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Why Property Investors Are Key to Solving Australia’s Housing Crisis

Why Property Investors Are Key to Solving Australia’s Housing Crisis

The Housing Market Dilemma – Investors as the Solution, Not the Problem

Australia’s housing crisis has reached a tipping point. With rental affordability at an all-time low, construction delays worsening, and supply failing to meet demand, policymakers are scrambling for solutions. Yet, one group that should be part of the solution, property investors, is being sidelined.

Instead of encouraging investment in rental supply, government policies and media narratives are pushing investors away, exacerbating the crisis. At Ramsey Property Wealth, we believe responsible property investors play a vital role in delivering housing for Australians. Without private investment, the rental market will collapse under demand pressure. So, how did we get here; and what’s the way forward?


The Root Causes of Australia’s Housing Crisis

1️⃣ Housing Supply is Failing to Keep Up with Demand

Fact: Australia is projected to fall 150,000 homes short of its target by 2029.
Despite record-high migration and rising demand, housing supply is slowing down, mainly due to:

  • Construction bottlenecks : Labour shortages and rising material costs.
  • Planning delays: Slow council approvals add months or years to projects.
  • Investor pullback: Government policies are discouraging private rental investment.

The impact? Fewer new homes, higher competition, rising rents and homelessness.

2️⃣ The Rental Market is Under Extreme Pressure

Fact: Vacancy rates in major cities are below 1%.
With fewer investors purchasing rental properties, Australia is facing a critical rental shortage.

  • Rents in Sydney, Melbourne, and Brisbane have risen 12-20% in the past year.
  • Demand for rental properties is outstripping supply 5 to 1 in some regions.
  • Long-term tenants are being squeezed out due to lack of availability.

Solution: Instead of restricting investors, we need to incentivise long-term rental supply.

3️⃣ Policy Mistakes Pushing Investors Away

Fact: 1 in 3 investors sold at least one property in 2024, citing government policy as a key reason.
Several policy missteps are making property investment less attractive, driving investors out of the market:

  • Threats to negative gearing & CGT concessions: Discouraging investment in existing rental properties.
  • Increased compliance & taxes: Higher land taxes and rental reforms creating cost barriers for landlords.
  • Short-term rental restrictions: Policies aimed at Airbnb are also impacting long-term investors.

The risk? Fewer investors resulting in fewer rental properties resulting in housing affordability crisis worsening.


The Path Forward, Making Property Investment Work for Everyone

1️⃣ Change the Narrative – Property Investors as Housing Providers

The public narrative around property investors needs a fundamental shift. Investors are not the problem, they are part of the solution.🏡

We must recognise investors as:

  • Small business owners providing housing to Australians.
  • Long-term contributors to rental market stability.
  • Partners in solving the crisis, not speculative buyers driving up prices.


2️⃣ Reform Policies to Encourage Rental Supply

To solve the housing crisis, governments must work with investors, not against them.

  • Fast-track approvals for investor-funded developments to boost supply.
  • Introduce tax incentives for long-term rentals instead of discouraging investment.
  • Encourage alternative housing models (co-living, dual-income properties) to increase availability. We need smart, balanced policies that align investor incentives with housing needs.


3️⃣ The Smart Way to Invest in 2025

💡 Despite challenges, strategic investors can still build strong portfolios.

  • Look beyond major cities – Regional & high-demand suburban areas offer better rental yields & lower entry costs.
  • Focus on cash flow-positive properties – With rising interest rates, securing strong rental income is key.
  • Work with experienced advisors – Navigating policy risks & market shifts requires expert guidance.


Australia’s housing crisis cannot be solved without property investors

What’s the real solution?

  • Encourage investment in rental properties to ensure long-term affordability.
  • Cut red tape and speed up housing development approvals.
  • Shift the public perception of property investors from speculators to housing providers.


At Ramsey Property Wealth, we are helping investors build sustainable portfolios while contributing to housing stability. If you want to be part of the solution? Let’s discuss your property investment strategy today. Call the Ramsey team on 1300 001 215.