For most investors the plan was simple: buy an established home, gear the loss against your salary, and wait for the cycle to hand you the next deposit. From July 2027 that deduction goes, and so does the 50% capital gains discount. Brand new homes are the exception on both counts. Co-develop one for a cash return, or keep it at the developer's cost price with the equity already in it.
You pay the full market price, then need the market to rise before you are ahead. The developer's margin went to someone else.
Capital growth depends on forces you don't control: rates, sentiment, supply. It can take years, or go sideways.
A seven-figure mortgage, all the risk on one asset, and holding costs eating the yield while you wait.
Seven quick steps. Make a guess at each one, and we'll show you the real number.
the dual lens method Step 1 of 7 Everyone agrees on one thing
“The May budget killed property investing.”
One question before you believe them.
Negative gearing wasn't abolished. It was narrowed to brand new.
From 1 July 2027 an established home loses the deduction and a new build keeps it. The market really is grim, mind you: five monthly falls, and 93% of capital city suburbs going backwards. Hold that thought.
Lens one · the price
One of them settled at a different price. What do you think our investor paid?
She came in on the development side, so her share of the developer's profit came off before a retail price existed. Not a discount. A deduction.
The bank valued it at $475,000.
That's 21.7% equity the day she got the keys, and a 6.63% yield on what she paid against 5.36% at retail.
The value didn't catch up to the price. It moved ahead of it.
The catch: you have to be in before the margin exists, while the project is still work rather than a finished home. The discount is the reward for carrying development risk, and a project can go the other way.
Lens two · the growth
Find one that isn't. Tap a suburb to check it.
Nothing checked yet
That's the job Boomscore does across about 15,000 suburbs, in seconds rather than guesses. Days on market falling. Vacancy tight. Stock coming off. It reads the trend, not the headline.
There's always a pocket.
A national headline averages every suburb, so it describes almost nowhere in particular. You don't buy the average. You buy one street.
Both lenses, on one house
What you pay
Where you buy
You start at zero and wait on a market that isn't moving. It's the reason most portfolios stop at one.
Illustrative shapes, not a forecast. The two lines that climb are the same shape: the location does its work whatever you paid.
Not a hypothetical · one completed project
"The property was positively geared from the outset with great depreciation ever since. These have been the best investments I've made, with continued growth even during the housing market downturn."
The 21.7% was built by the project. The decade since is organic capital growth, which the retail buyers next door got too, because the suburb was picked on data. The home has since been sold, so these show what holding on would be worth today, not what it sold for. Every figure is on the case study. Go and check it.
The dual lens method
One lens decides what you pay. One decides what happens after.
It's free, and there are no offers by email, ever.
General information only. Not an offer of any investment, and not personal advice. Sapphire Place is one completed project delivered by our team's earlier development business, and past results are not a reliable indicator of future results. The chart on step 5 is illustrative.
From 1 July 2027, negative gearing on established homes is wound back and the 50% capital gains discount is replaced with an indexed cost base. Negative gearing has not been abolished. It has been narrowed to brand new homes, the ones that add to supply.
So the tax system is pointing investors at new builds, and most people's first reaction to that is a fair one.
You pay top dollar off the plan, and then you wait years for the value to catch up.
At retail, often true. A retail price carries the developer's margin, the marketing, the display suite, the sales commissions, and a little optimism about what the place will be worth once it's finished. None of that is bricks.
New builds are not overpriced. Retail is.
Take that out at the source and the same house is a different investment. That's the first of the two lenses we look through before a project goes ahead.
Every property decision comes down to two questions. We look through both before we commit a dollar.
What you pay
Every brand new home has two prices. Come in on the development side and the margin, usually around 20 per cent, comes off before retail exists: equity the day you get the keys, and a better yield for as long as you own it.
How the cost price works →
What happens after
A national headline averages about 15,000 suburbs, so it describes almost nowhere. Boomscore, our sister research platform, reads supply and demand suburb by suburb, and the trend in each. If the data doesn't back a location, we don't build there.
How we read a location →A tight location lifts rents and values whatever you paid. A cost price protects you wherever you bought. The price lens gives you the head start. The growth lens is what compounds it.
| A pocket the data supports | An average suburb | |
|---|---|---|
| Developer's cost price | Cost price, good pocketBoth lensesEquity on the day you settle, and organic capital growth on top of it. | Cost price, average suburbA risky oneYou start in front, and then not a lot happens. |
| Retail price | Retail price, good pocketA slow resultThe growth turns up, but you paid the margin to get there. | Retail price, average suburbWait and hopeThe usual outcome, and the reason most portfolios stop at one. |
The right suburb at the wrong price is a slow result. The right price in the wrong suburb is a risky one. You want both.
Both paths capture value at the point where property is actually created, not years later when the market catches up.
Put capital into the development and take a cash return at completion, paid from the profits ahead of the developers' share, without carrying the bank debt or running the build yourself.
How the cash return works → Path 2 · Developer cost priceTake a completed home at developer cost price instead of retail. The margin you would have paid becomes manufactured capital growth: instant equity, a boosted rental yield, and a deposit that frees your original capital.
How the margin becomes your growth →Once you see your money back with the expected returns you know this is the real deal. It's a no-brainer. Only wished I had found you earlier.
Read the reviews Sapphire Place at Palm Beach on the Gold Coast: five completed townhouses. One investor kept a home at developer cost price instead of selling for cash. We publish the 2015 projection beside the 2016 settlement, because a number you can check is worth more than one you cannot.
I have a sound understanding of the figures a development can and should achieve, and I know most first-time developers do not maximise their returns. I am also time poor. This is a strategy I could not pull off on my own right now.
Read her full review Start with how it works, then go as deep as you like on the parts that matter to you. The basics are all here, so when you do get in touch, the time goes on what you're after.
The end-to-end process, from data to your return.
See the process →Twelve chapters on how development really works, free to read.
Read the guide →Using market data to locate a purchase, and to time the buy and the sell.
Explore the data →Plain-English reads on the numbers that move the market.
Read commentary →Five townhouses at Palm Beach, and the numbers the investor settled on.
See the numbers →Tell us which path fits and we'll share the next step when the timing is right for you. We never make an offer until we've spoken personally.
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