Property Investors Are Buying More, Not Exiting

Key Takeaways

• 22,640 rental homes listed for sale in past three months
• Sydney saw 4,865 investor listings, Melbourne 5,565
• Investor listings represent 21% of all homes on market in two cities
• Negative gearing debate hasn't triggered a mass sell‑off yet
• Potential policy shift could tighten rental supply, impacting prices

Pulse Analysis

The Albanese administration’s proposed tweaks to negative gearing and the capital gains tax discount have dominated headlines, prompting speculation of an investor exodus. Negative gearing—allowing landlords to deduct rental losses against taxable income—has long underpinned Australian property investment. The capital gains discount, which halves tax on profits from assets held over a year, further sweetens the deal. While political rhetoric suggests a looming crackdown, the market data tells a more nuanced story: investors remain active, and many are even expanding portfolios despite uncertainty.

FoundIt’s recent analysis reveals 22,640 former rental properties listed for sale across Australia in the last quarter, with Sydney and Melbourne alone accounting for over 10,000 of those listings. That translates to roughly one in five homes on the market in the two largest cities being investor‑owned. Such a sizable share indicates that landlords still view property as a resilient asset class, and the absence of a mass sell‑off helps preserve rental stock. For tenants, this means continued, albeit modest, pressure on rent growth, while homebuyers face steady competition from cash‑rich investors.

Looking ahead, the real impact hinges on how the government finalises its reforms. If negative gearing concessions are reduced or the CGT discount narrowed, investors may reassess risk‑adjusted returns, potentially pulling back on new purchases and accelerating sales of existing assets. That could tighten rental supply, push vacancy rates lower, and lift rents—factors that would reverberate through the broader economy. Conversely, a moderate approach could maintain the status quo, keeping the rental market stable while still addressing housing affordability concerns. Stakeholders should monitor policy details closely, as even incremental changes can shift investor behavior and reshape Australia’s property landscape.