Australia’s rental market has lost tens of thousands of properties in just three months as landlords sell ahead of expected changes to capital gains tax and negative gearing, The Daily Telegraph has reported.
New analysis of quarterly sales data by FoundIt showed 22,640 former rental homes were sold nationally over the period, including 4,865 in Sydney and 5,565 in Melbourne. Around 21% of all homes listed for sale in both cities had been agency-managed rentals before coming to market, a volume the report described as a “flood”.
“The 4,865 ex-rentals leaving Sydney’s rental market this autumn are 4,865 properties that may never return as rentals,” the FoundIt report said.
The surge in investor sales comes as the Albanese government flags wide-ranging tax reforms in the upcoming federal budget, including replacing current capital gains tax discounts for investors with an indexation-style system, alongside adjustments to negative gearing.
FoundIt head of research Kent Larnder said the prospect of higher tax bills appeared to be encouraging already stretched owners to exit sooner rather than later.
“There is a genuine fear of the changes,” Larnder said. “It may be an irrational fear, but it is reshaping the assets people buy.”
He noted that many smaller investors were feeling a “triple whammy” of higher interest rates, fuel costs, and broader cost-of-living pressures, with some “cashing in their chips” in markets where they have built up substantial capital gains.
In Sydney, the biggest landlord exits were recorded in the CBD and inner south, the north shore, and Parramatta. In Melbourne, inner-city precincts such as Docklands and Southbank, along with western suburbs, saw high volumes of former rentals sold.
The shift is tightening options for tenants already facing steep rent increases.
Two Red Shoes mortgage broker Brett Sutton told The Daily Telegraph the fallout from reduced investor activity would be felt most acutely by tenants.
“The uncomfortable truth is that a majority of renters are not in a position to buy,” Sutton said, warning that for many households the choice was effectively “rent or have nowhere to live”.
SQM Research director Louis Christopher said vacancy rates were already low and cautioned that, “Without a significant increase in new housing supply and/or a stabilisation of population growth rates, it is likely that rental pressures will remain elevated throughout 2026.”
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