62.3% of Investors Are Now Cash-Flow Negative. The Negative Gearing They Give Up by Selling Cannot Be Bought Back

On 11 September the Property Investment Professionals of Australia released its 2026 Annual Investor Sentiment Survey. Two findings did the rounds: 62.3% of respondents are cash-flow negative, and 18.3% sold at least one investment property in the year to August. Both are book numbers for brokers. But the finding that should change what you do next week is not in the survey at all — it is in the commencement rule of a tax measure that passed in June.

What the PIPA survey actually found

PIPA surveyed 626 property investors across Australia during August 2026 and published the results on 11 September. It is a member-and-database survey rather than a probability sample of all investors, so it reads best as a strong directional signal from an engaged investor cohort — not as an ABS-grade population estimate. Read that way, the direction is unambiguous.

On selling, 18.3% of respondents said they had sold at least one investment property in the preceding 12 months. That follows 16.7% in 2025 and 14.1% in 2024 — three consecutive annual increases, which makes this a trend rather than a spike. Where those properties went matters just as much: PIPA reports 51.6% of the sales went to owner-occupiers and a further 12.4% to first home buyers. In other words, the majority of these dwellings left the rental pool on settlement.

“Rental homes are leaving the market now, and our members are seeing it play out in real time.”

Cate Bakos, Chair, Property Investment Professionals of Australia

On cash flow, 62.3% of respondents reported negative cash flow, up from 56% a year earlier. Reporting of the survey by The Adviser adds further detail from the same research: 41.5% described their position as “tight”, 8.8% said they were drawing on savings to cover shortfalls, and 41.7% reported holding expenses rising 11–20% over the year.

On intent, only 27.8% said they plan to buy another investment property, down from 41% the year before. Just 44.1% viewed the coming 12 months as a favourable time to invest in residential property, against roughly 60% in the prior survey. Among those not planning to buy again, The Adviser‘s reporting of the survey puts the share citing the negative gearing and capital gains tax reforms as an influence at 63%.

The number that isn’t in the survey

The reforms announced in the 2026–27 Federal Budget are no longer a proposal. Baker McKenzie records that the Treasury Laws Amendment (Tax Reform No.1) Bill 2026 passed the Senate on 25 June 2026, and the ATO’s guidance page for the measure states plainly: “These measures are now law.”

The substance, in the ATO’s own words, is to “limit negative gearing for residential property investments to new builds” and to “replace the 50% CGT discount for individuals, trusts and partnerships with cost base indexation and a 30% minimum tax rate on capital gains”. Both apply from 1 July 2027.

The transitional rule is the part that matters for your files. The ATO states that “Properties held at announcement (7:30pm AEST 12 May 2026) will be exempt from the negative gearing changes, while the CGT reforms will only apply to gains that accrue after 1 July 2027.” Budget documentation adds that for established properties acquired after Budget night, investors can still deduct rental losses against residential property income and carry forward unused losses, but will not be able to deduct them against other income such as wages. New builds sit outside the negative gearing change altogether, and Budget material indicates new-build investors can choose between the 50% CGT discount and the new arrangements.

Why grandfathering changes the sale conversation

Here is the piece most of the coverage moved past. The exemption described by the ATO is framed around the property held at a moment in time, not around the taxpayer. William Buck’s analysis of the measure puts it directly: properties held as at 7:30pm on 12 May 2026, including those under contract awaiting settlement, “can continue to be negatively geared until they are sold.” Baker McKenzie’s reading is consistent — the reform language ties treatment to dwellings acquired after that moment.

Follow that through. An investor who holds a grandfathered established property and sells it has not merely realised a capital position. On this reading, the deduction profile attached to that asset ends with the sale, and buying a different established property afterwards does not restore it — because the replacement was not held on Budget night. The client can re-enter the market, but not on the same tax footing, unless they buy a new build and take the treatment that applies there.

For years, the sell-and-rebuy decision was largely reversible in tax terms. Transaction costs and duty were the friction; the underlying deduction rules were the same before and after. That is no longer the case for established residential property. A broker does not need to be able to quantify the difference to recognise that it exists, and that it belongs in front of an accountant before a property is listed.

This is where the timing problem sits. By the time a broker sees a discharge authority, the contract is usually signed. The conversation that would have mattered happened weeks earlier, often between the client and a selling agent, and frequently without a tax adviser in the room. PIPA’s cash-flow findings suggest a meaningful group of investors are making that call under financial pressure, which is exactly when advice is least likely to be sought and most likely to be needed.

The servicing question your panel hasn’t answered out loud

There is a second consequence that runs straight through your submission quality, and it is one worth raising with your lenders directly rather than assuming.

Servicing calculators have long handled negatively geared investment property by applying a negative gearing benefit in the assessment. If, from 1 July 2027, rental losses on an established property acquired after 12 May 2026 can only be applied against residential property income rather than against salary, then the assumption underneath that calculation does not hold in the same way for those purchases. How each lender reflects that — whether by adjusting the tax treatment in the calculator, by date-stamping the security, or not yet at all — is a lender-by-lender question.

The Broker Times has not seen a panel-wide statement of how lenders are treating this in assessment, and brokers should not assume a uniform approach. The practical step is a direct question to each BDM you rely on for investor volume:

• Does your servicing calculator currently distinguish between an established investment security acquired before and after 7:30pm on 12 May 2026?
• If not, is a change scheduled, and what is the date?
• For a new-build investment purchase, is the treatment different again?
• What evidence of acquisition date will credit expect on file?

Getting a written answer now is worth more than discovering a capacity difference at credit assessment on a file you have already priced and promised.

What it does to your investor pipeline

If you run an investor-weighted book, the intent numbers are your forecast. A fall from 41% to 27.8% in the share of surveyed investors planning another purchase is roughly a third of that cohort’s forward demand stepping back within a single year. Sentiment surveys overstate volatility, and intent is not settlement — but a movement of that size in a single year is not noise.

The commercial implication is not that investor lending disappears. It is that its composition shifts. If negative gearing now favours new builds, the investor purchases that still make sense on an after-tax basis will skew toward new stock — which means different valuations, longer settlement timelines, construction and off-the-plan policy, progress payments, and sunset clauses. Brokers whose investor experience is entirely established-dwelling refinance and purchase will find the next wave of investor work sits in a policy area they use less often.

There is a retention implication too. When an investor sells, the loan usually leaves. PIPA’s finding that most of those sales went to owner-occupiers and first home buyers means the outgoing security is often being bought by someone who needs finance — sometimes a first home buyer who has never spoken to a broker. That is a referral perimeter worth building with the agents handling those listings.

The line a broker cannot cross

None of the above licenses a broker to tell a client whether to sell. Advising on the tax consequences of disposing of an asset is tax advice, and providing it for a fee or reward is the domain of a registered tax agent under the Tax Agent Services regime — not something a credit licence or credit representative authorisation covers.

What the best interests duty does require is that the credit assistance you provide is in the client’s best interests. In a scenario where a client’s stated objective is to restructure or refinance an investment portfolio, and where a materially different tax outcome may attach to one security and not another, a defensible file shows that you identified the issue, told the client in general terms that it exists, referred them to their accountant or registered tax agent, and recorded the response before recommending a product. It does not show you working through the tax maths yourself.

Check the precise wording your licensee expects. Aggregators are likely to issue guidance as 1 July 2027 approaches, and your compliance team’s template beats a form of words from an article.

The portfolio triage: a one-hour job

What to watch next

• ATO guidance detail. The current page is high-level. Watch for guidance on acquisition date evidence, partial interests, and the definition of an eligible new build.
• Lender calculator updates. The first lender to publish a date-aware investor assessment will set the panel’s benchmark.
• Rental supply data. If PIPA’s finding that most investor sales go to owner-occupiers holds at a market level, vacancy and rent series through late 2026 and 2027 are where it will show.
• New-build investor policy. If after-tax logic pushes investors toward new stock, expect product and policy movement in construction and off-the-plan lending.

The bottom line

A survey telling you that investors are under cash-flow pressure is useful but not, on its own, actionable. What makes this week’s data worth an hour of your time is what it collides with: a tax rule, already law, under which a decision your client may be about to make quietly forecloses an option they cannot get back.

Brokers cannot advise on that. But brokers are frequently the only professional who sees the whole portfolio, knows the cash-flow position, and speaks to the client before a selling agent does. Using that position to route the client to proper advice in time is not a tax service. It is exactly the sort of thing a best interests duty file is supposed to look like — and it is a better reason to pick up the phone this week than most.