Half of all rental properties in Australia are sold within two years, according to a report by the Australian Housing and Urban Research Institute (AHURI).
The average investment period is almost four years, however. About 22% of landlords sell after just one year.
“Landlords who are ill-positioned to retain their rental investments for long can disrupt the supply of private rental housing, with potentially negative impacts on tenant affordability and security,” said Curtin University’s Ranjodh Singh, the report’s lead author.
“The research confirms some conventional wisdoms about who we might expect to be a landlord in Australia, but it also has some less intuitive findings.”
According to the report, about 28% of landlords continue to provide a rental property for at least 20 years. Those who buy or keep their rental properties for longer tend to be aged in their late 40s to early 50s, earn a higher-than-average income, and own a home.
Landlords likely to sell their rental properties tend to be preparing for retirement, unemployed, lower-income, or under the age of 35. While those aged 25-34 are more likely to buy a rental property than other age groups, they are also more likely to sell quickly.
Programs that could educate landlords on retaining a rental property could promote the supply of long-term rental housing, AHURI said.
The report also recommended thorough financial risk assessments by lenders, and maintaining tax incentives that encourage landlords to keep their rental properties.
Rent increases have significantly outpaced income growth in both every regional area and almost all capital cities in Australia since 2020, according to SGS Economics and Planning. Rents have risen at least four times faster than average incomes in Sydney and Western Australia.
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