Rental Property Pool Has Shrunk

The number of investors entering the property market has increased, but it is not keeping up with those leaving the market, leading to a shortage of
rental properties.

An exodus of property investors in previous years has resulted in the largest shortfall of rental homes being in seven years, according to new data from
REA Group.

It says smaller returns, tighter lending policies and changes to landlord’s rights has caused many investors to sell more than buy, resulting in a
shrinking rental market.

Simon Pressley from Propertyology says there are 20,000 fewer rental properties being advertised nationally compared to five years ago.

“Plain and simple, rental supply is a direct outcome of investor activity. It has always been that way,” he says.

“Since 2015, investor participation rates in this country have been well short of demand.”

The outcome is vacancy rates below 1.5% in six of the eight capital cities and in most regional areas.