They argue corporate investors will be attracted to rising rental returns set to be unleashed in residential property as retail investors flee the space<\/a>.<\/p>\n The switch from mum-and-dad landlords<\/a> to institutional landlords would have major repercussions, changing the nature of the rental market<\/a> dramatically \u2013 and not necessarily for the better.<\/p>\n Next week\u2019s federal budget is expected to remove negative gearing arrangements on existing properties<\/a>.<\/p>\n Established homes are by far the most popular choice among mum-and-dad investors, representing an estimated two-thirds of investment properties.<\/p>\n In contrast, investment in new property is expected to be exempt from the planned changes<\/a>.<\/p>\n In raw numbers, the change is set to impact about 700,000 everyday investors.<\/p>\n There are an estimated 1.1 million investors across the market who are negatively geared, with an estimated two-thirds of that number in established homes. <\/p>\n Negatively geared property investors can claim losses relating to an investment property as a tax deduction.<\/p>\n The tax concession has allowed many investors to make the numbers work on property investment despite mixed returns in recent years. <\/p>\n Property advisers suggest tax-focused investors will now concentrate more heavily on rental yield than capital gain in the residential market, a reversal of the current trend where capital gain is crucial and yield remains modest, especially in metropolitan markets.<\/p>\n Maple Investment Group founder Beau Arfi said if the rules are changed, investors will not stop looking for leverage or yield.<\/p>\n \u201cThey will start looking harder at which assets still make sense,\u201d Mr Arfi said.<\/p>\n Ray White chief economist Nerida Conisbee said the change would make investing less attractive and would also lead to less investment in residential homes.<\/p>\n \u201cSomeone has to provide rental housing,\u201d Ms Conisbee said.<\/p>\n \u201cIf you look at the US, when there was a reduction in private investor activity, the big private equity funds stepped in. It\u2019s a real concern if we start to have Blackstone and other groups of that scale buying up property.\u201d<\/p>\n In the US, the controversial entry of giant US private equity funds into the residential market prompted President Donald Trump to sign an executive order earlier this year restricting funds that own more than 1000 homes from purchasing single-family properties.<\/p>\n In the Australian market, Treasurer Jim Chalmers recently encouraged industry super funds to get involved as investors in Australian housing. Several funds, including Australian Retirement Trust and REST, signalled interest in directly investing in the residential market if regulatory impediments such as current stamp duty rules<\/a> could be changed.<\/p>\n A report from policy group Australian Institute for Progress said significant rent increases could materialise within two years as landlords seek to compensate for higher costs.<\/p>\n \u201cRents could be 11 per cent higher than they otherwise would be,\u201d the report claimed.<\/p>\n Australian Institute for Progress executive director Graham Young said the changes would see mum-and-dad investors exit the residential market.<\/p>\n \u201cBut I\u2019m not sure the big (super) funds will step in,\u201d Mr Young said. \u201cThey may find it hard to see the kind of returns they desire.<\/p>\n \u201cAt the same time, we are going to see these landlords, the people next door who are generally good to deal with, leave the market and instead they may end up giving concessions to overseas companies.\u201d<\/p>\n As fewer investors remain in the market, it is widely expected that rents and rental yields will rise in the months ahead; the only question is by how much.<\/p>\n According to the AIP report, ABS figures show the rents have already increased by 23 per cent over the tenure of the Albanese government, significantly higher than the general inflation rate over the same period of 16 per cent. <\/p>\n James Kirby, Associate Editor-Wealth, is one of Australia\u2019s most experienced financial journalists. James hosts The Australian\u2019s twice-weekly Money Puzzle podcast.![\"James](\"https:\/\/www.europesays.com\/australia\/wp-content\/uploads\/2026\/05\/3d50bf0c-206e-43d4-a96e-8599b15cd448.png\")
<\/a>James Kirby<\/a>Associate Editor – Wealth <\/p>\n
\nHe is a regular commentator on radio and television, the author of several business biographies and has served on the Walkley Awards Advisory Board
\nHe was a co-founder and managing editor at Business Spectator and Eureka Report and has previously worked at the Australian Financial Review and the South China Morning Post. Since January 2025 James is a director of Ecstra, the financial literacy foundation.<\/p>\n","protected":false},"excerpt":{"rendered":"The Australian Business Network A mass exit of mum-and-dad investors looks set to hit the residential property market…\n","protected":false},"author":2,"featured_media":7450,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[2],"tags":[124,2513,22,23,133,8752,8764,21,8754,8746,8747,8771,2137,8770,8761,8750,1861,8753,8749,8755,8353,3978,8757,8759,4047,3180,8769,8765,8760,3977,8775,8778,8741,8740,8742,119,135,8756,120,8768,8748,8774,8751,8758,8776,5434,8772,8779,8773,8766,8745,8763,8767,8743,8762,8777,8744,117],"class_list":["post-7449","post","type-post","status-publish","format-standard","has-post-thumbnail","category-australia","tag-america","tag-andrew-henshaw","tag-au","tag-australia","tag-australia-and-new-zealand","tag-australian-institute-for-progress","tag-australian-retirement-trust","tag-austrlia","tag-beau-arfi","tag-budget-negative-gearing","tag-capital-gain","tag-corporate-landlords","tag-donald-trump","tag-established-homes","tag-estimated-two-thirds","tag-everyday-property-investors","tag-federal-budget","tag-graham-young","tag-inflation-rate","tag-investment-group","tag-investment-properties","tag-investment-property","tag-investor-exodus","tag-james-kirby","tag-jason-edwards","tag-jim-chalmers","tag-love-affair","tag-mum-and-dad-investors","tag-mum-and-dad-property-investors","tag-negative-gearing","tag-negative-gearing-arrangements","tag-negative-gearing-changes","tag-negative-gearing-crackdown","tag-negative-gearing-tax","tag-nerida-conisbee","tag-north-america","tag-northern-america","tag-numbers-work","tag-oceania","tag-private-equity-funds","tag-private-investor-activity","tag-property-advisers","tag-property-experts","tag-property-investment","tag-property-investors","tag-ray-white","tag-rent-increases","tag-rental-returns-set","tag-residential-market","tag-residential-property","tag-residential-property-market","tag-stamp-duty-rules","tag-super-funds","tag-tax-concession","tag-tax-deduction","tag-tax-mansions","tag-tax-rules","tag-united-states-of-america"],"_links":{"self":[{"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/posts\/7449","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/comments?post=7449"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/posts\/7449\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/media\/7450"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/media?parent=7449"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/categories?post=7449"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/australia\/wp-json\/wp\/v2\/tags?post=7449"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}