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As previously discussed by Broker Daily, there has been an uptick in the scrutiny of property investors.
The Australian Taxation Office (ATO) has introduced a variety of measures that are pushing investors out.
Todd Polke, investment strategist and author of Escape the Middle, said that investors have become a “scapegoat” in the media.
The ongoing housing crisis has people pointing fingers, with property investors becoming an easy target.
“It’s easy to paint them as greedy or uncaring, but the truth is far from that. Most investors are everyday people who’ve taken proactive steps to create more security for themselves and their families,” said Polke.
He described this added scrutiny as a double-edged sword. Consumer protections are a positive outcome; however, he said some of the issues investors face through regulation can be excessive and unproductive.
“It sends the wrong message and can discourage people from entering the market – when in reality, we need investors. They provide vital housing solutions that the government has consistently failed to deliver,” said Polke.
“Just look at the Melbourne market, where overzealous taxes and anti-landlord policies have driven investors away from the state. We’re then seeing a national trend that increasingly prioritises tenant rights over landlord rights — like forcing landlords to allow pets or restricting their ability to end tenancies. These policies are more about political posturing than solving the real issue.”
He believes governments should focus less on investor activity and prioritise increasing supply and availability.
A happy medium is what is needed. Finding the right balance can prove difficult, however.
Despite the challenges facing investors, Polke has recognised an increase in activity, especially off the back of the February interest rate cuts.
With the RBA electing to hold rates at the last meeting, he said there will need to be a few more for activity to really kick off.
Still, there is a severe lack of confidence in the investment market, said Polke. Stubbornly high rates, surging construction costs, cost of living, and supply challenges are placing a strain on the ability to invest.
He believes this confidence will turn throughout 2025 once momentum kicks in.
“As households feel the pressure ease, capital loosens, and attention shifts back to growth. Combined with the strong fundamentals, this will likely trigger the next phase of property market growth,” said Polke.
[Related: Scrutiny for property investors is on the rise: What impact is it having?]
