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Investors have been leaving the property market in large numbers due to rising costs, tax changes, and regulatory uncertainty, with PIPA warning this could worsen the rental crisis.
Property Investment Professionals of Australia (PIPA) chairman Lachlan Vidler said mounting costs, regulatory uncertainty, and looming tax reform have steadily driven investors out of the market.
“Investors are selling up, and the homes they leave behind are often snapped up by owner-occupiers, permanently removing them from the rental pool.”
“This is not just a blip – it’s a structural shift,” Vidler said.
According to a PIPA analysis of the Australian Taxation Office’s data, more than 7,000 individual property investors exited the market in 2022–23, the steepest annual decline in over 25 years outside the global financial crisis and COVID-19.
Additionally, the 2024 PIPA survey found that 14.1 per cent of investors sold a property last year, up from 12.1 per cent, with most owning it for less than 10 years and one in five for under three years.
“These are not long-term investors cashing out after decades,” Vidler said.
“They’re people who entered the market with good intentions and were forced out by rising costs and policy uncertainty.”
In its 2024 survey, PIPA found that 44.1 per cent of investors blamed rising holding and compliance costs, 35.4 per cent cited higher land tax and charges, and many voiced growing concerns about federal tax reform.
“Nearly half of all investors – 44 per cent – said the future risk of changes to negative gearing or CGT would influence their decision to sell. That’s a flashing red light for policymakers,” Vidler said.
The survey found that government interference in the rental market was investors’ top concern, with Vidler warning that constant rule changes make future planning impossible.
“They want to know that the rules won’t change halfway through the game.”
Vidler said the investor exodus is intensifying Australia’s rental crisis, highlighting government policies that could limit supply and raising questions about the Treasurer’s stance on Labor’s negative gearing and capital gains tax (CGT) commitments.
“Negative gearing and CGT concessions have helped everyday Australians provide rental housing for decades. Undermining them now is reckless,” he said.
“The Prime Minister has recently indicated that no changes to the two policies are mooted, however, the Treasurer appears to be saying otherwise – no wonder investors are confused and increasingly selling up,” he said.
As population growth outstrips new rental supply, PIPA urges the government to back property investors and uphold established tax policies that promote investment.
“We need more rental properties, not fewer.”
“If the government continues down this path, they’ll find themselves with an even bigger rental crisis on their hands – and fewer people willing to help solve it,” Vidler concluded.
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