.
Investor conversations are more cautious.
Upsizer conversations are often more about whether the current conditions have created an opportunity.
Thinking About Upgrading?
If you are considering selling your current home and buying something more expensive, I would not start by asking what your property was worth twelve months ago.
I would start with what it is realistically worth today, what the type of property you want to buy is selling for today, and what the difference between those two numbers actually looks like.
From there, we can work through the equity, borrowing capacity, expected sale proceeds and whether selling first or buying first makes more sense.
If you are looking at upgrading and want to understand what the changeover might look like before you start making offers, get in touch and we can work through the numbers.
