Many Melbourne landlords are selling investment properties due to a convergence of increased compliance obligations, higher land tax, and recent interest rate rises that are squeezing cash flow while rental income hasn’t kept pace.
What’s changed for landlords?
Victoria’s rental reform program since 2021 has increased compliance obligations for landlords. Recent changes to land tax thresholds affecting investment properties, combined with two recent rate rises, are further reducing the attractiveness of small landlord ownership.
What does this mean for buyers?
Exiting landlords are creating buying opportunities, particularly in established suburbs like Officer, Pakenham, and Wantirna. These properties often come with solid tenants and a proven rental history. KR Peters monitors this inventory closely and alerts registered investors to suitable opportunities.
The honest reality
It’s not a fire sale, but the conditions favour sellers who are willing to meet the market. Properties priced to reflect current borrowing capacity are selling, while those still based on 2021 optimism are not. Sellers who price to 2026 borrowing capacity are transacting.
Questions to consider
- What is the actual after-tax cash flow on a potential investment, given current interest rates and rental income?
- How will future rate rises impact your ability to cover mortgage repayments?
- Are you prepared to accept a negatively geared property, and what is the likely shortfall?
Talk to KR Peters for a straight-talking appraisal with no obligation.
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Market information is general in nature and reflects conditions
at the time of publication. For advice specific to your property,
contact KR Peters.