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This year, agents have been selling investment properties at record levels, as investors exit the market driven by rising costs, regulatory uncertainty, and concerns over federal tax reforms.
Investor sales have reached a record high in 2025, with 16.7 per cent of investors selling at least one property over the past year, compared to 14.1 per cent in 2024 and 12.1 per cent in 2023.
According to the latest Investor Sentiment Survey 2025 conducted by the Property Investment Professionals of Australia (PIPA), the high investor sales signal a rising trend that may strain rental housing supply nationwide.
The survey found that 42 per cent of sold properties were bought by other investors, while 37 per cent were purchased by owner-occupiers and 25 per cent by first home buyers.
PIPA chair Lachlan Vidler said that investor sales have reduced the rental pool, as once a property leaves the rental market, it rarely returns.
“This isn’t just a continuation of last year’s trend – it’s an acceleration,” Vidler said.
“We’re seeing a growing number of long-term investors walking away, and the implications for renters are severe.”
Across the country, Queensland remained the leading state for investor exits, with 35.5 per cent of respondents selling at least one property, up from 33.4 per cent last year.
Similarly, regional Queensland saw the steepest rise, with 15.8 per cent of investors selling – more than double the 7.6 per cent in 2024.
Victoria followed at 30 per cent, while NSW dropped sharply to 11.8 per cent from 25.4 per cent the previous year.
In the cities, Melbourne recorded an increase, with 22.1 per cent of investors selling compared to 18.4 per cent in 2024, while Brisbane rose to 19.7 per cent from 16.3 per cent.
Perth entered the top three for the first time, with an 11 per cent share, while Sydney saw a significant decline to 6.3 per cent, down from 10.2 per cent.
Vidler said that investors have continued to exit Victoria, driven by a combination of rising land tax, new vacancy levies, and ongoing tenancy reforms, which are fuelling market uncertainty.
“Many investors are simply deciding it’s no longer worth the risk or the cost to hold property in the state,” he said.
Why are investors selling?
According to PIPA, investors are selling for multiple reasons, with rising holding costs, compliance burdens, federal reforms, and increased land tax and government charges driving potential sales over the next 12–24 months.
Investor sentiment towards selling is rising, with 36 per cent saying it’s a good time to sell, up from 29 per cent last year.
Data showed that a growing number of investors have been worried about proposed negative gearing reforms, with 53 per cent saying they would stop investing if negative gearing was altered.
Only 22 per cent of investors said they were willing to continue their portfolio under a revised negative gearing policy.
Similarly, if the CGT discount were reduced to 25 per cent after 12 months, roughly half of investors said they would exit the market, while the other half indicated they would continue investing under the revised rules.
“The mere suggestion of changes to negative gearing or CGT is enough to destabilise investor sentiment. These aren’t fringe concerns – they’re mainstream fears held by thousands of everyday Australians who provide rental housing.”
“These figures show a clear erosion of confidence,” Vidler said.
Additionally, Vidler said that investor awareness of tenancy reforms remained low, with 64 per cent unaware of Victoria’s vacant land tax and 60 per cent having limited knowledge of wider changes, highlighting poor government communication.
“Investors are being asked to navigate increasingly complex regulatory environments with little support or clarity. If governments want to retain private rental providers, they need to do a better job of communicating policy changes and providing guidance.”
The survey found that the main reasons investors sold this year were to reduce overall debt (41.7 per cent), manage rising holding and compliance costs (40.4 per cent), and offset higher land tax and government charges (32.9 per cent).
Vidler said that while these trends mirror last year’s results, they indicate slightly increased financial pressure.
Operational expenses have also been climbing, with 39 per cent of investors reporting cost rises of 11–20 per cent, over 21 per cent seeing increases of 21–41 per cent, and 5 per cent experiencing jumps of 41–60 per cent.
Additionally, concerns over rental freezes or caps rose to 37.1 per cent, while worries about proposed tenancy legislation rose to 32.4 per cent, both higher than in 2024.
Despite rising pressures, data showed that most investors have absorbed the costs, with 65 per cent passing on just 10 per cent or less through rent increases.
“This shows the resilience and responsibility of Australia’s property investors.”
“They’re doing their best to shield tenants from rising costs, but there’s a limit. Without meaningful support, many will be forced to reconsider their position,” Vidler concluded.
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