Melbourne investors left the market but rents didn’t jump

Economists and the housing industry have repeatedly warned that the Albanese government’s removal of key investor tax concessions (negative gearing on existing homes and the 50% CGT discount) would drive rents higher by pushing investors out of the market.

These claims typically ignore that rents have already surged nationally over the past four years due to the federal government’s record net overseas migration. This surge in rents occurred under the old negative gearing and CGT rules.

Interestingly, since the announcement of the tax changes in May’s federal budget, rental growth has eased, and the vacancy rate has jumped to its highest level in nearly five years: