9:30PMAugust 18, 2026.
Updated 17 hours ago
Australia’s largest rental property manager has affirmed that Jim Chalmers’ budget could lead to a 30 per cent spike in costs for tenants, as Anthony Albanese and the Treasurer launched a public assault on analysis showing their budget housing predictions were in jeopardy.
Real estate agency Ray White, which manages more than 250,000 rental properties, on Wednesday released analysis showing new investors stripped of property tax concessions in the May budget would have to raise rents by about 30 per cent to cover their losses if dwelling prices remained steady.
The analysis echoes a warning from National Australia Bank on Monday that landlords would need a higher yield to cover the loss of tax concessions such as the 50 per cent capital gains tax discount and negative gearing on new purchases of existing property.
Growing evidence of a rental spike follows months of the Albanese government staring down criticism of unexpected consequences from its May budget including freefalling property prices, still unfinished carve-outs for start-ups, and the removal of a “widows tax” and a “death tax” from their trusts shake-up.
In the Treasurer’s working-class Brisbane electorate, rents are moving fast in one direction: up. Since the budget, weekly costs have climbed at three times Treasury’s forecast rate of just $2 per week. A search of rental advertisements shows some price increases are already hitting double digits. A quirk in state laws that ties once-annual rental increases to the property rather than the lease agreement allows Queenslanders in some instances to see the exact date of their next increase and how much it will rise.
Reserve Bank documents released on Tuesday analysing Labor’s tax changes said the capital gains crackdown could also hurt investment in start-ups and other high growth firms. The RBA said the budget would result in a modest increase in the cost of capital for non-financial companies equivalent to one interest rate rise, but could be higher for start-ups.
One of the nation’s largest residential property investors Aspen Group flagged that the controversial tax changes would push rents higher and hit the “affordable end of the of the market” hardest.
The Treasurer lashed out at NAB on Tuesday morning, claiming it had failed to consider a “whole range of factors” before Anthony Albanese seized on a clarification issued by NAB regarding its note to clients. The supposed clarification asserted that rents had to rise or dwelling prices had to fall – or some combination of both – to recalibrate investor rental yields in the aftermath of the May budget.
Treasury expects neither, with forecasts outlined in the budget showing “negligible” increases to rents of $2 a week while house prices are projected to continue to grow just 2 per cent slower than a scenario in which the tax changes were not made.
When asked whether the government had contacted the bank following the release of its note to clients, a NAB spokesman said: “We’ve had various inquiries which suggested further clarification was needed.”
Labor also faces pressure from a new union push that would double standard rental leases to two years and lift public housing construction to a 40-year-high of one in every 10 new homes.
Claiming success in securing limits on tax breaks for “professional landlords” through the capital gains tax and negative gearing changes, the ACTU will press national cabinet to strengthen the rights of millions of renters through a new national two-year rental standard and a fivefold increase in public housing construction to its highest rate since the 1980s.
In a strategy to be unveiled in Canberra on Wednesday, the ACTU will call for “urgent” changes that would require landlords to offer at least two years of housing security as the default standard, allowing renters to still choose shorter leases.
Noting the significant pullback in investor activity, Ray White’s chief economist Nerida Conisbee said that in addition to a recalculation of investor yields, the government’s stated ambition of shifting home ownership from landlords to owner-occupiers would naturally force rents up as investors retreat and rental supply shrinks.
“The solution is to build enough homes because then everybody wins, but the solution that the government had was to shift the pressure from first homebuyers on to renters,’’ she said. “That’s fundamentally where we see the problem with the policy change.
“You pull back investor activity and homes shift from being rented to owned, obviously the number of rental properties will start to shrink.”
Ms Conisbee noted it was unlikely that rents would do all the work, suggesting a combination of slower growth in rental supply would push up rents while softer investor demand would put downward pressure on house prices.
“The question is what would make property financially attractive to investors again,” she said. “This can happen through higher rents, lower prices, or most likely, a combination of both, something which is already occurring.
“If rents rose 10 per cent, the price fall required to reach the minimum hurdle would drop to around 16 per cent. A 20 per cent increase in rents would reduce the required price fall to around 8 per cent, while a 30 per cent rise in rents would almost remove the need for prices to fall at all.”
Ray White had been working on this analysis of rental yields before the release of NAB’s note on Monday. While the removal of the 50 per cent CGT discount will change investor behaviour, Ray White’s analysis focuses on the removal of negative gearing.
Since the release of Australian Bureau of Statistics lending figures, which showed a slump in new loan commitments across owner-occupier, investor and first-home buyer categories, the government has been pointing to an uptick in investor loans for new dwellings and construction as a vindication of its tax changes.
Anthony Albanese said: “In the June quarter, there was a 27 per cent increase in investor loans for new builds and a 20 per cent increase for construction loans. That is more investors are borrowing for new builds and more new builds are being constructed by developers. That is happening. And that’s precisely what the aim of the policy was to do.”
Aspen Group, an ASX-listed residential property investor in its annual results release on Tuesday, warned that the government’s changes could only put upward pressure on rents and that Australians locked out of the market could not afford the rent for “new supply”.
“The federal government recently increased tax on existing rentals through negative gearing and CGT changes and banned SMSFs from funding new housing investment with debt,” the company’s investor presentation read.
“This increases the cost and constraints of supplying housing which can only lead to higher rents and prices, particularly at the more affordable end of the market which is already acutely undersupplied and trading well below the cost of new production.
“Most cannot afford the economic rent for new supply which is why the rental stock is predominantly older apartments.”
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