Cheltenham: property investors flee as tax pressures surge, leaving renters with fewer homes

The new year is set to spell a “nail in the coffin” for renters who were hoping for reprieve in their bid to find homes as investors exit Melbourne in droves.

Investors are ditching Victorian properties in a bid to beat another tax blow at the start of 2025, with a leading bayside agent revealing he hit a sad milestone over the weekend.

Ray White Cheltenham’s Trevor Bowen sold his 40th rental home for 2024 on Saturday, but with Victoria’s land tax and pressure on investors driving the sell off he said just one of the homes had been bought with plans to put it back up for lease.

According to PropTrack data Melbourne had a 59.2 per cent clearance rate from 677 results reported on Saturday.

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Earlier figures from the firm have indicated close to 30 per cent of sales across Victoria were for properties that had previously been rented out.

With land tax bills set to hit on January 1, Mr Bowen said he was encountering many investors keen to finalise a sale before Christmas.

The past weekend was the last chance for most investors to take a home to auction and secure a 30-day settlement that would allow them to get out before the new year.

The agent added that investors who were selling up were then spending the money in Queensland or around Perth in Western Australia.

Ray White Cheltenham’s Trevor Bowen warned 3 Oak Ave, Cheltenham, was the 40th investor-owned property he has sold in 2024.

“The pool of available rental properties will shrink significantly – I genuinely worry about how this is going to affect tenants,” he said.

“With immigration into Melbourne climbing, we need more housing, not less, the state government needs to do something.”

The latest rental home being sold by Mr Bowen was at 3 Oak Ave, Cheltenham.

The keys went to a young Hawthorn couple who will pay $1.366m as they trade Melbourne’s leafy east for bayside living.

The 635 sqm is located in a highly-sought area in Cheltenham.

Mr Bowen said this result was signalling bad times ahead for tenants with shrinking rental options.

“We’ve seen an unprecedented rush of investors looking to offload their properties,” he said.

“Holding onto properties in Victoria is financially untenable for many landlords.

“The compliance costs are another nail in the coffin for many – landlords are required to spend up to $7000 annually just to ensure their properties meet the updated standards, it’s a burden that homeowners don’t face, which feels quite unfair.”