This year, there has been widespread debate on whether investors are abandoning Australia’s housing market.
The latest 2024 PIPA Annual Investor Sentiment Survey suggested that investors are exiting faster than they are entering.
According to PIPA, 14.1% of investors sold at least one property over the past year, up from 12.1% in 2023.
Nearly two-thirds (65%) of these former investment properties were purchased by homeowners rather than new investors.
Separate ATO data published in The AFR shows that the proportion of taxpayers declaring rental income has been falling since 2017, hitting a 12-year low of 19.4% in 2022.
The absolute number of property investors has also declined, falling to 2.29 million in 2021-22 from a peak of 2.39 million in 2019-20.
Nicola McDougall, Chair of PIPA, painted an alarming picture of the situation.
“This year’s survey shows a concerning trend—investors are selling off rental properties, and most of these homes are being purchased by homeowners”, she said.
“When a rental property is bought by an existing homeowner, it’s effectively removed from the rental pool, reducing overall supply”.
“And with population growth outpacing new rental property purchases, we’re heading toward an even tighter rental market”.
“Investors have had enough of being the golden goose for state governments”, McDougall said.
“They’re fed up with the constant barrage of rental reforms, property taxes, and increasing compliance costs”.
“For many, the numbers no longer add up, and they’re making the decision to exit the market”.
The reality is not alarming whatsoever. When an investor sells to a first-home buyer, it does remove a rental property from the market. However, it also removes a renter household from the market.
Therefore, both rental supply and demand are reduced, leaving the market in effectively the same position.
