Property Investors Exit at Record Rate as Tax Reforms Take Hold
One in five investors sold property in the past year as negative gearing and CGT reforms reshaped holding decisions across Australia.
Record numbers of property investors sold at least one property in the past year, with new survey data suggesting Australia's negative gearing and capital gains tax (CGT) reforms are now directly reshaping selling decisions — not just investor sentiment.
The Property Investment Professionals of Australia's (PIPA) 2026 Annual Investor Sentiment Survey found that 18.3% of investors sold at least one property in the year to August, up from 16.7% the previous year. It marks the third consecutive annual rise in the exit rate, and the highest level recorded by the survey. Australian Broker reports that of those sales, more than half — 51.6% — went to owner-occupiers, with a further 12.4% going to first-home buyers. That means the majority of properties exited by investors have already left the rental pool entirely.
Why Long-Term Landlords — Not Short-Term Speculators — Are Selling
What makes this wave notable is who is selling. The most common holding period among sellers was 10 to 20 years, cited by 37.1% of respondents — up from 30.7% the year prior. These are established landlords, not speculative flippers looking to time the market.
The top reason for selling, also cited by 37.1% of respondents, was rising holding and compliance costs: insurance, property management fees, higher interest rates, and expanding land tax obligations. PIPA chair Cate Bakos put it plainly: "Investors are not selling because they think it is a smart time to sell. Many are selling because the numbers no longer work for them."
The cash flow picture reinforces this. The survey found 62.3% of investors are now in negative cash flow, up from 56% a year earlier. Nearly two-thirds of investors are covering monthly shortfalls out of their own income, relying on long-term capital appreciation to justify the position. Meanwhile, just 7.6% believe now is even a good time to sell, down sharply from 36% in 2025 — meaning the selling that is occurring is driven by holding pressure, not market optimism.
What the Reforms Change, and When They Kick In
The negative gearing and CGT reforms have now passed into law, though the actual new tax treatment only takes effect from **1 July 2027**. Critically, properties purchased before **12 May 2026** retain negative gearing entitlements under grandfathering provisions — meaning investors who already hold property acquired before that date remain protected under the old rules.
Even so, buying appetite has already collapsed. Just 27.8% of investors now plan to purchase another investment property, down from 41% last year. A further 21.5% say they are unlikely to buy again unless the reforms are repealed. Only 14.7% say their intention to purchase additional property is unaffected by the changes. And only 44.1% see the next year as a good time to buy — down from close to 60% the prior year.
Confidence in the stability of the tax system itself has taken a serious hit. A full 87.2% of investors said they lack confidence that future governments will maintain stable, predictable settings for property investors. Bakos captured the longer-term risk: "Once trust in the stability of the tax system is gone, it is extraordinarily hard for the government in power to win that trust back."
For context, an earlier survey had found that 61% of investors said they would scale back or sell if the proposed CGT and negative gearing reforms proceeded. That prediction has now been borne out in the data.
What This Means for Buyers, Investors, and Borrowers
**For first-home buyers and owner-occupiers,** investor exits create real opportunity. The PIPA survey data shows 51.6% of recently sold investment properties went to owner-occupiers and 12.4% to first-home buyers. In markets where investors were previously a dominant buyer group, this shift in the supply mix can ease competition at the lower end. If you've been watching a suburb or regional market for an entry point, now is a good time to check your borrowing capacity and review current home loan options to understand what you can actually afford.
**For existing investors** who intend to hold, rising costs make reviewing your loan structure a genuine priority. Even without selling, it's worth checking whether your current interest rate is still competitive. Use our refinance savings calculator to model whether a lower rate would change your monthly cash flow position, and consider speaking to a broker about lender options for investment loans — including whether you're taking full advantage of any features your current loan allows.
**For would-be investors** considering a new or additional purchase under the new rules, the data counsels careful modelling before committing. Properties purchased after 12 May 2026 fall outside the grandfathering provisions, meaning they'll be subject to the new tax treatment when it takes effect in July 2027. Review investor loan options and run the numbers on your expected cash flow at current interest rates alongside the incoming tax settings before making any decision.
The Role of Professional Advice in a Shifting Market
Despite widespread uncertainty, the PIPA survey found that 96.1% of investors believe property investment advisers should hold formal training or education. Mortgage brokers ranked as the second most-used professional resource among investors surveyed — a clear signal that complexity is pushing investors toward specialist advice, not away from it.
When tax settings, interest rates, and market conditions are all shifting simultaneously, working with a broker who can compare lender policies, model different loan structures, and stress-test your cash flow across scenarios is genuinely valuable. Whether you're reassessing an existing investment position or looking to move into a market that investors are exiting, getting that specialist perspective early can make a material difference to your outcome.
Australian Broker reports on the full PIPA 2026 Annual Investor Sentiment Survey findings.