Why are property investors selling up?

CoreLogic report shows investor selling activity is persisting while owner-occupier listings are waning.

Residz Team 4 min read

Why are property investors selling up?

Right now, there’s a real estate trend that has captured the attention of CoreLogic.

Australia’s property investors appear to be selling up.

CoreLogic’s latest research report shows that in Sydney, Melbourne and Perth, the number of property investor listings on the real estate market for May appear well up on the previous decade average.

While not as high as the record peak in mid-2021, investor listings in some cities make up as much as 30% - 40% of all listings.  

It’s worth mentioning the property analytics company doesn’t know exactly whether properties are owner-occupied or investor-owned. Instead, they infer which properties are investor-owned from their rental history.  

But, if close to correct, it seems 7 out of 8 of Australia’s major cities are seeing a greater sell-off of investment properties (as a % of listings) compared with the decade average.


CoreLogic says that the “City and Inner South” areas of Sydney topped the list of regions with the highest proportion of investment listings.

Normally, these areas have a 10-year average of 38% of new listings coming to the market from investors, say CoreLogic.

But in May, property investor listings surged to 57%.

It comes as the number of properties being listed by owner-occupiers is falling. As CoreLogic says, investor selling activity is persisting when owner-occupier selling decisions are waning.

One is keen to sell, the other is reluctant to sell. So what could be behind this?

Drivers to sell up an investment property

My own experience as a first home buyer many years ago was to sell up my little Canberra rental property to release capital to buy a Sydney home to live in. Rentvester first home buyers might be doing just this.

CoreLogic suggests the higher interest costs over the year may be a driver.

“While rents have risen at a record pace over the past few years, they generally have not risen as much as mortgage costs on a new loan,” it says.

It estimates the mortgage costs on a $500k loan will have increased $580 per month to $3213.

If this interest is becoming a burden on top of the rising costs of goods and services, or leading to housing stress, it follows that some investors may look to offload their investment.

Another possible key driver put forward by CoreLogic is capital growth.  It says Perth’s home values have held steady, and reached a record high in May, coinciding with a higher proportion of investor listings and a higher volume of new investment listings (19% higher than the previous decade average).

However, it’s not exactly clear why investors are selling, says CoreLogic.

“Individual circumstances would apply to each listing, and without asking the vendor directly, it’s unknown what the drivers are,” it says.

Drivers not to sell an owner-occupier property

CoreLogic doesn’t share why sales of owner-occupier properties may be waning. However we can take some educated stabs.

Lack of supply is the biggie, we imagine. If you sell the house you live in you have to go and live somewhere else. Home owners don’t want to move to something inferior unless they have to, and the number of listings overall has been down.

High rental costs and low vacancy rates might put owner-occupiers off selling, because they don’t want to compete for a reduced number of rental properties nor do they want to pay high rents.

Costs of selling and buying elsewhere could be a factor. Stamp duty (the tax paid when you buy a home), moving costs, professional services fees - these all add up - and could add up to a “stay” decision for buyers.

Subdued market conditions might also be a factor in owner-occupiers staying put. They saw the huge price gains in 2021 and want some of that action, thank you very much. While there has been a lift in property prices in Australia recently, owner-occupiers might be waiting to see if their area has a surge in price before they list.

Construction costs could be top of mind for some owner-occupiers who might once have sold to build a new home or buy a doer-upper. Renovation costs soared post-pandemic - possibly making this route less attractive.

Finally, status quo bias could be behind owner-occupiers settling into a comfy chair and deciding to put off selling. Change naturally invites risk, explains the Uni of Pennsylvania, and so humans have a tendency to “keep things the way they are.” Given the tumultuous changes in the pandemic, this last driver may well be at play for many owner-occupiers.

What is known is that, historically, purchasing data shows the majority of buyers are owner-occupiers, says CoreLogic.  

And, right now, they are competing with each other for a reduced number of properties for sale - no matter which type of homeowner happens to own them.

And that leads us to ask: Is FOMO back to lift the real estate market?

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Residz specialises in all sorts of research that can help renters, buyers and sellers find out information about property.

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