OUR TOP TIPS FOR ADF PROPERTY INVESTORS

Could this be a year full of opportunities – are you ready? See where property investment can take you in 2025, is it time to expand your vision?

“We are boxed in by the boundary conditions of out thinking” – Albert Einstein 

The last few years have seen a big shift in the Australian property market. Post-COVID disruptions like skilled labour shortages and high material costs have made purchasing or building property challenging for many. But for those who know where to look, 2025 presents plenty of opportunities. At Capital Properties, we work with our clients to help them become ‘Switched on Property Investors’ and make educated investment decisions that align with their financial and lifestyle goals.

In this blog post, we’ll explore some of the top tips for property investors in 2025, highlighting key trends, potential risks, and the best ways to secure your financial future.

Set yourself up for success in 2025. Whether you’re a first-time investor or growing your portfolio, stay ahead of the game by booking your FREE Capital Properties Discovery Session today. Together we’ll make sure you’re ready to take advantages of the opportunities that present themselves.

On the go? Here’s 30 seconds of take outs:

• Interest rates are predicted to stabilise in 2025 – with the first cash rate drop down to 4.1% in Feb 2025.
  • Capital Properties advises its clients to act when they’re ready and not to wait for rates to drop.
  • Know where to invest. Melbourne & some regional areas may offer better value.
  • Rental yields should remain strong, but be mindful of increasing vacancy rates.
  • Property investors & first-time buyers could benefit from government incentives; stamp duty concessions, tax benefits & housing grants.
  • Potential risks; global economic downturns, interest rate hikes, or oversupply.
  • Knowing your financial position is essential.
  • Cultivate relationships with property advisors, real estate agents, Buyers Agents & investment experts.

Keep reading >>

Understanding the market: what to expect in 2025

1. Interest rates: stability or surprise?

In Australia, the Reserve Bank of Australia (RBA), led by Governor Michelle Bullock, has kept all of us on our toes waiting for news of changes to interest rates. The RBA determines interest rates based on various factors, including inflation levels (determined by the Consumer Price Index (CPI)) and the overall state of the economy. The cash rate had been set at 4.35% since November 2023, so it continues to dominate news headlines and investor conversations.

At its first meeting of the year, on the 18^th February 2025, the RBA announced the first cash rate reduction to 4.1%. However, even with the cash rate change, some banks have dropped / some haven’t dropped their interest rates, so it’ll take a little longer to see how it all plays out.

Overall, most economists seem to agree that 2025 is expected to bring more stability. However, there’s still the potential for fluctuations. And although the Australian market is relatively stable, international influences could create changes that are hard to predict. Keeping an eye on the Reserve Bank’s decisions and market trends will help investors make timely moves. Our blog post “Interest rates – will they drop or stay the same?” is a great place to learn more about how these changes will affect you.

• Top tips for property investors in 2025:

Don’t wait for interest rate cuts – act when YOU’RE ready

If you’re considering property investment in 2025 but waiting for interest rates to drop, think again. The current market still favours buyers, and when rates do decrease, there’s going to be a lot more competition which means property prices are likely to surge. If you don’t have a deposit ready, speaking to a property investment expert could uncover alternative options to make this feasible. The key is to seek out the Capital Properties team for some tailored advice and take action sooner rather than later.

2. Property prices and growth areas

While high-demand areas like Sydney and Melbourne may rebound growth this year, emerging markets in some regional areas and smaller cities could provide excellent opportunities. We’re still seeing that shift towards beach-side and rural living as we identified in our blog post “The big shift towards the ideal Australian Lifestyle”.

For example, December 2024 CoreLogic data showed a strong growth in property prices in regional Queensland, with Adelaide in particular showing significant capital growth. In WA, the beachside areas are enjoying a similar renaissance.

• Top tips for property investors in 2025:

Know the market

As always, the Capital Properties advice to ADF investors is to research, research and then research some more. Pay close attention to locations with infrastructure projects, job growth, and rental demand – often driven by access to local amenities. Think proximity to public transport, schools, parks, shops, cafes and entertainment facilities. Check out our blog post “How to buy well”.

4. Government policies and incentives

ADF property investors and first-time buyers should explore government incentives like stamp duty concessions, tax benefits, and housing grants. These can reduce upfront costs and significantly improve investment outcomes. But finding all that information in one spot can be a pain in the you know what. So, to make your life easier, we’ve created a property investment strategy that’s designed with you, the ADF member in mind.

We strongly urge you to get in touch now and we’ll see what point you’re at and help point you in the right direction to make the most of these incentives.

• Top tips for property investors in 2025:

Know your entitlements

If you can only read one article about the home buyer privileges that you’re entitled to as an ADF member, including government policies and incentives, we suggest you make it this one: “Home buyer entitlements for defence members”. Then book your free Capital Properties Discovery Session to talk to the team about how you can take full advantage of these incentives.

5. Potential risks and how to mitigate them

While the Australian property market holds great potential, investors should be mindful of potential risks such as global economic downturns, interest rate hikes, or as mentioned earlier, oversupply in certain areas. From a big picture point of view, the chaos surrounding the Donald Trump presidency means the global economy remains fragile. And we’re also seeing slowing growth in key trading partners such as China. These factors could trigger an economic downturn, impacting employment and property demand.

There are also specific concerns that can occur at state level such as changes to tenancy laws. For example, some states are considering new legislation such as caps on rent increases or additional rights for tenants which could end up affecting investors bottom line.

• Top tips for property investors in 2025:

Strategic planning for long-term success

Savvy investors can continue to weather these uncertainties by conducting thorough research and clearly defining their property investment strategy – with a plan to create a diversified portfolio. That begins with clarifying your goals and making sure you have clear direction and a detailed action plan to achieve specific targets. Start with this blog post: “Goal setting strategy – The Well-formed outcome”.

6. Make sure you’re ready to act

Knowing your financial position is essential to making the most of investment opportunities when they arise. You need to know exactly ‘what you need to qualify for a home loan’ and start setting aside a financial buffer – around 3 months expenses (each property) as a minimum of is a good benchmark – to cover unexpected costs

and provide peace of mind. Proper preparation will set you up for long-term success in the property market.

• Top tips for property investors in 2025:

Build a strong foundation and gather a supportive team

Having a solid financial foundation and a well thought out plan (aka the Well-Formed Outcome) ensures you’re ready to act when the right property comes along. Yep, it’s those four C’s again – critical thinking, collaboration, creativity and communication.

Read through our ‘ADF Property Buyer Checklist’ and use the Capital Properties Property Investment Tools & Apps to make sure you know exactly where you stand.

It’s also worth bearing in mind that many of the best investment properties never hit the public market. Establishing relationships with property advisors, real estate agents, Buyers Agents and investment experts can give you access to exclusive opportunities. It’s true that behind every success is a support team – great investors know and value the power of collaboration.

At Capital Properties, we help ADF members, ADFA cadets, and first-time investors take confident steps toward financial security. With access to exclusive Property Investment Tools & Apps and our Pinnacle Support Program, you’ll have everything you need to make smart, strategic investment decisions.

Ready to get started? Book your FREE Capital Properties Discovery Session today and start building your financial future.

Note: This information is general advice only. Always do your own research and seek independent financial advice

Request Five Local Government Area’s individual downloadable PDF research reports click on the image below.

Are you keeping up with NSW stamp duty changes?

In January 2023, 2 months prior to the NSW elections, both major parties agreed that housing affordability, stamp duty, and tax reform were significant voter issues. So, it’s no surprise that the NSW Premier at the time, Dominic Perrotett (Liberal/National Coalition) announced a key reform ahead of the elections called First Home Buyer Choice (FHBC) scheme.  The scheme allowed first homebuyers to choose between paying stamp duty or an annual property tax.

What are you entitled to under the NSW stamp duty changes?

Perrottet promised the scheme would help families in NSW access home ownership sooner, saying; “This national first will significantly reduce upfront costs, reduce the time needed to save for a deposit and will see most first home buyers pay less tax overall.”

The then Opposition Leader Chris Minns – now acting NSW Premier – criticised the plan as a “forever tax” and said it would be immediately repealed with a Labor government win. And Minns was true to his word, ending access to the scheme on 30^th June 2023 and implementing his own changes to create the First Home Buyers Assistance Scheme (FHBAS). Let’s look at both schemes and what they mean for you.

Just like politics, property markets can also fluctuate, so it’s vital to stay aware of any changes that could affect your investment strategy. The team at Capital Properties stay updated to help you make informed decisions. Book into our FREE Capital Properties Discovery Session to learn more.

And if you’re already on board, our Property Investment Tools & Apps and essential resources from our Capital Properties Pinnacle Support Program will keep you on track.

On the go? Here’s 30 seconds of take outs:

• The First Home Buyer Choice (FHBC) scheme allowed first home buyers to choose between paying stamp duty or a yearly land tax.
• FHBC was for homes worth up to $1.5m & ran from January ‘23 until 30^th June ‘23.
• The First Home Buyers Assistance Scheme (FHBAS) started on 1^st July ‘23.
• Under FHBAS, property tax is abolished, & properties under $800,000 are exempt from stamp duty for first home buyers.
• Plus, properties up to $1 million will have a reduced rate.
• FHBAS applies to buying an existing home, new homes & vacant land for building.
• Stamp (aka “transfer”) duty must be paid within 3 months of sale/transfer contract, except for off-the-plan – where it’s possible to defer up to 12 mths.
• No stamp duty applies if land value is less than $350,000. Above that concessional rates apply.
• See below for eligibility requirements & ADF exceptions.

Keep reading >>

First Home Buyer Choice (FHBC)

The Coalition’s First Home Buyer Choice (FHBC) scheme, which ran from January 2023 until 30^th June 2023, allowed up to 6000 new homeowners to choose between paying upfront stamp duty on homes worth up to $1.5m, or a yearly land tax. The land tax was calculated as a flat payment of $400 plus 0.3% of the property’s land value. For example, if the house valued at $1 million, first home buyers could choose to pay an upfront payment of stamp duty = $40,090 or an annual fee of about $2200.

And the government allowed people who’d just missed out on the deal (if they’d purchased their first house after 11^th November 2022), to apply for a refund on their stamp duty and pay the annual fee instead. It’s believed that at least 2,500 people would have applied for the refund.

Who was eligible for the First Home Buyer Choice (FHBC) scheme?

The scheme was immediately popular with NSW first home buyers, more than 100 applicants a day in its first week. Although it’s hard to find the exact figure paid out in refunds, it was estimated that more than $1.28 million was paid out to the first 30 applicants.

The scheme was especially popular amongst buyers in Sydney’s outer suburbs, in particular Blacktown, Bayside and Parramatta as well as coastal regions where most properties were valued above $800,000.

First Home Buyers Assistance Scheme (FHBAS)

Under the existing Labor government, access to the First Home Buyer Choice (FHBC) scheme was closed off on 30^th June 2023. Introducing instead the First Home Buyers Assistance Scheme (FHBAS). From 1^st July 2023 the option to choose between property land tax and stamp duty would be no more. People who had taken advantage of the FHBC scheme are allowed to continue to pay property tax and will still be exempt from stamp duty for as long as they own the property.

These changes were implemented to create, Labor says, “a simpler, fairer system than FHBC, where first home buyers purchasing properties at the top of the range under the former government’s scheme received a disproportionate share of the benefits.”

Under the new scheme, the property tax is abolished, and any property purchased under $800,000 is exempt from stamp duty. Plus, any property purchased up to $1 million will have a reduced rate.

Note, in Labor communications, stamp duty is also sometimes referred to as “transfer duty”.

Figure 1: FHBC vs FHBAS – comparison of stamp duty savings

Purchase price	Stamp duty under FHBC	Stamp duty under FHBAS	Savings
$700,000	$10,363	$0	$10,363
$750,000	$20,727	$0	$20,727
$800,000	$31,090	$0	$31,090
$850,000	$33,340	$10,023	$23,318
$900,000	$35,590	$20,045	$15,545
$950,000	$37,840	$30,068	$7773
$990,000	$39,640	$38,086	$1555

What properties are eligible for the FHBAS?

The First Home Buyers Assistance scheme (FHBAS) applies when first home buyers are:

• buying an existing home
• buying a new home, and
• vacant land on which you intend to build a home.

When must you stamp duty/transfer duty be paid?

Stamp/Transfer duty must be paid within three months of signing the contract for sale or transfer, except in the case of off-the-plan purchases.

If you buy off-the-plan and you intend to live in the property, you may be able to defer your transfer duty liability for up to 12 months.

What if you’re building on vacant land?

If the land value is less than $350,000, you won’t need to pay stamp duty. For land valued between $350,000 and $450,000, you’ll receive a concessional rate.

If you exchanged contracts between 1^st August 2020 and the 31^st July 2021, the concessional rate is offered for land valued between $400,000 and $500,000.

Who’s eligible for the FHBAS?

• An individual (not a company or trust*) over 18 years of age who’s never owned or co-owned residential property in Australia or received an exemption or concession under this scheme.

• The first home buyer(s) must be an Australian citizen or permanent resident.
• There are requirements for living in the property for non-Australian Defence force members – increasing from 6 months to 12 months after purchase. However, ADF members won’t have to meet these (as long as everyone you’re buying with is on the NSW electoral roll).

*The Chief Commissioner could waive this requirement upon application. Contact Revenue NSW for more information.

As an ADF member, you may also be entitled to other home buying subsidies and incentives. We’ve discussed some of these in our previous blog post “Buying a house while in the Defence Force”.

The team at Capital Properties have been where you’re at now, and it’s our mission to help you take advantage of these opportunities and make smart investment decisions.

Don’t forget to check out Capital Properties Switched-On Strategy Series and Capital Properties Pinnacle Support Program.