Legislation and Leasing in Focus

The Australian property market has experienced significant turbulence over the past year, driven by interest rate shifts, legislative changes, and a dynamic rental environment. Nationally, 2024 saw approximately a 20% increase in landlords selling properties, many motivated by elevated sale prices and the strain of rising mortgage repayments. The Reserve Bank of Australia implemented multiple interest rate hikes in 2023, particularly in May and November, affecting landlords on variable or expiring fixed-rate loans. As a result, many found rent increases insufficient to match escalating mortgage costs.

Concurrently, South Australia underwent the most substantial reforms to its Residential Tenancies Act in three decades, with changes introduced on short notice. These developments influenced both landlord decisions and tenant behaviours, contributing to a tightening rental market marked by reduced investor activity and declining affordability.

However, early 2025 has presented signs of recovery. Recent interest rate cuts have begun to lure investors back into the market, including a noticeable rise in "rentvestors"—young Australians choosing to rent in lifestyle-focused areas while investing in more affordable suburbs. Vacancy rates have also shifted, and for the first time in years, some regions have reported decreasing rent prices, prompting a renewed focus on tenant retention and education.

This complex backdrop continues to reshape the investment landscape, property management practices, and housing access across Australia, with agencies needing to adapt rapidly to new norms and expectations.

“Every single property manager in South Australia had seventeen days to become compliant.”

Peta Seaman, Managing Director at Edge Recruitment SA, sat down with Deanne Goodwin, Property Management Department Manager at Gary J Smith Real Estate, to explore the evolving challenges and shifts within South Australia's rental and investment property landscape.

Goodwin highlights a pivotal development: “From a property turnover perspective, we saw about a twenty percent increase in landlords looking to sell last year compared to the year before.” This shift was attributed to both favourable sale prices and tightening financial conditions due to rising interest rates. Landlords exiting fixed-rate mortgages faced repayment increases that rents couldn’t fully offset.

Investor activity also took a downturn in late 2024. “There weren’t as many investors in the market, which made a tight rental market,” Goodwin explains. Increased property prices and mortgage costs made investments less attractive, limiting supply for tenants and intensifying competition. However, this trend showed signs of reversal in early 2025, with interest rate cuts reviving some investor interest—particularly from interstate buyers.

Crucially, July 2024 marked a seismic shift in South Australia’s rental legislation. “It was the most significant change to our tenancies act in thirty years,” Goodwin states. The updates included prohibitions on blanket pet bans, stricter rules around ending leases, and the end of no-cause terminations. These changes were compounded by poor communication: “The government decided to announce mid June that the first of July was the date that we all needed to be compliant.” The result was a frenetic 17-day window to overhaul systems, educate landlords and tenants, and meet legal obligations.

This pressure cooker scenario forced property managers to manage heightened emotional responses from both landlords and tenants, as well as their own staff. Yet amidst the chaos, Goodwin notes unexpected positives: “Quite a few of our team members stepped up… and we actually worked out we have a really good ability to adapt in a high-pressure situation.” The upheaval also encouraged self-managing landlords to seek professional support, opening growth opportunities for agencies like hers.

In terms of demographic shifts, the rise of “rentvestors” has been notable. “Typically a younger person who rents where they want to live and suits their lifestyle… but buys in a more affordable suburb,” says Goodwin. This strategy balances lifestyle goals with investment growth, as rental income covers much of the mortgage.

Rising rents in 2024 caused tenant stagnation, but 2025 has shown a new trend: “This [is the] first time since pre-COVID… we’ve actually had to drop rent prices.” Tenants are negotiating rent at lease renewals, and vacancy durations are increasing, though media coverage has lagged behind the reality. Agencies now spend more time educating landlords on the value of securing and retaining high-quality tenants, especially with reduced eviction options under new legislation.

Practical Takeaways for Property Managers and Landlords

• Prepare for rapid compliance shifts by building flexible, scalable systems that can quickly adapt to legal changes.

• Educate landlords continuously—especially when media narratives lag behind market realities—to manage expectations and ensure informed decisions.

• Focus on tenant retention by recognising the importance of good-quality tenants and offering lease terms that reflect current market dynamics.

• Leverage demographic trends like rentvesting to attract younger investors and tailor services to meet their unique needs.

• View crises as opportunities to strengthen team resilience, leadership, and adaptability in high-pressure environments.