When the Federal Treasurer, Jim Chalmers, announces the 2026–27 Federal Budget on 12 May, it will mark a period of significant importance. Over the past 12 months, industry professionals, buyers, builders, and investors have faced an unprecedented shortage in construction and housing supply. Each year, Sydney under-delivers by approximately 30,000 homes. This is a pivotal moment to determine whether the housing market will improve or continue to significantly under-deliver relative to demand.
Julian and Renee are ready to assist clients in understanding the implications of the new Budget.
The Budget and the Housing Supply Crisis
Building and construction costs continue to rise sharply. Over the next 12 months, construction prices are expected to have increased for 16 consecutive months. The Federal Budget may:
- Introduce subsidised tax offset programs for green building materials such as timber and steel
- Provide workforce support packages, including incentives of over $10,000 for apprenticeships
- Implement policies aimed at stabilising labour supply in the construction sector
New South Wales has set a target of delivering 1.2 million new homes.
Budget Infrastructure
The Budget is expected to help address Sydney’s infrastructure gap. Once enabling infrastructure is in place, development can proceed more efficiently. Recent budgets have tended to include:
- Funding for essential infrastructure such as sewerage, water, and power for cleared land
- Incentives for apartment construction along metro corridors to manage urban sprawl
Modern Methods of Construction (MMC)
Government policy continues to support modern construction methods.
The Budget is expected to maintain support for prefabricated and modular construction, which can reduce build times and project planning requirements by up to 50%. State-based regulatory and development costs can add up to $500,000 to a house and land package in Sydney. Meanwhile, the National Productivity Fund has allocated $120 million to reduce regulatory barriers (“red tape”).
The Tax Debate: Negative Gearing and CGT
Tax settings remain a key factor influencing housing supply:
- Industry stakeholders warn that removing negative gearing could lead to reduced investor participation, potentially resulting in up to 45,000 fewer new homes being built.
NSW Supply Snapshot: 2026 Challenge
| Goal | Current Status (NSW) | Budget Requirement |
| Annual New Homes | ~48,000 | 75,000+ |
| Construction Costs | Up 3.7% annually | Subsidies for materials |
| Workforce | Shortfall of 100k+ tradies | Apprenticeship Incentives |
| Infrastructure | Shovel-ready land scarce | Last-mile funding |
A Budget that only helps buyers (demand) without supporting builders (supply) is a Budget that fails. Sydney needs more keys in doors, not just more money in pockets. At Flash Conveyancing, we are ready to help clients navigate opportunities.
Flash Conveyancing, led by Julian & Renee, are specialists in property transactions across the whole of NSW. With deep experience navigating local councils like Blacktown, Hawkesbury, Blue Mountains, The Hills, Hornsby, and Parramatta, they bring a personalised touch to every settlement. Whether you’re buying or selling in suburbs like Acacia Gardens, Marsden Park, Glenwood, Kellyville Ridge, Oakhurst, Bella Vista, Rouse Hill, or Windsor, your transaction is handled with expertise, care, and full confidence in the evolving housing landscape.
