Labor’s Housing Reforms: What It Really Means for Property Investors

Australia is facing a housing crunch — and despite well-meaning promises from the newly elected Labor government, many of their initiatives may risk intensifying the pressure. From first-home buyer incentives to migration targets and the ambition to build 1.2 million new homes, the next few years will shape the trajectory of the Australian property market.

But will these changes help solve the crisis — or deepen it?

We break down what investors need to know.

Rising Demand, Limited Supply

The Government’s flagship policies are designed to make home ownership more accessible, including low-deposit schemes and expanded equity initiatives. But while these efforts are commendable, they may unintentionally create stronger demand without addressing the fundamental issue: Australia isn’t building enough homes.

“Injecting more buyers into the market without increasing supply pushes prices higher, not lower,” says Brad Wearne, General Manager of Meridian Australia. “We've seen this before — short-term affordability benefits for individuals, but long-term systemic challenges.”

Migration and Market Pressures

High migration levels are projected to continue, with around 1.8 million new arrivals expected over the next five years. This will be a key driver of economic growth — but also an added layer of pressure on an already stretched housing system.

“Most migrants settle in urban centres like Sydney, Melbourne and Brisbane — the very markets where rental supply is lowest and affordability is most challenged,” Brad explains. “Without rapid planning reform and construction capability, we’re setting ourselves up for increased rental stress.”

Why Supply Fixes Are Falling Short

While the government has pledged to build 1.2 million new homes over five years, industry experts argue the target is optimistic, given labour shortages, planning delays, and ongoing construction insolvencies.

The Housing Australia Future Fund, for example, aims to build 30,000 affordable homes in five years — that’s just 6,000 homes per year, compared to a required national output of over 240,000 annually.

“There’s a growing gap between policy ambition and delivery capacity,” says Brad. “The reality on the ground — from delayed approvals to a lack of skilled trades — paints a very different picture.”

The Compliance Challenge for Landlords

Investors are also facing a more regulated environment, with state governments tightening rental legislation and enforcing minimum property standards. While this improves tenant welfare, it increases costs and compliance obligations for landlords — particularly those investing in older or regional stock.

Brad cautions, “Investors must go in with their eyes open. From heating requirements to structural standards, these upgrades can significantly impact ROI if not accounted for upfront.”

What Investors Should Watch For

While policy complexity is increasing, the fundamentals of property investment remain strong. The key lies in being selective and future-focused.

Here are some of the trends we’re watching:

• Inner and middle-ring suburbs in Sydney, Brisbane and Melbourne will continue to outperform due to demand and limited supply.

  
  

• Rental yields are expected to remain strong as high migration and tight vacancy rates persist.

  
  

• Investor incentives may become a political football — so careful attention to policy signals (especially around negative gearing and land tax) is crucial.

Our Take

At Meridian Australia, we believe that despite the noise, there is still opportunity — especially for investors who take a long-term, research-driven approach.

“While there’s no doubt the current environment is complex, quality assets in strategic locations are still delivering strong results,” Brad adds. “This isn’t the time to sit back — it’s the time to be informed, adaptable, and ready to act.”

Want help navigating what’s next?

Book a strategy session with a Property Investment Consultant from Meridian Australia today. Our team is here to help you invest with confidence — through any market cycle.

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