The federal government's sweeping changes to negative gearing and capital gains tax have reignited one of Australia's longest-running property debates. But beyond the headlines and political rhetoric sits a more pressing question: will these reforms actually deliver more housing?

In this conversation, Apartments.com.au founder Mike Bird sits down with property economist Cameron Kusher, Director of Kusher Consulting, to unpack what the federal budget means for investors, developers and the future of Australia's housing supply. Rather than focusing purely on politics, the discussion examines the practical realities of delivering new housing, and why the biggest barriers may have little to do with demand.

For anyone involved in off-the-plan property, the conversation offers an insightful look at where the market is heading.

Investment is changing, but supply remains the real challenge

While much of the public discussion has centred on investors losing tax advantages, Kusher argues the broader consequence may simply be less overall investment in housing.

Currently, investors account for roughly a third of Australia's lending market, yet only a small proportion purchase brand-new homes. Most continue to favour established properties, meaning the government's reforms are designed to encourage investment into new housing instead.

The problem, according to Kusher, is that incentives alone won't solve the underlying economics.

"It's not that there's a lack of demand for new housing," he explains. "It's a case that costs have gone up so much. It's not feasible."

Construction costs have already increased by around 35 to 40 per cent over the past five years, and recent data suggests costs are beginning to rise again. As a result, the price gap between new and existing homes, particularly apartments, remains significant, limiting investor appetite despite the changing tax landscape.

Why investors aren't buying the apartments we need

One of the more revealing discussions centres on apartment design itself.

The market consistently demands one and two-bedroom apartments, particularly from investors, yet developers continue delivering larger owner-occupier product.

According to Kusher, this isn't a design preference, it's a feasibility issue.

Today's construction costs, development contributions and financing expenses mean many smaller apartments simply don't stack up commercially. Developers build what projects can support financially, not necessarily what the market would ideally absorb.

It's a reminder that increasing housing supply isn't simply about creating more demand; it's about making the numbers work.

Build-to-rent vs build-to-sell: An uneven playing field

Bird also questions one of the more controversial aspects of current housing policy: the favourable tax treatment afforded to build-to-rent developments while build-to-sell projects receive no equivalent support.

If the objective is increasing rental supply, both agree the distinction appears difficult to justify.

Whether an apartment is owned by an institutional investor or an individual landlord, the end result can still be another home available for rent. Their view is that policy should focus less on ownership structure and more on encouraging new housing delivery across the board.

The discussion highlights what many in the industry have been saying for some time: consistency in policy often matters as much as incentives themselves.

Every state is facing a different housing story

While housing policy is national, Australia's property markets remain highly local.

Victoria, despite subdued sentiment and higher investor taxes in recent years, still offers one of the country's strongest long-term affordability stories. Kusher believes Melbourne's recovery is more likely a two to three-year story than an immediate rebound, but sees genuine opportunity for developers willing to think beyond today's market conditions.

Southeast Queensland presents almost the opposite challenge. Demand remains exceptionally strong, yet developers regularly struggle to secure builders and bring projects to market fast enough.

Sydney continues battling project feasibility, while Western Australia faces ongoing land supply constraints despite strong population growth.

Rather than a single national housing crisis, the discussion paints a picture of multiple markets, each constrained by different bottlenecks.

Infrastructure, not demand, is slowing delivery

A recurring theme throughout the conversation is the role of infrastructure and planning.

Governments have committed to ambitious housing targets, but delivering those homes requires far more than planning announcements.

Roads, utilities, schools and public transport all need to expand alongside housing growth, particularly as cities push towards greater density. Even established inner-city suburbs often require significant upgrades before they can support substantial new development.

Approval timeframes also continue to add cost.

Because most projects rely heavily on debt funding, every additional month spent waiting for approvals increases financing costs, further eroding project feasibility.

In Kusher's view, reducing approval delays and investing more heavily in enabling infrastructure would do more to unlock housing supply than many of the tax measures currently dominating public debate.

Could land tax replace stamp duty?

One of the broader policy discussions explores whether Australia's reliance on stamp duty is actually working against housing supply.

Kusher argues that replacing stamp duty with a broad-based land tax could fundamentally change government incentives.

Rather than relying on transaction volumes for revenue, governments would receive a more stable income stream from land ownership itself, potentially encouraging faster approvals and greater housing delivery over time.

While acknowledging such reform would be politically difficult, both agree the current system creates uncertainty for both governments and developers.

Where are the opportunities now?

Despite the challenging environment, Kusher remains optimistic about Australia's long-term housing outlook.

Western Sydney, particularly around the new airport precinct, stands out as one of the country's strongest long-term development stories.

Melbourne, meanwhile, continues to present opportunities for developers with patience.

With affordability improving and long-term population growth expected to remain strong, today's softer market may ultimately create opportunities for those looking several years ahead rather than several months.

Looking beyond the headlines

The post-budget debate has understandably focused on tax reform, but this conversation makes clear that Australia's housing challenges run much deeper.

Construction costs, planning delays, infrastructure investment and project feasibility all continue to shape what ultimately gets built, and whether the country's ambitious housing targets can realistically be achieved.

For buyers, investors and developers alike, understanding these structural issues is becoming just as important as following interest rates or government announcements.

Watch the full conversation with Cameron Kusher and Mike Bird for a detailed discussion on the post-budget property landscape, off-the-plan investment, and where Australia's housing market may be heading next.

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