Hundreds of thousands of rentals have disappeared from the national market as nervous investors lead a mass exodus from the real estate sector.
Rental dwelling sales surged in the past 12 months, according to a survey of 1724 investors by the Property Investment Professionals of Australia.
The results revealed a “staggering” 12.1 per cent of investors sold one or more of their rental properties.
Investors in Queensland and Victoria are leading the exit, with almost a quarter offloading one or more properties in Melbourne and Brisbane, according to PIPA chair Nicola McDougall.
“About 43 per cent of respondents in this year’s survey sold to an existing homeowner, while 30 per cent sold to a first-home buyer,” she said.
“Just 24 per cent sold to another investor – down from 33 per cent last year – which means the majority of those investment properties were likely removed from the rental market.”
Ms McDougall said last year’s survey found 16.7 per cent of investors had sold at least one property in the previous two years.
“Clearly, this would explain the undersupply of rental properties available for tenants around the nation … yet another stark illustration of the mass exodus of private investors from the market.”
Using the 2021 Census baseline of 2.477 million private rental dwellings in Australia, it is estimated that hundreds of thousands of rental properties were sold in the past three years.
The data shows investors deserting Victoria and Queensland, with 24.8 per cent of investments sold in Melbourne and 23.3 per cent sold in Brisbane.
Investors have attributed the sell-off to increased government reform and regulation, including changes to tenancy legislation, rental freezes and an increase in limits or caps.