Goodman Group (ASX: GMG) v REA Group (ASX: REA)

The impact on property stocks reaches further than just prices of residential homes. The Budget has drawn a clear distinction between Goodman Group  and REA Group — and it centres on new supply. Goodman develops industrial, logistics and data centre assets, the very areas the government is trying to encourage through exemptions to the negative gearing and CGT changes. Combined with the AI-driven data centre buildout, the policy backdrop remains supportive for GMG.

REA sits on the opposite side of the equation. Its earnings are tied to activity in the established residential property market, which now faces a structural headwind from the Budget’s property tax reforms. Fewer investment property transactions ultimately mean lower listings activity, softer advertising demand and pressure on REA’s revenue growth.

Goodman Group (ASX: GMG) Industrial Property / Data Centres: The Budget’s negative gearing and CGT reforms specifically exclude new builds and commercial property, and Goodman is the ASX’s largest developer of exactly that. Data centre development, industrial logistics, and new build residential all sit outside the reform’s punitive scope. Goodman is trading a ~10% discount to its historical valuation and its development pipeline of AI infrastructure and logistics assets is structurally aligned with every Budget incentive announced.

• GMG has been tarred with the ASX software sell-off over the last 18-months, but we believe the market has got it wrong – MM owns GMG in our Active Growth Portfolio.

REA Group Limited (ASX: REA) — Established Property Platforms: The Budget has just structurally reduced the investment appeal of established residential property, on which REA’s revenue model depends. Fewer investment property transactions, lower auction clearance rates for established homes, and a structural shift of capital toward new builds all reduce the volume of listings, agent spending, and data product revenue that REA generates from the established property market. When combined with the reinvigorated competition from CoStar Group (NASDAQ: CSGP), which bought rival Domain, REA remains in the too-hard basket for MM.

• We can see GMG start to significantly outperform REA through 2026/7 after largely moving in sync post-COVID.