Over the past few weeks, I have spoken with a number of owners in Newstead and Teneriffe — intelligent, financially sophisticated investors — who are reconsidering their positions in light of the May 2026 Federal Budget. The concern is understandable. The noise has been significant.
But when you separate the noise from the data, the picture looks very different. This is my honest, unfiltered view — backed by the most current research from CBRE, ANZ, Domain, Knight Frank, Ray White and Cotality.
The Triple Whammy — and Why It Hasn’t Changed the Fundamentals
I want to acknowledge something directly before making the case for holding: the current market unease is real, and it is legitimate. Property owners right now are contending with a genuine triple whammy — three significant headwinds hitting simultaneously.
Interest rates have risen sharply and remained elevated longer than most forecasters predicted. For negatively geared investors, the holding cost pressure is real — particularly on assets purchased before the rate cycle began.
The Federal Budget landed in May with changes to negative gearing and CGT that, while not affecting existing owners, generated uncertainty and noise across the market — enough to cause many otherwise confident investors to pause.
Geopolitical instability — the ongoing conflict in Ukraine, tensions in the Middle East, and the broader impact on global energy and commodity markets — has created a backdrop of macro-economic anxiety that filters into investor sentiment everywhere, including here.
All three are real. None of them change the structural case for holding a quality inner-Brisbane apartment. Here is why.
First — What the Budget Actually Did (and Didn’t Do) to You
If you owned your property before 7:30pm on 12 May 2026, nothing has changed. You remain fully entitled to negative gear your investment and retain the 50% CGT discount. The legislation is explicit — existing owners are grandfathered entirely.
The changes only affect new purchases of established properties made after that date, and even then only from 1 July 2027. For owners of well-located, established inner-Brisbane apartments, the budget has arguably strengthened your position. It redirects future investor demand away from competing established stock. It makes your asset harder to replace. And because new builds remain fully exempt from the changes, the only way a rational investor can replicate your position is to buy new — which, as I’ll explain below, is becoming increasingly difficult and expensive to deliver.
The Supply Gap Is Not a Talking Point. It Is Arithmetic.
CBRE’s most recent apartment outlook forecasts that Brisbane needs approximately 16,000 new dwellings per year to meet population demand. It is currently delivering 4,600 apartments annually. That is a structural shortfall of nearly 12,000 homes every year — and CBRE forecasts this gap will push vacancy rates from their current 1.1% down to 0.7% by 2030.
JLL and The Urban Developer have separately confirmed that construction cost inflation and labour shortages — particularly in Queensland ahead of the 2032 Games — are continuing to constrain new supply. BDO’s March 2026 housing report describes new project feasibility as “challenging,” with elevated costs, tight contracting capacity and prolonged approval timeframes meaning projects take far longer to reach the market than the headline approvals numbers suggest.
Colliers has framed it most directly: Brisbane is facing a narrowing development window, worsening housing shortages and rising construction constraints that are creating a “fundamentally different investment environment.” The owners who benefit most from that environment are the ones already inside it.
The Numbers Are Not Speculative
Cotality’s June 2026 data shows Brisbane dwelling values rose 19.7% over the past 12 months — the median now sitting at approximately $1,116,180. ANZ Research forecasts 9.7% growth for Brisbane in 2026 alone — one of the strongest projections of any capital city. Brisbane has now delivered three consecutive years of double-digit growth: 12.1%, 13.3%, 9.7%.
Domain’s chief economist Dr Nicola Powell has confirmed that Brisbane’s median unit price grew 23% in the past year and is on track to overtake Sydney as Australia’s most expensive capital city unit market in the second half of 2026. “If you had said five years ago that Brisbane units would be on track to surpass Sydney, no one would have believed you,” Powell observed.
Knight Frank’s 2026 Wealth Report names Queensland as Australia’s luxury market powerhouse, with decade-long price growth surpassing every other capital city. The price ceiling for super-prime Brisbane apartments surged from $9.2 million to $14 million in just 12 months — now exceeding $48,000 per square metre. The global ultra-high-net-worth population is forecast to grow 46% by 2031. Increasingly, Brisbane is where that wealth is flowing.
Ray White’s 2026 Luxury Outlook Report reaches the same conclusion: Queensland has displaced Sydney and Melbourne as the dominant force in Australian prestige property growth.
The Olympics Cycle Has Barely Started
CBRE analysed residential price performance across every Olympic host city since 1996. The finding is consistent and unambiguous: average residential price growth in the four years after the Games was 42.5% — compared to 23.3% in the four years leading up to the event. The Games are not the peak. They are the beginning of the next phase.
Brisbane’s position today mirrors Sydney’s before the 2000 Games: record interstate migration, genuine housing shortage, $120 billion in committed infrastructure spending, and underlying economic fundamentals that no other Australian city currently matches. API Magazine reported this month that investors are already “racing the clock before the Olympic construction crunch intensifies” — with supply shortages, population growth and construction constraints outweighing the impact of higher interest rates.
The Olympic Stadium is within walking distance of Newstead. The infrastructure is already committed. The trades and labour that would otherwise build competing supply are being absorbed by the Olympic pipeline. That pipeline does not release them until after 2032.
Your Apartment Cannot Be Rebuilt at What It’s Worth Today — and the Gap Is Getting Wider
Construction costs in Brisbane have risen more than 40% since 2020. But the more important story is what is happening now — and why that gap between replacement cost and current market value is accelerating, not stabilising.
The global conflicts of the past three years have had a direct and material impact on the cost of building anything in Australia. Steel, aluminium, copper, timber, glass, concrete — the raw materials that go into every apartment — are all affected by elevated fuel prices, disrupted supply chains, and the redirection of global manufacturing capacity toward military and reconstruction demand. The conflict in Ukraine alone disrupted a significant portion of global steel and aluminium supply; the Middle East tensions have kept energy costs elevated, which flows through to virtually every construction input.
On top of that, Queensland’s construction labour market is being fundamentally reshaped by the 2032 Olympic pipeline. A shortage of approximately 43,000 construction workers is forecast in Queensland ahead of the Games — workers who are being absorbed into Olympic infrastructure projects and who will not be available to build new residential supply. When labour is scarce and materials are expensive, the economics of new apartment development become increasingly marginal.
The result: the cost to build a comparable apartment today — in a tightly held inner-city precinct, with established body corporate, premium amenity, river proximity, and the quality of finishes that characterise Cavcorp buildings — would materially exceed what most of these apartments are currently trading at. That replacement cost gap is not a theoretical concept. It is the reason feasibility on new Brisbane apartment projects continues to be described as “challenging” by BDO, Colliers and JLL, even as the need for supply has never been more acute.
When replacement cost exceeds market value, the market corrects. The gap closes. It always does. And in Brisbane’s case, with geopolitical pressures on materials costs, Olympic demand on labour, and a structural supply shortfall of nearly 12,000 apartments per year, the forces pushing that gap wider are not temporary. They are structural.
Brisbane apartment rents are forecast to grow 6.5% in 2026 — ahead of Sydney at 4.5% and Melbourne at 4%, according to JLL. CBRE forecasts median apartment rents will grow 24–27% between 2025 and 2030. The income side of these investments is strengthening, not weakening.
My View
The owners who will look back on 2026 with regret are not those who held. They are those who sold in a moment of noise and missed the decade that followed.
The budget has not changed existing owners’ positions. The supply has not improved. The Olympics is six years away — and the historical data shows the growth cycle around the Games accelerates after the closing ceremony, not before. Replacement cost is rising. Yields are rising. The precinct — Newstead, Teneriffe, the Newstead Peninsula — is becoming more irreplaceable, not less.
If there is a specific number you need to achieve from a sale to justify moving on, I will have that conversation honestly with you. But the data, from the most credible institutional sources available, does not support selling now.
The window to be well-positioned when this city reaches its inflection point is closing. You’re already on the right side of it.
Ari Shahbazifar is the director of sales at Cavalé, with 25 years of exclusive representation across Cavcorp’s portfolio in Newstead and Teneriffe. This article represents his personal analysis and is not financial advice. Sources: CBRE Apartment Outlook 2026, ANZ Research April 2026, Cotality June 2026, Domain (Dr Nicola Powell), Knight Frank Wealth Report 2026, Ray White Luxury Outlook 2026, The Urban Developer/JLL, API Magazine, Colliers, BDO Housing Report March 2026.
