Where the 2026 budget will hit hardest
Some suburbs will see prices fall hardest as investors sell ahead of the new capital gains tax. We have identified the list.
Luke Metcalfe · Microburbs Research · 15 May 2026The 2026 budget changes the rules, but not everywhere the same
From 1 July 2027, the capital gains tax discount for investment properties drops from 50% to an inflation-only adjustment, plus a minimum 30% tax. New builds are carved out — investors who buy a new home will keep the old discount. But the gain on every existing investment property bought before Budget night will be taxed harder from July 2027.
What this means in plain English: An investor holding an existing rental property has a deadline. Sell before 30 June 2027 and pay tax on the gain under the old 50% discount. Hold past that, and the same gain is taxed at twice the rate. In suburbs where prices depended on investor demand, a lot of investors will reach the same conclusion at the same time — sell now.
That bunching is the story. It will not happen uniformly. We have built a national vulnerability ranking using Microburbs' unique data on investor ownership, mortgage stress, where Microburbs' forecasting model already rated suburbs as overpriced before the budget, and where new home construction is happening right now. The pattern is striking.
What we found
The 2026 capital gains tax change creates concentrated selling pressure in a specific kind of suburb: heavily owned by investors, with mortgage stress already biting, sitting in the path of fresh new-build supply, and offering low rental yield. Where those four conditions coincide, the price drop will run further than the national average.
Concrete examples
Below are the suburbs at the very top of each list, drawn from the 2,118 suburbs nationally where Microburbs has enough data to score all four signals. The full top-15 in each story sits in the deeper analysis.
Price-drop suburbs — top of the leaderboard
Wallan, Melbourne (VIC) — median $419,000
What our data says: 58% of homes in Wallan look like investor-owned rental stock. Roughly 42% of households here show signs of mortgage stress. There were 266 new-dwelling Development Applications lodged here in 2024-25 alone — fresh competing supply about to arrive just as existing owners face the CGT deadline. Wallan represents the Melbourne outer-west growth corridor, which has eleven entries in the wider top tier of the 2,118-suburb leaderboard.
What it means for buyers: If you have been priced out of inner Melbourne, Wallan is the kind of place where a 5-10% price softening could put it within reach for first home buyers. It's already in the federal Home Guarantee Scheme price band.
What it means for existing owners: If you bought as an investor and your thesis was “ride the capital growth”, that thesis is now under direct policy pressure. Talk to your accountant about the 30 June 2027 deadline before the rush.
Liverpool, Sydney (NSW) — median $587,000
What our data says: 44% of properties here carry the investor-ownership signature. 43% of households are under mortgage pressure. And here's the kicker: before the budget was even announced, Microburbs' forecasting model already rated Liverpool 10% overpriced compared with other suburbs and the broader market. The model didn't know the budget was coming — it was reading the underlying fundamentals.
What it means for buyers: When the budget catalyst hits a suburb the forecasting model already thought was overpriced, the price adjustment runs further than in fairly-priced suburbs. South-West Sydney has been investor-driven for years; Liverpool sits right in the middle of it.
Whole-country leaderboards
The national list answers a single question: where will prices fall hardest? Ranked using investor concentration, mortgage stress, pre-budget overpricing, the new-build pipeline, and gross rental yield.
Top 10 nationally: where prices will fall hardest
Score combines investor concentration, mortgage stress, pre-budget overpricing, new-build supply pressure, and low gross rental yield. Higher score means harder fall.
| # | Suburb | Median | Investors% | Mortgage Stress% | Overpriced% | Yield% | Price-drop score |
|---|---|---|---|---|---|---|---|
| 1 | Bonnie Brook (VIC) | $556k | 57% | 41% | +5.7% | 4.2% | 2526 |
| 2 | Daylesford (VIC) | $555k | 61% | 21% | +1.8% | 3.3% | 2313 |
| 3 | Box Hill (NSW) | $837k | 65% | 47% | -0.5% | 3.6% | 2117 |
| 4 | Trentham (VIC) | $572k | 57% | 17% | -6.2% | 4.0% | 1993 |
| 5 | Deanside (VIC) | $521k | 67% | 43% | +6.6% | 4.7% | 1990 |
| 6 | The Entrance North (NSW) | $768k | 69% | 44% | +2.8% | 3.6% | 1922 |
| 7 | Metung (VIC) | $439k | 75% | 22% | +1.2% | 4.4% | 1894 |
| 8 | Kalkallo (VIC) | $446k | 57% | 58% | -0.5% | 4.3% | 1855 |
| 9 | Park Ridge (QLD) | $540k | 69% | 65% | -1.9% | 4.6% | 1780 |
| 10 | Spotswood (VIC) | $715k | 63% | 20% | +2.3% | 3.8% | 1776 |
By region (Greater Capital City Statistical Area)
Same methodology, broken down by GCCSA. Top 5 price-drop suburbs per region. Average gross yield across all scored suburbs in the region is shown alongside as context.
Sydney
430 suburbs scored in this region. Average gross yield across the region: 4.1%.
Top 5 price-drop:
| # | Suburb | Median | Investors% | Mortgage Stress% | Overpriced% | Yield% | Price-drop score |
|---|---|---|---|---|---|---|---|
| 1 | Box Hill (NSW) | $837k | 65% | 47% | -0.5% | 3.6% | 2117 |
| 2 | The Entrance North (NSW) | $768k | 69% | 44% | +2.8% | 3.6% | 1922 |
| 3 | Catherine Field (NSW) | $746k | 51% | 41% | +4.6% | 3.9% | 1761 |
| 4 | South Wentworthville (NSW) | $736k | 70% | 41% | +1.8% | 3.9% | 1739 |
| 5 | Leppington (NSW) | $692k | 52% | 44% | -1.4% | 3.9% | 1736 |
Melbourne
319 suburbs scored in this region. Average gross yield across the region: 4.2%.
Top 5 price-drop:
| # | Suburb | Median | Investors% | Mortgage Stress% | Overpriced% | Yield% | Price-drop score |
|---|---|---|---|---|---|---|---|
| 1 | Bonnie Brook (VIC) | $556k | 57% | 41% | +5.7% | 4.2% | 2526 |
| 2 | Deanside (VIC) | $521k | 67% | 43% | +6.6% | 4.7% | 1990 |
| 3 | Kalkallo (VIC) | $446k | 57% | 58% | -0.5% | 4.3% | 1855 |
| 4 | Spotswood (VIC) | $715k | 63% | 20% | +2.3% | 3.8% | 1776 |
| 5 | Strathtulloh (VIC) | $423k | 52% | 62% | +0.9% | 4.3% | 1764 |
Brisbane
243 suburbs scored in this region. Average gross yield across the region: 4.5%.
Top 5 price-drop:
| # | Suburb | Median | Investors% | Mortgage Stress% | Overpriced% | Yield% | Price-drop score |
|---|---|---|---|---|---|---|---|
| 1 | Park Ridge (QLD) | $540k | 69% | 65% | -1.9% | 4.6% | 1780 |
| 2 | Pallara (QLD) | $635k | 68% | 48% | -0.7% | 4.2% | 1534 |
| 3 | South Ripley (QLD) | $517k | 67% | 70% | -3.3% | 4.8% | 1428 |
| 4 | Burpengary East (QLD) | $611k | 51% | 75% | +0.9% | 4.7% | 1346 |
| 5 | Holmview (QLD) | $493k | 51% | 93% | -7.6% | 4.7% | 1337 |
Adelaide
161 suburbs scored in this region. Average gross yield across the region: 4.6%.
Top 5 price-drop:
| # | Suburb | Median | Investors% | Mortgage Stress% | Overpriced% | Yield% | Price-drop score |
|---|---|---|---|---|---|---|---|
| 1 | Salisbury Downs (SA) | $342k | 52% | 58% | -1.9% | 4.6% | 1093 |
| 2 | Munno Para (SA) | $350k | 48% | 61% | -3.5% | 4.8% | 1072 |
| 3 | Munno Para West (SA) | $412k | 54% | 62% | -1.9% | 4.9% | 1061 |
| 4 | Seaton (SA) | $538k | 44% | 28% | -1.9% | 4.0% | 986 |
| 5 | Plympton Park (SA) | $578k | 53% | 20% | -7.1% | 3.9% | 986 |
Perth
212 suburbs scored in this region. Average gross yield across the region: 5.6%.
Top 5 price-drop:
| # | Suburb | Median | Investors% | Mortgage Stress% | Overpriced% | Yield% | Price-drop score |
|---|---|---|---|---|---|---|---|
| 1 | City Beach (WA) | $1.7M | 57% | 4% | +0.5% | 2.5% | 1230 |
| 2 | Treeby (WA) | $576k | 62% | 38% | -0.7% | 4.6% | 1130 |
| 3 | Ardross (WA) | $968k | 61% | 5% | +4.1% | 4.0% | 1116 |
| 4 | Madora Bay (WA) | $469k | 56% | 35% | +0.0% | 5.1% | 962 |
| 5 | Wannanup (WA) | $554k | 65% | 34% | -3.8% | 5.5% | 954 |
Regional NSW
228 suburbs scored in this region. Average gross yield across the region: 4.8%.
Top 5 price-drop:
| # | Suburb | Median | Investors% | Mortgage Stress% | Overpriced% | Yield% | Price-drop score |
|---|---|---|---|---|---|---|---|
| 1 | Forster (NSW) | $563k | 58% | 37% | -2.8% | 4.7% | 1684 |
| 2 | Lake Illawarra (NSW) | $546k | 72% | 52% | +0.0% | 4.5% | 1551 |
| 3 | Sapphire Beach (NSW) | $740k | 81% | 42% | -8.1% | 4.0% | 1440 |
| 4 | Culburra Beach (NSW) | $631k | 73% | 41% | -7.6% | 3.6% | 1438 |
| 5 | Old Bar (NSW) | $478k | 71% | 44% | -3.3% | 4.6% | 1366 |
Regional Victoria
123 suburbs scored in this region. Average gross yield across the region: 4.6%.
Top 5 price-drop:
| # | Suburb | Median | Investors% | Mortgage Stress% | Overpriced% | Yield% | Price-drop score |
|---|---|---|---|---|---|---|---|
| 1 | Daylesford (VIC) | $555k | 61% | 21% | +1.8% | 3.3% | 2313 |
| 2 | Trentham (VIC) | $572k | 57% | 17% | -6.2% | 4.0% | 1993 |
| 3 | Metung (VIC) | $439k | 75% | 22% | +1.2% | 4.4% | 1894 |
| 4 | Beechworth (VIC) | $441k | 63% | 20% | -2.8% | 3.7% | 1665 |
| 5 | Barwon Heads (VIC) | $840k | 71% | 16% | -4.2% | 2.3% | 1601 |
Regional Queensland
259 suburbs scored in this region. Average gross yield across the region: 5.6%.
Top 5 price-drop:
| # | Suburb | Median | Investors% | Mortgage Stress% | Overpriced% | Yield% | Price-drop score |
|---|---|---|---|---|---|---|---|
| 1 | Kirkwood (QLD) | $455k | 75% | 63% | +0.9% | 5.3% | 1577 |
| 2 | Bilinga (QLD) | $1.0M | 87% | 21% | +1.8% | 4.4% | 1563 |
| 3 | Kings Beach (QLD) | $690k | 65% | 39% | +6.4% | 4.6% | 1438 |
| 4 | Paradise Point (QLD) | $1.4M | 78% | 40% | -9.1% | 4.0% | 1382 |
| 5 | Agnes Water (QLD) | $507k | 63% | 26% | -4.7% | 5.0% | 1318 |
How this helps you
If you are an investor with an existing rental: The CGT deadline is real and dated. Whether you should sell depends on which list your suburb is on. In selling-frenzy suburbs (Wallan-type), the rational move is to crystallise the gain early. In rent-shock suburbs (Point Cook-type), holding may be the better call because the rent income will rise to partly offset the harder-taxed gain. The two lists look identical at first glance but lead to opposite decisions.
If you are a buyer or first home buyer: Selling-frenzy suburbs are where you'll get the cleanest entry points over the next 18 months. The Federal Home Guarantee Scheme caps still apply by state — many of the most-exposed suburbs are in your eligibility band. Check Microburbs suburb reports to confirm the investor-ownership and supply numbers before you commit.
If you are a buyer's agent or mortgage broker: Your client conversations next year will turn on this distinction. Knowing which list a suburb is on changes your recommendation. Microburbs suburb reports show all four signals — investor share, mortgage stress, pre-budget overvaluation, new building — in one place.
About the research
Microburbs is an Australian property data company. We score every property in Australia on dozens of signals every quarter. For this analysis we combined four of our datasets: investor ownership (modelled property-by-property for over 487,000 homes, cross-checked against the 2021 Census), mortgage stress (modelled at mesh-block level using public data on arrears and household finances), pre-budget overvaluation (from our suburb-level price forecasting model, built before the budget was announced — so the signal is independent of the policy), and new building (counted from actual address creations and Development Applications over the past two years).
The analysis covers 2,118 suburbs where we have enough data on all four signals — about 37% of Australian suburbs with usable transaction and demographic baselines. The deeper analysis page shows the full top 15 in each story, plus the data caveats and the counter-arguments we considered.
Want to know which list your suburb is on?
Microburbs suburb reports show all four signals for over 15,000 Australian suburbs — investor ownership, mortgage stress, pre-budget overvaluation, and the new-building pipeline. Find your suburb and read its full data card.
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