As proposed federal Budget changes shake up traditional wealth strategies, capital allocators are anticipating a generational pivot in Australian portfolio construction. Zagga’s Executive Director, Tom Cranfield breaks down why direct property is losing its lustre, where the $12 trillion real estate market is moving next, and how advisers can capture stable, low-volatility returns without the operational headaches of direct ownership.
Source: ausbiz
Date: 25 May 2026
Key points:
- Policy changes are driving a shift in how investors access real estate exposure
- Demand for real estate remains strong – but with a growing focus on income stability and lower volatility
- New development incentives and offshore capital are creating tailwinds for private credit
In this interview, Tom Cranfield outlines how proposed federal Budget measures, particularly around capital gains and property investment, could drive a structural shift in portfolio construction across Australia. While legislation is not yet finalised, investors are already proactively reassessing their positioning and considering how to optimise outcomes.
A key theme is the expected reallocation away from direct ownership of secondary property towards managed investment structures. These vehicles provide exposure to real estate while delivering income-focused returns, without the same capital gains implications.
Despite this shift in access, demand for real estate exposure remains strong. With residential property accounting for a significant share of Australian wealth, investors continue to seek stable, low-volatility returns tied to the asset class – but in more efficient structures.
From a supply perspective, the policy changes are also influencing development activity. Incentives favour new builds, encouraging developers to bring additional stock to market. For private credit managers investing in development finance, this creates a dual benefit – a deeper pipeline of opportunities and the potential for improved risk profiles through stronger counterparties and project selection.
Tom Cranfield highlights growing offshore interest in Australian real estate private credit. With the market already substantial and expanding, international capital, particularly from Asia, is increasingly seeking stable, risk-adjusted returns in Australian residential-backed strategies.
Watch the full interview below.
