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When and Why Do Landlords Retain Property Investments?

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  • Gavin A. Wood
  • Rachel Ong

Abstract

This paper examines factors influencing Australian landlords’ decisions to retain their rental investments. A variety of statistical techniques are applied to uncover the factors precipitating the exit of landlords from rental housing markets. It is found that middle-aged investors are more attached to rental investments than younger investors. However, once retired, there is a sharp increase in the likelihood of exit from rental investments. The estimates also confirm the importance of financial variables. Leveraged loss-making investors with higher gross rental yields are more inclined to terminate leases. It is concluded that fiscal and monetary policy settings play an important role in shaping rental housing investment decisions, since interest rate and tax parameters are important in determining investors’ negative gearing status. These will in turn drive changes in housing supply and affordability in rental markets.

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  • Gavin A. Wood & Rachel Ong, 2013. "When and Why Do Landlords Retain Property Investments?," Urban Studies, Urban Studies Journal Limited, vol. 50(16), pages 3243-3261, December.
    • Handle: RePEc:sae:urbstu:v:50:y:2013:i:16:p:3243-3261
    DOI: 10.1177/0042098013484544
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    References listed on IDEAS

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    Cited by:

    1. Parkinson, Sharon & James, Amity & Liu, Edgar & Hayward, Richard Donald, 2018. "Navigating a changing private rental sector: opportunities and challenges for low-income renters," SocArXiv f3h4s, Center for Open Science.
    2. Hulse, Kath & Martin, Chris & James, Amity & Stone, Wendy & Hayward, Richard Donald, 2018. "Private rental in transition: institutional change, technology and innovation in Australia," SocArXiv yqbxj, Center for Open Science.
    3. Kath Hulse & Zoë Goodall, 2023. "Reforming the Private Rental Sector: Challenges in the 2020s and Beyond," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 56(2), pages 240-248, June.
    4. Martin, Chris & Hulse, Kath & Ghasri, Milad & Ralston, Liss & Crommelin, Laura & Goodall, Zoë & Parkinson, Sharon & Webb, Eileen O’Brien, 2022. "Regulation of residential tenancies and impacts on investment," SocArXiv sr65b, Center for Open Science.
    5. Huang, Donna & Parkinson, Sharon & James, Amity & Liu, Edgar, 2018. "Navigating a changing private rental sector: opportunities and challenges for low-income renters," SocArXiv 4yjsw, Center for Open Science.

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