Investors Exit Apartment Markets

More property investors in Sydney and Melbourne are selling their apartments due to rising costs, low rental returns, and tax changes. In Melbourne, investor-owned listings now make up over half of the properties for sale in the CBD, with similar trends in suburbs like Darebin-North and Moreland-North. Sydney is also seeing a surge in ex-rental properties hitting the market, particularly in Parramatta, Chatswood, and Ryde. Many investors have experienced little to no capital growth for over a decade, leading them to sell and reinvest elsewhere.

The combination of high mortgage repayments, lower rental income, and stricter regulations has made it more challenging for landlords to maintain positive cash flow. For example, investors in Sydney face a weekly shortfall of $611 between rent and mortgage repayments, while Melbourne investors face a $292 gap. As more investor-owned properties are listed, it increases supply, but these apartments are not always suited to first-home buyers, further slowing the market.

With more apartments becoming available, Sydney and Melbourne’s property markets are in transition. However, many of these properties were designed for investors, making them less attractive to owner-occupiers. As a result, some investors are selling at a loss just to exit the market, uncertain if future interest rate cuts will improve conditions.

For investors looking for a more stable way to grow their wealth, Mountain Asset Management offers investment opportunities in secured mortgage loans and diversified income funds. Instead of dealing with property market fluctuations and increasing costs, investors can potentially earn attractive returns through investment in the Ordinary Class in the Mountain Monthly Income Fund, providing a smarter and more stable alternative to direct property ownership.

Source: https://www.afr.com/property/residential/landlords-pull-out-of-melbourne-sydney-apartment-markets-20250206-p5la01