Over the five years to 2023, the number of Australians investing in property has inched up from about 2.21 million to 2.26 million but the profile of those investors is shifting. Most now own only a single rental and it is getting harder to turn a modest foothold in the market into a multi-property portfolio. This shift is playing out against a backdrop of strong house prices, rising interest rates through 2022 and 2023 and more complex rental regulations, all of which are raising the bar for would-be "mega landlords".
Tax office data shows around 72% of investors, about 1.62 million people, own just one rental property. At the other end of the spectrum, the number of individuals with five properties has slipped by just over 5% to roughly 18,800 while those with six or more have fallen nearly 7% to about 19,400. Industry groups point to higher running costs from mortgage repayments and land tax to trades and maintenance as key reasons investors are trimming back. Many so-called "family investors" seem comfortable stopping at a single property, seeing it as a manageable level of risk that often covers its own costs in a tight rental market rather than the first step towards building a large empire.
Lending conditions and policy changes are also reshaping behaviour. Bigger deposits, stamp duty, tougher bank serviceability tests and rising interest rates make each additional property more capital-intensive than the last. Some long-term landlords are using the current market to de-risk, selling down or redirecting funds into superannuation or other assets that do not attract maintenance or land tax bills. At the same time, more sophisticated investors appear to be moving holdings into structures such as companies, trusts or self-managed super funds which are not fully captured in individual investor statistics. Property inside SMSFs has climbed from about $163 billion in 2019 to roughly $219 billion in 2024, although most of that is commercial rather than residential.
Stepping back, the trend seems to be fewer individuals managing very large portfolios even as the overall investor base grows. That could mean a rental market more reliant on smaller one-property landlords at a time when private investors already supply the bulk of rental homes. If higher costs and tighter rules continue to discourage multi-property ownership, particularly in states with more aggressive rental reforms, rental supply could come under further pressure, although the full impact is clouded by the shift to alternate ownership structures and changing retirement strategies among older investors.
