FoundIt head of research Kent Lardner has issued a dire warning for renters. Picture: Supplied
THOUSANDS of rental bedrooms have vanished across Queensland in the past three years, with experts warning the proposed tax shake-up will lock future landlords out of the market.
Because the budget reforms are grandfathered for current owners, the policy is expected to dry up new investor demand rather than trigger a sudden spike in sales.
Exclusive analysis by FoundIt reveals the rate of ex-rental home sales is already far outpacing new investor purchases, long before the July 2027 negative gearing changes take effect.
While historical data shows the number of existing landlords selling up has slowed, the true threat to the market is a failing replacement rate.
Tenants in affordable markets like Toowoomba are most at risk as the rental pool shrinks. This unit rents at $440 a week
FoundIt’s data, which tracked an annual market snapshot during the month of May, shows the state lost a combined 12,929 rental bedrooms across 2024, 2025, and 2026.
Last month alone, 993 Queensland landlords exited the market while only 661 new investors entered to replace them.
Mr Lardner warned the May figures barely captured the impending crisis, as transactions recorded last month reflected decisions made before the Budget.
“We haven’t even seen the tip of the iceberg,” he said.
“Since the Budget, there is much less incentive for new investors to buy. The bottom line is that we are losing more rentals than we are gaining in two-thirds of the market.”
Kent Lardner: ‘tip of the iceberg’
In May alone, the state bled 1,897 rental bedrooms in Greater Brisbane and 2,094 across regional areas. The hardest-hit regions included Townsville (196 bedrooms lost), Toowoomba (169), Rockhampton (137) and Gold Coast’s Ormeau-Oxenford band (136).
In Greater Brisbane, Springfield-Redbank lost 122 bedrooms, Ipswich Inner 107 and North Lakes 104.
The contraction hit as PropTrack data showed a slight rise in vacancy rates to 1.01 per cent in Brisbane and 1.3 per cent regionally, though REA Group economist Luc Redman warned the relief would be short-lived.
New investment purchases are needed in Townsville, where a two-bedroom unit in this North Ward complex rents at $550 a week
“Vacancy rates remain significantly lower than five years ago. Long-term dwelling supply will likely be marginally lower, placing greater upward pressure on rents,” Mr Redman said.
Herron Todd White CEO Peter Maloney said the tax shake-up created a “double shock” alongside high interest rates, rocking market confidence.
“Australia’s property market is now facing a rare convergence of pressures, with higher interest rates colliding directly with major policy reform targeting property investors at a time when housing supply is already critically constrained,” Mr Maloney said.
The upcoming reforms limit negative gearing on residential property to newly built dwellings and replace the 50 per cent capital gains tax discount with cost-base indexation and a minimum 30 per cent tax on gains from mid-2027.
PropTrack senior economist Luc Redman
Leanne Spring, co-founder of Tailored Buyers Agents, said the changes marked the end of an established wealth strategy, noting 80 per cent of investor lending historically went to existing homes.
“For a generation, the standard playbook for many investors was to buy an established investment property and negatively gear it,” Ms Spring said.
“From mid-2027, that lever looks set to be pulled back.”
Ray White chief economist Nerida Conisbee said government suggestions the reforms would seamlessly transition renters into first-home buyers were flawed.
This family home at Ormeau on the Gold Coast costs $1,400 a week to rent
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“The rental market is not a static pool where one renter neatly transforms into one owner-occupier,” Ms Conisbee said.
“The buyer may be a higher-income household… meanwhile, the renter may not be financially capable of purchasing at all. When that rental property disappears, the renter does not magically disappear with it.
“If policies reduce the number of rental properties in high-demand suburbs, rents will rise, not because landlords suddenly become greedier, but because there are fewer homes available.”
* Additional reporting by Aidan Devine
Ray White chief economist Nerida Conisbee
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