Key takeaway: The budget’s property changes are having effects the government didn’t model, says Veronica Morgan, co-founder of Home Buyer Academy and founder of the Buyers Agent Mentoring Program. Sydney’s auction withdrawal rate has recently averaged just under 20%, double a normal year, and first home buyers who planned to rent out their home later can no longer negatively gear.
In this episode of Geared for Growth, Mike Mortlock is joined by Veronica Morgan, property expert, co-founder of Home Buyer Academy, Preferential, and founder of the Buyers Agent Mentoring Program, who has been at the forefront of buyer advocacy and industry reform in Australia.
With deep insight into the Sydney market and a national perspective, Veronica unpacks what’s really happening beneath the surface of Australia’s property market following the latest federal budget. While headlines suggest stability, the reality on the ground tells a very different story, one driven by falling confidence, policy uncertainty, and shifting buyer behaviour.
From declining auction clearance rates to rising withdrawal rates, this conversation explores how sentiment, not just fundamentals, is shaping the current market. Veronica also challenges the unintended consequences of recent policy changes, particularly for first home buyers and aspiring investors, and raises concerns about the growing disconnect between government modeling and real-world outcomes.
Veronica says Sydney clearance rates usually exceed 70% in February, and they did again this year. After the first interest rate rise they fell into the 60s, a balanced market, and after the March rise dropped below 60%, sitting in the 50s since, a buyers’ market. The budget then dented confidence across the whole market, and she expects discretionary sellers to stop listing, making property harder to find.
Veronica says brand new property, especially off-the-plan apartments, loses money on resale far more often than established property, so buying one on a 5% deposit is extraordinarily dangerous. After the budget, first home buyers will compete with investors piling into new stock, while the resale market shrinks because later investors won’t get negative gearing. By contrast, she says first home buyers in the established market are in a competition-free zone.
Veronica says upgraders buying and selling in the same market are in the box seat when prices fall, because the gap between the cheaper home they sell and the dearer one they buy shrinks. The challenges are finding the right property, since discretionary vendors hold back, and accepting less for your own home than a year earlier. Slower markets also allow longer settlements, more flexible offer terms and more off-market opportunities.
Veronica says that unless the changes make no material difference to you, investors should wait and see what is legislated rather than knee-jerk into new strategies. She is disappointed by advisers pivoting and pitching strategies before the rules are known. Talk to your accountant and mortgage broker about borrowing capacity, and remember that without negative gearing you still get the deductions, just later. She expects the herd to rush into brand new.
This is general information from the podcast, not financial advice.
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