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According to a new report from PropTrack, median rents nationally hit a record high in June, up 3.1 per cent over the quarter and 6.4 per cent over the year to reach $670 a week.
According to a Treasury report on the budget that was released at the announcement of the budget on 12 May, reforms were predicted to have a “small impact on rents, with an expected increase of less than $2 per week for a household paying the current median rent”.
PropTrack’s findings equate to a jump of $10 a week relative to the March quarter.
The federal budget introduced sweeping changes to negative gearing and capital gains tax (CGT) concessions for property investors – reforms the government said would improve housing affordability and address “intergenerational inequality”.
The government has said the reforms will reduce speculative investor demand, improve affordability for first home buyers, and be offset by increased housing construction over time.
However, prior to the budget, some figures in the housing industry warned that changes to negative gearing could raise rents, as landlords sought to cover the expenses left behind from the removal of negative gearing.
Responding to PropTrack’s data, the Finance Brokers Association of Australia urged the government to “swallow its pride and change course before it’s too late”.
“We warned that discouraging investors would increase costs for Australians who rent, and we are now seeing this happen exactly as predicted,” Leo Gagic, CEO for the FBAA, said.
“The changes that are decreasing the supply of rental availability while demand is increasing are hurting the very people they were supposed to help, including Australians on lower incomes, single parents, and aspiring first home buyers.
“How does making it harder for Australians to save a deposit improve housing affordability?”
Rents move upwards
The June quarter was the first to capture the initial effects of the government’s housing tax reforms.
The report also found rental price growth had regained momentum after a period of stability through much of 2025, with increases recorded across every capital city during the June quarter.
Melbourne and Perth led quarterly growth, with advertised rents rising 3.5 per cent in both cities, while Perth (10.3 per cent), Hobart (9.1 per cent), and Darwin (7.7 per cent) recorded the strongest annual increases. Regional rents were flat over the quarter, but remained 5.3 per cent higher than a year earlier.
Commenting on the findings, PropTrack senior economist Anne Flaherty said: “The May federal budget, which announced sweeping changes to investor tax settings, occurred in the middle of the quarter, so the full impact on the rental market is yet to be seen.
“While the vacancy rate has edged higher, the expected decrease in investor demand due to the budget’s tax changes could slow the pace of new supply, putting further pressure on rents.”
Housing market takes a hit
The FBAA’s criticism comes as Australia’s housing market has also begun to lose momentum following the budget, with recent data pointing to weakening buyer demand and falling home values.
Cotality’s latest Home Value Index showed national dwelling values fell 0.7 per cent in July – the largest monthly decline since December 2022 – while Brisbane and Adelaide joined Sydney and Melbourne in recording monthly price falls. Separate data from REA Group’s PropTrack also showed national home prices declined for a fourth consecutive month in July.
Flaherty acknowledged that the budget was playing a part in the weekend market, but noted that there were other forces at play.
“High interest rates are weighing on prices, with the impact of reduced borrowing capacities being exacerbated by ongoing cost-of-living pressures,” Flaherty said.
“Budget tax changes are also likely impacting overall buyer confidence, while ongoing price falls could be driving some buyers to delay purchasing until prices stabilise.”
The overall slowdown is being felt by brokers and lenders alike. National Australia Bank has reported that total home lending applications fell 15 per cent in the June quarter.
At the same time, broker group Loan Market has also seen mortgage applications fall 26 per cent by volume and 23 per cent by value between early February 2026 and the end of June.
According to brokers speaking to Broker Daily, buyers are now becoming more measured and disciplined in their purchasing decisions, opting to buy more comfortably within their borrowing capacity. Vendors are also either stepping back or opting for private treaty sales rather than risking an auction campaign in a weaker market.
FBAA urges government to change course
Prior to the budget, Raine & Horne executive chairman Angus Raine warned that reducing tax concessions for investors could cut rental supply, worsen shortages, and lift rents.
Gagic said that those warnings are now coming to fruition.
“Every additional dollar spent on rent is a dollar that cannot go towards buying a home,” Gagic said.
“In April, we challenged the government to be prepared to correct course if the CGT and negative gearing changes backfired.
“Now, we’re asking the Prime Minister and the Treasurer to do it.”
[Related: Westpac forecasts slump in investor activity following budget]
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