Revealed: Alarming number of Aus landlords abandoning rental market

Australia’s rental market is teetering on the brink, with a staggering number of property investors abandoning the sector, pushing an already strained system closer to collapse.

New data reveals a record exodus, driven by escalating costs, a murky legislative landscape, and deep-seated fears over proposed federal tax reforms, spelling disaster for millions of renters nationwide.

The 2025 Annual Property Investor Sentiment Survey, released today by the Property Investment Professionals of Australia (PIPA), paints a grim picture.

A shocking 16.7 per cent of investors offloaded at least one property in the past year – a significant jump from 14.1 per cent last year and 12.1 per cent in 2023.

This marks the highest rate of investor sales since the survey began tracking this metric in 2022, signalling an accelerating trend that is rapidly depleting rental housing supply.

“This isn’t just a continuation of last year’s trend – it’s an acceleration,” PIPA Chair Lachlan Vidler warned.

“We’re seeing a growing number of long-term investors walking away, and the implications for renters are severe.

“The private rental market is losing stock at a time when demand is surging, and policy uncertainty is only making things worse.”

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The investor exodus is far from uniform, with some regions experiencing a particularly sharp decline in rental properties.

Queensland continues to lead the nation in investor exits, with a staggering 35.5 per cent of respondents selling at least one property in the state – up from 33.4 per cent last year. Regional Queensland is particularly hard hit, seeing a sharp rise with 15.8 per cent of investors selling, more than double the 7.6 per cent recorded in 2024.

Victoria followed closely, with 30 per cent of investors selling, and Melbourne, in particular, saw an increase, with 22.1 per cent of investors selling compared to 18.4 per cent last year. Brisbane also saw a significant rise, with 19.7 per cent of investors selling, up from 16.3 per cent, while Perth entered the top three for the first time, with 11 per cent of investors selling, indicating a broadening of the crisis beyond traditional hotspots.

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Even New South Wales, despite a decline in investor sales to 11.8 per cent, still contributes to the overall pressure on the rental market.

Mr Vidler said the reasons behind targeted sell-offs were clear.

“Victoria continues to see elevated levels of investor sales, and it’s no coincidence,” he said.

“The combination of rising land tax, new vacancy levies, and ongoing tenancy reforms is creating a climate of uncertainty.

“Many investors are simply deciding it’s no longer worth the risk or the cost to hold property in the state.”

This sentiment is echoed across other high-exit regions, where a confluence of factors is making property investment increasingly untenable.

The most alarming finding from the survey is the devastating impact these sales are having on the available rental pool.

Only 42 per cent of properties sold by investors remained in the rental pool, having been snapped up by other investors.

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PIPA Chair Lachlan Vidler

A substantial 37 per cent were purchased by owner-occupiers, while 25 per cent went to first-home buyers, effectively removing these homes from rental circulation permanently.

“This shift is structural, not temporary,” Mr Vidler emphasised.

“Once a property leaves the rental market, it rarely returns. We’re watching the slow dismantling of Australia’s rental supply, and tenants are paying the price through rising rents and reduced availability.”

According to survey respondents, the top reasons for selling included reducing overall debt exposure (41.7 per cent), rising holding and compliance costs (40.4 per cent), and increased land tax and government charges (32.9 per cent).

Operational costs also soared, with 39 per cent of investors reporting increases of between 11 per cent and 20 per cent, and a concerning 21 per cent seeing costs jump by 21 per cent to 41 per cent.

“If this trend continues, we’ll see even greater strain on the rental market, and tenants will bear the brunt,” Mr Vidler concluded.

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