THE MARKET IS IN GRIDLOCK 🗞️ Real Estate Market Wrap

I'm calling it. August 2026. The housing policy that came out on 11 May 11 has officially failed.

Today, I had just one auction scheduled. I normally conduct 10, 12, sometimes 15 on a Saturday. That one auction attracted zero registered bidders, making it two Saturdays in a row without a single registration.

This isn’t about Labor versus Liberal. It’s about outcomes. Investors are waiting. First-home buyers are waiting. Vendors are waiting. Developers are waiting. And when property transactions stop, the pain spreads to agents, brokers, conveyancers, tradespeople, retailers—and ultimately renters.

Markets don’t care about political intentions. They respond to incentives. The housing policies announced in May have now collided with reality, and from where I’m standing, they’re not working.

Real leadership means examining the evidence and having the courage to say: “We got it wrong. Let’s fix it.”

Australia matters more than anyone’s political ego.

Transcript

Tom Panos 0:00

So I'm calling it August 2026. From where I'm standing on the front line of Australian real estate, I'm going to say that the housing policy that came out on May 11 has officially failed. I want you to think about this for a moment. Today I had one auction. One auction scheduled. I normally do 10, 12, sometimes 15 auctions on a Saturday. As auctions is only a very small part-time part of my life, Saturdays, those 10 hours, I often give out a lot of auctions to other auctioneers. I don't actually run a full-fledged auction company with auctioneers. I'm busy traveling during the week, but I have been doing auctions for 30 years. And the last time I can remember having one auction on a Saturday, I was a young bloke in my 20s. That would have been in the early 1990s. Think about it. And here we are again. But it gets worse. Last Saturday I stood outside a property and had zero registered bidders. On that one, and another five. Zero registration all of last week. That article appeared across a lot of the media outlets. But guess what? It's happened again today. That's two Saturdays in a row. Today only one auction. But zero registrations. Forget about the bidding for a moment. Forget about the buying for a moment. People aren't even putting their hand up and say, you know what? Maybe I'll have a crack. This is just too good to be true at the moment. And here's the crazy part. If you're a buyer, this could actually be the time when you find the bargain of the decade because there might be nobody standing next to you to compete. But buyers, they're not going for it because they think it's going to get worse. Last week I did somewhere between 10 to 12 media interviews, TV, radio, newspapers, and I kept saying the same thing. Guys, don't get carried away. One hot day doesn't make a sum. It was bad. But it doesn't mean it's going to be always bad. But it wasn't bad again today. Maybe last Saturday was just an aberration. Maybe I just got unlucky. Well, it's happened again. And what makes this week particularly disturbing is we're actually seeing some better news during the week where inflation eased, the conversation about interest rates became a little less frightening. And what happened in the property market? Nothing. It didn't wake up, it didn't move, it remained frozen, like a gridlock. So I'm calling it August 2026. From where I'm standing on the front line of Australian real estate, I'm going to say that the housing policy that came out on May 11 has officially failed. And I say, I don't say that because of Labor, I don't say that because of liberal, right? I'm not taking a political stance. I'm not interested in barracking for political football teams, right? I'm interested in outcomes. And the outcome I'm seeing is a gridlock. That's the word for it. Go to all my content from six months ago, way before the budget, and I kept thinking to myself, I can see what's going to happen. We're going to have a halt in transactions. Some of you were probably thinking, Panos is getting paranoid. He's lost the plot. He's being dramatic. I wasn't being dramatic. I was seeing what was going on. Let's call it for what it is. Many years ago, the Australian governments decided that they would actually not get involved with public housing. And what they did is that they left it to the public to do. They said, you know what? It's too hard for us. You go off and do it. Let developers build. And then let's get mums and dads, nurses, let's get school teachers, let's get plumbers to buy investment properties, they're going to be losing money along the way because when you're getting, you know, three or four percent yields, right, you're going to lose money. So let's soften it up a little bit for them, and that way that they'll do it. With the view that one day when they sell the property, that they'll make some money and that pain and suffering would have paid off for them. But what? Instead of saying thank you, the government went along and said, nah, we're gonna take some money out of you again because they were running out of money, the government's running out of money. It's clear. It's clear what this is. There's a need for money, that's all it is. And I knew that this was gonna be a problem. Even I didn't expect the reaction to be this severe. I'm not an economist. I studied finance and business at university, both in the undergrad, and then when I went and did my master's, it was mainly in behavioral sciences, but when you do a master's, you get the basic business economic subjects. More importantly, I've spent four decades watching and understanding buying, selling real estate, and I'm obsessed with this stuff. I consume hours of it every day. I'm weird like that. That's all I do. I don't really have a social life. And one thing I've learned is this markets don't care about political intentions. Markets respond to incentives, man. That's what they respond to. And when you change the incentives, which they did, people changed their behavior. And the government, man, you stuffed up here. You thought to yourself that you were gonna start getting people that were buying residential property that was second-hand property, that you were gonna take those incentives away, you were gonna put them only on the new property, they were then gonna go buy the new property that was gonna then force developers to keep building because of the demand. But you know what? Your plan got rejected. The investors did not go off and buy the new property, they bought nothing. Change the economics for property investors buying established homes. You encouraged investors towards new housing, and it's a failed experiment because developers aren't going to be building more, that guild doesn't stack up, more supply, right, has got to come from the government sitting down and really addressing the problem. And first home buyers, man, they're not taking advantage of this opportunity. That's why we've got this damn grid up. There's one problem: human beings do not believe in treasury spreadsheets. Investors didn't automatically say, okay, what a smart idea, Dr. Chalmers. Well, that PhD you did, man. Well, you've worked it out. Oh gonna buy a brand new apartment instead. No, they didn't. They bought nothing. And first home buyers didn't suddenly rush in and buy everything investors walked away from either. And now we're dealing with borrowing capacity constraints. Banks have gotten harder, costs of living pressure, and fear of buying in a falling market. That's the big issue here. So you've created the worst possible outcome. The investor weights, the first home buyer weights, the vendor weights, the developer weights, and the market freezes. That's a gridlock. And there is an enormous economic consequence that somebody seems talking. Man, you can tell I'm angry. The ABS is telling us the Australian government collected roughly 34 billion from stamp duties. Right? Now I'm hearing anecdotal evidence suggesting transaction volumes are down around 40%. I'm not saying that's the official number yet. We need to get that number released. But when I speak to data companies, when I speak to real estate agents, this is the number that seems to happen. If transaction activity has been swiped by 40% lower for a 12-month period, man, we're talking about $14 billion of lost revenue to the government instead of collecting 34. And you're potentially talking about something being more like $20 billion instead of 34. Think about that. Because when property transactions disappear, it's not only that real estate agents suffer, man, right? And I feel for the agents and I feel for the auctioneers. I'm lucky I'm not dependent on auctions for a living. I feel for the mortgage brokers, I feel for the conveyances, the solicitors, the building inspectors, the removalists, the photographers, the tradespeople, the furniture retailers, the banks. I don't feel for them. And I feel for the state governments. Because they're going to have a very big fight with the federal government. Because the state governments are the ones that are losing all this revenue. Property's an enormous ecosystem, man. Stop the transactions and the blood stops circulating through the body, man. And then there's the biggest potential of the unintended consequence of all. This is the biggest. Renters. You've got to feel for the renters, man. For Dekas, Australia has effectively relied on private investors to provide a significant share of rental housing. Mate, these investors, they took the debt, they paid the interest, they paid the council rates, they paid the water rates, they paid the insurance, they paid the maintenance, they took the risk, and in exchange, the tax system historically allowed them to offset a little bit of their losses. You can argue about whether the system was right or wrong. That's politics, okay? But here is something that's not politics. If you make providing rental accommodation sufficiently unattractive, don't be surprised when fewer people volunteer to provide it. And that's what's happened. And if rental, can someone please send this video to someone that knows someone in the government, please? And if rental supply tightens while population and housing demand continues growing, what happens to rents? That's the question policy makers need to answer. Because you cannot solve a housing affordability issue by creating a rental affordability problem. That's what's happening. And this is where governments have to be prepared to say three words that politicians absolutely hate saying. We got it wrong. We got it wrong. That's leadership, but when you accept it, there's nothing shameful about introducing a policy, getting a real world feedback, and then turning around and saying, okay, listen, this is called the mess. Let's let's just regroup. What dangerous is seeing evidence something isn't working and continuing because reversing would be embarrassing. That's the problem that you've got now. There's an old saying: no plan survives, first contact with reality. Well, the Australian housing policy that came out of the May 11 budget has now made contact with reality. Reality standing outside an auction in Sydney with an auctioneer, a vendor, a property, and not one registered bidder two weeks in a row. And that's why I'm saying today, please review it. Look at the transaction data, look at the investing lending, look at the new construction, look at rental listings, look at the stamp duty receipts, and if this evidence says that the policy isn't producing the intended result, let's change it. Not because Labor's wrong. Not because liberals are right. But because this country I was born in Australia matters more than anyone's political ego. And I'll finish with this. I'll just finish it. I just regret I should have stayed in Greece another three weeks.