The 2026–27 Federal Budget has already been handed down, but for the property market the real story is still working its way through Parliament rather than sitting neatly inside it.
While the main Appropriation Bills are expected to pass through the House of Representatives by the end of June in line with normal budget timelines, the more contested elements of the government’s reform agenda are still being examined through a Senate committee process.
Those changes are now expected to move into a key voting window between 22 June and 2 July 2026, before Parliament rises for the winter break.
Until that point, nothing is fully locked in. And that gap between announcement and law, according to Lisa Pennell, CEO of Barry Plant, is exactly where the current market is sitting.
Lisa says the uncertainty itself has become a force in the market, shaping behaviour well before any final legislative outcome is known.
“There’s certainly a slowdown in buyer activity,” she said. “Not a market collapse by any stretch.”
What she is seeing instead is a more uneven response, with conditions shifting sharply depending on location, price point and buyer type. Some parts of the market are still transacting strongly, while others have slowed noticeably, particularly where investors previously made up a larger share of demand.
“It’s very segmented. Different areas acting very differently,” she said. “In some areas we’re still transacting very, very well.”
That fragmentation, Lisa says, is one of the clearest features of the current cycle. Rather than a uniform cooling or correction, the market is behaving in pockets, with some suburbs holding steady and others adjusting more quickly to thinner buyer depth.
A key driver, she believes, is not just the policy itself but the way it is being interpreted before it is finalised. Until the legislation is fully passed and its final form is known, sentiment is doing more of the heavy lifting than certainty.
“The reason why I didn’t make commentary initially is that I believe sentiment influences the market as much, if not more than policy,” she said.
That sentiment shift is most visible in the investor space. Lisa says investor activity has clearly stepped back while people wait to understand the final settings.
“No investors are going to be seeking a negatively geared property today,” she said, describing what she sees as a broad pause rather than a permanent exit.
That hesitation, she says, is already flowing through parts of the broader investment ecosystem. In particular, she pointed to a rapid withdrawal of some buyer’s agents whose businesses were heavily exposed to investor demand.
“They deal with investors, there’s so much uncertainty,” she said. “Those businesses overnight don’t exist. They have no customer base.”
While she acknowledged that this removes what she considers problematic behaviour in parts of the market, she also noted that it reflects how quickly sentiment can shift when a key buyer group steps back.
At the same time, Lisa says pricing is already adjusting in certain segments, particularly where properties have been sitting on the market longer or where buyer competition has thinned out.
“There’s certainly been price declines in some segments in some areas. I think that’s happened already,” she said.
In those cases, vendors who might have expected stronger outcomes earlier in the year are now having to recalibrate. Some properties are simply taking longer to move, while others are negotiating down from initial expectations as buyer numbers tighten.
Lisa says this is where the fundamentals of demand and supply begin to reassert themselves more clearly. When there are fewer buyers attending inspections or competing for the same asset, the end result inevitably changes.
“If there’s fewer buyers coming through opens, if there’s only one or two buyers instead of three or four, you’re going to get a different outcome,” she said.
Looking ahead, she expects vendor behaviour to become more conditional rather than uniform. Some owners will hold and rent where they can afford to, particularly if they are not under pressure to sell. Others will continue to transact, even if prices are softer than they might have been a few months earlier.
But she also warns that investor exits may outweigh any decisions to hold.
“If a vendor can afford to hold onto a property and rent it out, then potentially they may,” she said. “But we also have to account for the significant number of investors who will continue to exit the market.”
That exit trend, she says, has already been building over recent years in Victoria due to holding costs, land tax and compliance pressures, and the Budget debate is likely to reinforce that direction rather than reverse it.
Lisa also points out that any temporary reduction in listings caused by vendors holding stock is unlikely to offset broader supply pressures.
Even where some properties are withheld, she expects overall investor sell-down activity to continue to influence stock levels.
“We’re not getting new buyers in that investor space,” she said.
One likely consequence that has been widely discussed by the industry is continued pressure on rents over time, even if short-term expectations about sharp increases are overplayed.
From an agency perspective, Lisa believes the current environment is beginning to separate operators more clearly. While softer markets can be uncomfortable, she says they tend to expose differences in capability and structure.
“This is where quality agencies will actually be okay,” she said. “This is the time for quality businesses to really shine.”
With fewer transactions flowing through the system, she says performance becomes more visible. Listing management, negotiation and vendor guidance all become more important, while reliance on momentum alone becomes less effective.
“It’s no longer about fast talk and getting the listing and the property selling itself,” she said. “Now you actually need to know what you’re doing.”
She also sees the current cycle as part of a broader pattern rather than an exception. In her view, Australian property markets regularly swing between extremes of sentiment before returning to more balanced conditions.
“It always goes too far in one direction,” she said. “Then it comes back.”
For now, though, Lisa says the key variable is not just policy direction, but the period before policy becomes law, when uncertainty has its strongest influence.
Until the legislation is finalised and fully understood, she expects many participants to remain cautious, with lower transaction volumes and more measured decision making across both buyers and vendors.
In her view, the market is not standing still. It is simply waiting for clarity.
And until that arrives, sentiment will continue to do much of the work.