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Nearly 40% of Australian homeowners are eyeing a market exit within five years


In the challenging landscape of the Australian property market, new research from Compare the Market indicates a significant portion of homeowners are considering selling their properties in the near future. Almost 40% aim to put their homes on the market within the next five years, with roughly 30% of these individuals looking to downsize.

Detailed findings from the research show that 6.2% of homeowners have plans to sell within a year, 12.4% within two years, and 20.7% within five. Despite this, a majority of 60% do not plan on selling, opting to stay in their current homes.

The past year and a half have been notably difficult for Australian borrowers, marked by 13 cash rate increases and a surging cost of living. Andrew Winter, a property expert at Compare the Market, highlighted that for many the selling decision is not entirely voluntary. “While our research shows that many homeowners are planning to sell in the near future to upsize, downsize and move to a different area, the harsh reality is many are selling up shop because they have no other choice,” he stated.

Why are you selling your property?Total
Moving to a different suburb25.10%
Financial pressures19.50%
Cashing in on investment property8.10%
Moving to a different state7.80%
Struggling to pay second mortgage on investment property3.80%
Moving overseas3.00%
Other (please specify)2.80%
Poor rental returns2.30%
Too much red tape for investors1.00%
Survey of 1,005 Australian homeowners, conducted in September 2023.

Landlords, in particular, face hurdles due to increased property taxes, rising costs, and stringent tenancy laws, prompting a steady exit from the market for some. “Unfortunately, a number of landlords are exiting the property market because of an increase in property taxes, fees and stricter tenancy legislation. They simply can’t afford to pay for a second mortgage,” Winter revealed.

Investment loans carrying higher interest rates compared to owner-occupied loans compound the situation, influencing property owners to prioritize their personal residences over investment properties.

Intentions behind property sales vary, with 31.4% looking to upsize, 30.1% planning to downsize, 25.1% wanting to move to another suburb, and 19.5% succumbing to financial pressures.

Winter pointed out that downsizing could play a critical role in addressing Australia’s rental crisis. “When empty nesters finally decide to downsize… this allows other investors to snap up that property and rent it out to people in need,” he said, advocating for rental reforms that protect tenant interests without disadvantaging landlords.


However, despite the potential benefits they bring to the housing market, investors are shying away due to fiscal burdens and bureaucratic challenges. Almost 9% are selling their investment properties to realize gains, yet some face losses, with CoreLogic’s Pain and Gain reports showing a median loss of $30,000 for properties sold in under two years.

Winter advises property owners to consider a range of factors before selling, including purchase cost, selling costs, capital gains tax, and potential impacts on personal time and finances. He suggests a minimum five-year holding period to potentially see capital growth, depending on property type and location.

With the market conditions driving many changes, Compare the Market offers homeowners the opportunity to gain deeper insight by obtaining a free property report on their website.

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