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Landlords offloading rental properties
With the number of rental properties already critically low, new research shows a surge in the sale of rental dwellings over the past 12 months.
According to the Property Investment Professionals of Australia (PIPA), 12.1% of property investors sold one or more of their rental properties in the past year. For comparison, in 2022 the survey showed 16.7% of investors had offloaded one or more properties in the previous two years.
The 2021 Census showed there were 2.477 million private rental dwellings in Australia, suggesting more than 470,000 have been snapped up by existing homeowners or first-home buyers – not by other investors – in the last three years.
Of those that sold in the last 12 months, just 24% of houses were bought by another investor. This is compared to 33% last year.
"This all spells bad news for tenants already struggling with incredibly low levels of supply, which is putting upward pressure on rent prices. Private landlords provide the overwhelming bulk of rental properties. At a time when they are needed more than ever, it's clear that property investors are being driven out of the market," PIPA says.
The number one reason for selling is increased taxes, cited by 47% of investors who say reforms to levies and duties by governments make property a less attractive asset to hold.
This was followed by changes to tenancy legislation (43%), rising interest rates (40.1%), talk of rental freezes (34.6%), need to reduce total borrowings (33.1%), positive selling conditions (29.2%) and rental increase limits or caps (27.7%).
Information Courtesy: Money Magazine – September 2023
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