One thing I’ve learned over many years in property is this:

Money doesn’t disappear. It simply moves to where it’s treated best.

With the proposed budget changes around negative gearing and CGT, there’s been a lot of discussion around what happens next. While nothing is final yet, if these changes proceed, they could reshape where investors choose to place their money over the coming years.

Historically, many investors have gravitated toward established residential property because the numbers stacked up from both a tax and growth perspective.

Even though it never made sense to me and I have been on multiple podcasts, written many blogs and given many interviews on why I don’t negative gear (and don’t recommend it) as a primary strategy.

Chasing tax deductions was never the game.

Building assets and generating wealth is.  

But if the rules change, capital may begin flowing elsewhere:

• Commercial property
• New residential projects
• Property developments
• Shares and the ASX
• Overseas opportunities
• Higher-yield investments… and a few things people will suddenly become “experts” in by next Tuesday.

Commercial property may become increasingly attractive because, unlike established residential, many of the proposed changes appear to target traditional housing investment rather than commercial assets.

Now, before everyone rushes out buying commercial property tomorrow, it’s important to remember:

Not all properties are created equal.

Markets don’t reward every asset equally.

Capital generally flows toward:

• Strong income
• Quality tenants
• Lower risk
• Better returns
• Long-term fundamentals

That’s why I’ve always focused on manufacturing value rather than chasing hype.

Many people buy property hoping the market does the heavy lifting.

I prefer creating value through understanding community needs, securing stronger tenants and leases, achieving strategic planning outcomes, and developing assets that enhance both income and long-term value.  

Because in commercial property, value often comes from income first.

For example:

A property earning $300,000 net rent:

• At a 6% yield = approximately $5 million value
• At a 5% yield = approximately $6 million value

That’s roughly a $1 million increase in value without increasing the rent.

Same income. Different market demand.

This is one of the reasons I believe understanding fundamentals matters far more than following headlines.

The next few years could create significant opportunities for those who understand where capital is likely to move and, more importantly, why.

As always, I’ll continue sharing what I’m seeing, what we’re learning, and what opportunities are crossing our desk.

If you’d like to explore some of the projects I’m working on and learn more, send me an email, I’d love to connect

General information only and not financial advice. Always seek advice appropriate to your personal circumstances.

-Strategic Flipping

Shehan Tambinayagam