In short: Established properties have historically delivered stronger capital growth because more of their value is land, while new properties offer bigger depreciation deductions, lower maintenance and higher rents. The 2026 tax changes tilt the maths: from 1 July 2027, only new builds keep full negative gearing for investors who buy after 12 May 2026.

Maximising capital growth should be the main objective for any property investor. However, the best path to get there is rife for debate.

If you’re searching for the next investment, you’ll be faced with a choice between new or old property. While both options have their advantages, there are also drawbacks to consider.

Everyone in the property industry has their own opinion and advice can differ wildly depending on who you talk to.

In this article, we’ll distil the arguments from both sides of the debate to help you determine which property type is better suited to your investment strategy.

Investing in New Property

Pros

• Low maintenance overheads: Newly-built homes should offer lower maintenance costs as things take longer to break down. Older properties are at higher risk of requiring repairs and will usually get more expensive to manage over time.

• Tax benefits: There are several tax benefits available for property investors, including tax deductions for costs such as furnishing. Additionally, the newer the property, the better the tax depreciation benefits are for investors.

• Tax rules now favour new builds: from 1 July 2027, investors who buy an established home after 7.30pm on 12 May 2026 can only offset net rental losses against residential property income or gains. New builds keep the old negative gearing treatment, and investors in new homes can choose the more favourable capital gains tax method on sale. In Victoria, a temporary off-the-plan stamp duty concession also applies to apartments, units and townhouses bought before 21 April 2027.

• Equipped with the latest technology: A new house will often be fully equipped with the latest technology and features, meaning you may have access to solar panels, smart appliances and app-controlled security systems. Newer homes are also typically built with better insulation and lighting, which can help reduce your energy bills.

• Looks attractive to tenants: Newly-built properties are appealing to tenants and create increased demand for the home. A larger rental pool will draw higher rental prices and allow you to be more selective when choosing high-quality tenants.

Cons

• Expensive: New properties come at a premium and can be unaffordable for some buyers. A higher purchase price can also subdue the long-term capital gains of your asset.

• Greater market risk: New properties are the first to get affected when property prices start to dip. Prices for older properties tend to be sturdier and are less vulnerable to external market factors.

• Limited value-adding opportunity: Renovations or improvements to new properties add far less in value and will take longer to return any capital growth benefits.

• Limited land component: The land-to-asset ratio is weaker in new properties due to the physical costs of the asset itself. As land historically grows in value and the building itself depreciates, a smaller land component will often lead to comparatively smaller capital gains.

Investing in an old property

Pros

• Relative affordability: Compared to buying a new property, an established home will usually help you enter the market at a cheaper price point.

• More land value: An old property will have a high land value in comparison with the building value. Older properties also tend to be in areas closer to the city, which can lead to the land becoming increasingly sought after over time.

• Character: Character is a vital factor that draws the attention of many buyers. Old properties may have a historic value consisting of distinct architectural features and are often situated in attractive and desirable areas.

• Potential to add value: Older properties can present plenty of opportunities for investors who are willing to rebuild or renovate. This can add enormous value to the property, particularly for run-down or less desirable homes.

• Capital growth: Due to a greater land-to-asset ratio, established properties tend to draw higher capital growth appreciation when compared to new properties.

• Established infrastructure areas: Old properties are generally located in established areas with easy access to schools, hospitals, shops and the CBD.

Cons

• Higher maintenance costs: Holding onto an old property will inevitably come with the burden of ongoing maintenance and repairs. Buildings progressively break down over time, and servicing these problems can prove time-consuming and costly.

• Less appealing to tenants: Old properties aren’t usually equipped with the latest technology, amenities or designs, which can lead to weaker demand from tenants.

• Lower rental return: Old properties tend to have lower rental returns compared to newer units, in part due to lower rental appeal and higher land value.

• Lower depreciation write-offs: since 2017, investors generally cannot claim depreciation on plant and equipment (such as appliances and carpets) in second-hand residential property.

• Less favourable tax treatment from 2027: established homes bought after 12 May 2026 lose the ability to offset rental losses against salary from 1 July 2027.

So which one is better?

Ultimately, the choice between new and old property for your next investment will come down to your individual circumstances.

If you want a competitive rental yield or don’t want the burden of ongoing maintenance, new properties can be a good option for investors.

However, when it comes to long-term capital growth, established properties have historically been the better performer. Weigh that against the new tax rules, which now reward new builds for investors who rely on negative gearing. The location of your property will be the biggest factor in performance, so extensively analyse the potential areas for your investment.

If you are opting for a new build, do your due diligence on the builder to ensure the quality of your purchase.

Always do your research and get advice from your broker and accountant before you buy.

Frequently asked questions

Is it better to invest in new or established property in Australia?

Established property has historically grown faster because of its land content, but new property now has tax advantages for investors who buy after 12 May 2026. The right choice depends on your cash flow, tax position and timeframe.

Can I negatively gear a new apartment?

Yes. New builds that add to housing supply keep full negative gearing under the 2026 changes. The definition of a new dwelling is still being finalised, so confirm with your accountant.

Do old properties have any depreciation?

Usually only capital works (the building structure, if built after September 1987), not plant and equipment, for second-hand residential property bought since 2017.

Last updated: 25 October 2026.

General information only. This article does not take into account your objectives, financial situation or needs, so consider whether it is appropriate for you and seek personal advice before acting. Elephant Financial Pty Ltd trading as Elephant Advisory is an authorised credit representative (ACR 487962) of Yellow Brick Road Aggregation Pty Ltd (formerly Vow Financial Pty Ltd) (ABN 66 138 789 161), Australian Credit Licence 390261.