While Perth investors have been cautious about potential tax reform policies, a local buyer’s agent is pushing for better buyer education on supply-and-demand mechanisms that drive the market.

Perth property investors have been choosing to delay decisions amid speculation that the government could slash the 50 per cent capital gains tax (CGT) discount, according to a local-based buyer’s agent.

You&Me Personalised Property Services co-founder Heath Bassett said investor concerns had recently amplified over potential impacts of CGT and negative gearing changes on long-term returns.

According to Bassett, reports on possible tax reforms have led investors to take longer to make decisions or delay their purchases to see what would come out of the budget.

He said the shift was commonly seen among less experienced investors, who were most likely to be influenced by policy changes and were opting to put their plans on hold as a result.

“They’re concerned about how changes to CGT could affect their profit when they eventually sell, especially if it pushes them into a higher tax bracket,” he said.

“They’re hearing speculation about whether any changes to the CGT discount would be grandfathered, and also whether negative gearing might be restricted to just two investment properties.”

On the other hand, Bassett said more veteran investors were less affected by CGT speculation, having seen various policy changes over time.

“They tend to focus on the long-term fundamentals and continue investing regardless of short-term conditions,” he said.

Despite the recent hesitancy, Bassett said the Perth market was likely to remain largely unchanged, as rapid population growth and tight housing supply supported property prices.

Australian Bureau of Statistics (ABS) data showed the state’s population grew by 2.2 per cent in the FY2024–25, the fastest growth rate of any state.

In the same period, FY24–25, Western Australia completed just over 22,500 new dwellings.

“When you compare that to population growth, it highlights the imbalance. The number of new homes being built is well below the increase in people needing housing,” Bassett said.

He said that despite the perception that CGT changes would reduce competition and push prices down, supply constraints meant any reduction in activity was unlikely to materially affect the market.

“Even if a small percentage of investors leave the market, most will stay. Property still offers strong leverage and long-term growth potential compared to other asset classes,” he said.

Ultimately, Bassett said the key was understanding the fundamentals of the market and making decisions based on long-term outcomes, despite policy changes, interest rates and global events.

Ahead of the May budget, Bassett said he expected investors to remain cautious but noted the broader Perth property outlook was still positive.

“Once there’s clarity, the market will adjust. But the fundamentals driving demand in Perth aren’t going away anytime soon,” Bassett added.

This article was first published on Real Estate Business, a sister-brand of Property Buzz.