Expert’s urgent warning to Aussies desperate to buy a home: ‘There’s going to be fighting’

First home buyers have been given a golden chance to get into the property market off the back of the government’s tax reforms, but one expert says thousands risk missing out if they don’t take action now.

Treasurer Jim Chalmers promised changes to the capital gains and negative gearing would “level the playing field” and help 75,000 Australians buy homes.

House prices have already dropped, and some first home buyers are holding off purchasing in the hopes prices fall further before the changes officially come into effect on July 1, 2027.

Property investment expert Zoran Solano from Hot Property Buyers Agency warned it may be the wrong move.

“First home buyers have been asking for help getting in the market,” he told nine.com.au.

“They have it, they just need to grab it by the horns and actually use it now. They actually need to get out there and put some offers in on property.”

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He said first home buyers need to understand that the market weakened when the reforms were announced because many investors had a “knee jerk” reaction and pulled back, but they won’t stay away for long.

Which is why he urged first home buyers to organise their finances and get into the market before investors return to the market and competition heats up again.

Especially if they’re looking at new build properties, which are exempt from some of the new negative gearing and CGT rules.

It makes them attractive to first home buyers and investors both.

“We have this perfect storm where both investors and first home buyers are going to be fighting over new builds, potentially inflating the price,” Solano said.

Cotality head of research Gerard Burg suspects there will only be a small jump in investor demand for new builds because they have long been “viewed as a less attractive option” compared to established properties.

But even a small jump in demand could have a significant impact because there simply aren’t enough new builds to go around.

Australia’s construction industry is facing critical shortages that are making it almost impossible for supply to meet increased demand for new homes.

“We do not have enough new builds, and we also don’t have enough new builds in the locations where people actually want to live,” Solano said.

Homecorp chief executive Ron Bakir agreed that even though the market appears to have “paused”, this period of relief for first home buyers won’t last because Australia’s housing supply (new build or established) still can’t meet demand.

“We just don’t have enough labor to produce the number of homes required,” he told nine.com.au.

“We don’t have governments – local, state, and federal – working fast enough together to actually streamline some of the processes to bring projects on faster to line.”

It’s bad news for affordability, as low supply and increased demand will likely drive competition and prices back up over the next 12 months.

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Burg said affordability remains one of the biggest issues for first home buyers, especially as interest rates are predicted to rise again in 2027.

“It’s not just about the value [of a home], it’s also about the interest rate and the borrowing capacity that borrowers have,” he said.

Burg predicts the Reserve Bank of Australia (RBA) won’t consider cutting interest rates until the back half of 2027.

That’s why Bakir is urging aspiring first home buyers to get into the market now, before the pressure and competition ramps up again.

“Just get in. Because the faster you get in, the better it will be for you.”

This content brought to you by Homecorp.