The share of homes bought by investors climbed to 23.2 per cent over the four weeks ending July 18 after sinking to 20.7 per cent in the four weeks to June 27, according to data from Ray White, which conducts one in four Australian auctions.
While the share is still lower than prior to the budget or a year earlier, the figures suggest investor participation is moving back toward pre-budget levels, Ray White chief economist Nerida Conisbee said on Tuesday.
"The housing measures announced in the federal budget on May 12 were intended to reduce the number of investors buying established properties," she said.
"In the weeks immediately following the budget, the early evidence suggested this was occurring. Investor buying fell and investors accounted for their lowest share of auction buyers recorded this year.
"More recent data, however, suggests that initial response may be fading."
The share of investors in the market was already ebbing ahead of the budget, tracking a broader slowdown in home prices and auctions amid rising interest rates and global economic uncertainty.
With demand continuing to soften broadly, the recovery in the investor share in recent weeks was more a result of weakening owner-occupier activity than a strong rebound in investor demand, Ms Conisbee said.
"The recovery should not be overstated," she said.
The number of investor buyers has climbed to 166 in the last four weeks compared to 149 in the four weeks ending June 27.
But it remains under the 181 investor purchases recorded in the four weeks following the budget.
"The initial fall in investor participation suggests the budget may have influenced buyer behaviour, at least temporarily," Ms Conisbee said.
"The subsequent recovery makes the longer-term impact less certain."
While the changes to negative gearing and capital gains tax concessions were intended to reduce demand for investors in established homes, carve-outs were designed to shift demand toward new builds, encouraging supply.
But new home sales declined 4.6 per cent in June following an even larger fall in May, Housing Industry Association chief economist Tim Reardon said.
"The recent decline in sales reflects households becoming more cautious in response to higher borrowing costs and increased uncertainty, rather than a reduction in Australia's need for homes," Mr Reardon said.
"Despite the decline since the federal budget, sales in the June quarter remain 4.6 per cent higher compared to the previous year, while sales in the 2025/26 financial year remain 18.4 per cent higher compared to the previous year."
Cancellations of new home sales contracts jumped 50 per cent in June compared to the previous month, HIA also revealed in a report released on Tuesday.
"This is likely due to the impact of rising interest rates constraining households' borrowing capacity and conditional finance being revoked," Mr Reardon said.
"It remains too soon for the budget decisions to have this impact on cancellations."
But the budget changes, including restrictions on self-managed super funds borrowing to purchase property, would negatively impact supply and hamper the government's target of building 1.2 million homes in five years, Mr Reardon said.
"The coming months will show whether recent weakness in sales reflects a temporary loss of confidence or a more prolonged period of reduced investment among new home buyers," he said.
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