Sterling Property is seeing growing interest from residential investors reassessing their position in the wake of Australia’s most significant property tax reforms in a generation.
With the changes now legislated and taking effect from 1 July 2027, commercial property is increasingly where that conversation is landing.
From 1 July 2027, negative gearing was established on residential properties purchased after 7:30pm AEST on 12 May 2026 will be restricted and the 50% capital gains tax discount replaced with cost-base indexation and a 30% minimum tax on real gains.
Commercial real estate sits entirely outside the negative gearing changes. For investors holding commercial property through superannuation, the CGT position is untouched.
Senior Partner Jack Bradshaw said the legislated changes were already prompting investors to reassess where their capital should be working.
“The investors coming to us are asking a very straightforward question: where do I deploy capital in a world where the residential tax settings have fundamentally shifted?
“For most of them, commercial property is the answer.
“The tax treatment is comparatively favourable, the yields are there, and Perth’s fundamentals are genuinely strong right now,” Mr Bradshaw said.
Perth’s commercial market enters this period from a position of considerable strength. Industrial vacancy sits at approximately 1.9 per cent across metropolitan corridors, with quality stock increasingly scarce in Wangara, Neerabup, Cockburn and Kewdale.
Suburban office is proving a strong option for investors, with tenants increasingly drawn to the convenience and easy access these locations offer. Good quality strata office buildings in particular are attracting strong interest, with investors drawn to improving rents, the entry price point, strata title flexibility and the ability to secure strong tenants.
Neighbourhood retail investments continue to draw competitive buyer interest, most recently evidenced by Sterling Property’s sale of a leased café investment at G2, 18 Ogilvie Road, Mount Pleasant, for $620,000, achieving a sub-5% net return on the back of competitive bidding.
That depth of demand is also evident at the larger end of the market. Sterling Property recently sold 1050 Hay Street, West Perth, a 2,192sqm freehold office building, for $11.5 million, generating approximately 65 enquiries and multiple offers, with the asset ultimately secured by a private local investor recognising both the strong income producing nature of the investment and the site’s long-term redevelopment potential.
Managing Director Brian Neo said Perth’s commercial market was well placed to absorb redirected investor interest.
“Perth commercial property is in a rare position right now. Tightening vacancy, improving leasing momentum particularly in the suburban office market, yield premiums relative to the east coast, and a tax environment that has not been adversely affected by these reforms. ”
“Investors who have built wealth through residential property are looking at commercial with fresh eyes, and what they’re finding is compelling,” Mr Neo said.
