Australia’s rental market is facing renewed pressure as property investors warn they may increase rents or sell their properties amid rising costs, higher borrowing expenses and upcoming changes to taxation rules.

Investors say they are reassessing their portfolios as they face increased mortgage repayments, regulatory changes and uncertainty surrounding future returns. Some landlords have indicated they may raise rents by up to 15 per cent in an effort to maintain cash flow, while others are considering leaving the residential property market altogether.

The warnings come as national rental prices remain at record highs, with housing data showing the average weekly rent across Australia has continued to climb. Real estate agencies have also reported a rise in the number of investors seeking property valuations, suggesting more owners are considering selling rather than holding their assets.

Property experts say the combination of interest rate pressures and changes to negative gearing and capital gains tax arrangements could influence investor behaviour. They warn that if more landlords exit the market and fewer new investors enter, the supply of rental homes could shrink further, adding more pressure on tenants.

Real estate professionals have described many investors as being in a “wait and see” position, assessing how policy changes will affect their finances before making decisions. Some landlords are choosing to increase rents during scheduled reviews, while others are preparing properties for sale.

For renters, the situation adds to existing affordability challenges. Many households are already dealing with higher living costs, limited rental availability and increased competition at property inspections. Tenant advocates warn that further price rises could push more Australians into housing stress.

The debate has placed renewed focus on Australia’s housing shortage and the challenge of balancing investor confidence with tenant affordability. While governments argue reforms are aimed at improving long-term housing outcomes, industry groups warn that policies affecting investors must consider their impact on rental supply.

With demand continuing to outpace available housing in many areas, economists say increasing construction and maintaining a stable investment environment will be critical to easing pressure on Australia’s rental market.