Thousands of property investors have left the housing market over the past year, raising fresh alarms about Australia’s worsening rental crisis. Data released by the Property Investment Professionals of Australia (PIPA) reveals the steepest annual drop in individual property investors in over 25 years, outside of the global financial crisis and the COVID-19 period.
PIPA Chairman Lachlan Vidler said this shift is not a temporary blip but a deeper structural problem that is reshaping the country’s rental sector. “Investors are selling up, and the homes they leave behind are often snapped up by owner-occupiers, permanently removing them from the rental pool,” he said.
ATO data for the 2022–23 financial year shows more than 7,000 individual property investors left the market compared to the previous year, halting a trend of consistent growth that had been building for decades.
Findings from the 2024 PIPA Annual Investor Sentiment Survey point to a growing number of landlords exiting the market. Around 14.1% of investors sold at least one property in the past 12 months, up from 12.1% in 2023. Nearly two-thirds of those who sold had owned the property for less than a decade, and almost one in five had held it for fewer than three years.
“These are not long-term investors cashing out after decades,” Mr Vidler said. “They’re people who entered the market with good intentions and were forced out by rising costs and policy uncertainty.”
The survey shows that increased holding and compliance costs were the top reason cited for selling, nominated by 44.1% of investors. Another 35.4% pointed to the growing burden of land tax and government charges. But what appears to be worrying investors most is the looming spectre of federal tax changes.
“Nearly half of all investors—44%—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,” Mr Vidler said.
Government interference in the rental market topped the list of concerns for both current and would-be investors. “All investors want is clarity and consistency—they can’t plan for the future when the rules keep changing,” he said. “They want to know that the rules won’t change halfway through the game.”
Vacancy rates remain critically low in many parts of the country, a situation made worse by investor departures. Despite this, Mr Vidler said, governments are contemplating tax policies that could further deter participation in the private rental market.
“Why, in the middle of a rental crisis, would anyone think it’s a good idea to dismantle the very policies that underpin rental supply?” he said. “Negative gearing and CGT concessions have helped everyday Australians provide rental housing for decades. Undermining them now is reckless.”
He also criticised what he called mixed messaging from senior government figures. “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.”
PIPA is now calling on the Federal Government to reaffirm its commitment to tax settings that encourage property investment and help address the growing gap between rental demand and supply. “We need more rental properties, not fewer,” Mr Vidler said. “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.”
PIPA, a not-for-profit organisation representing professionals in the property investment industry, says the time for policy certainty is now.
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