Why "hold forever" isn't a strategy
"Time in the market" is good advice for a sound asset. It's poor advice for a house in a pocket that has stopped working, or one that now costs more to hold than your plan allows. Holding is a decision too.
The opposite mistake is just as common. "Sell on a dip" sounds disciplined, but nobody reliably times a local market, and selling costs plus tax can wipe out years of growth. A single soft quarter is not a reason to sell. A change in the fundamentals might be.
The useful question isn't "is the market up or down?" It's "is this property still the best way to reach the goal I bought it for?"
The annual review: seven triggers
| Trigger | What to look at |
|---|---|
| Growth versus the suburb | Has your house kept pace with similar houses nearby over three to five years? Persistent underperformance points to the property or the pocket, not the market. |
| Yield versus holding cost | Rent, interest rate and running costs all move. Recalculate the weekly cost to hold after rent, and check it still fits your budget with a buffer. |
| Vacancy | Longer gaps between tenants, or more incentives to fill it, are an early signal of weaker demand. |
| Pocket changes | New public housing concentrations, a run of new townhouse supply, a closed employer or a lost transport link can change a pocket faster than the suburb average shows. |
| Rezoning and infrastructure | Upzoning nearby can mean more supply next door (or development value in your own land). A new station or road can help. Check council and state planning portals. |
| Life goals | If the investment was bought to fund a home, the question each year is whether selling or borrowing against it gets you into that home sooner. Plans change: a new job, a new city, children. |
| Concentration risk | Too much of your wealth in one city, one property type or one loan structure leaves you exposed to a single shock. |
None of these is an automatic sell signal on its own. Two or three together, for more than a year, usually are worth a proper look.
What selling actually costs
Before deciding to sell, add up what you'd walk away with, not the sale price.
- Agent commission and marketing. Get quotes from more than one agent.
- Legal and conveyancing fees.
- Loan costs. Discharge fees, and break costs if any part is fixed.
- Repairs or styling to get the house ready.
- Capital gains tax, which may now be higher than you expect.
Then compare that net figure with the alternative: keep holding, refinance, or use the equity without selling. Our free Portfolio Health Check checks each property's suburb and pocket against current data and sends you a plain-English read on what's working, what isn't and your options. It's a good starting point for that conversation.
CGT under the 2026 rules
The tax on a sale has changed for many investors, and the change depends on when you bought.
For established residential property acquired after 7:30pm AEST on 12 May 2026, from 1 July 2027 rental losses can only be offset against residential property income and gains, with unused losses carried forward. From 1 July 2027 the 50% CGT discount is replaced by an inflation-indexed cost base, with a 30% minimum tax rate for resident individuals (the gain taxed as the last slice of income). Assets held before 1 July 2027 are treated as sold and reacquired on that date, keeping the old discount on the gain to that date. Qualifying new builds can choose either treatment. Properties owned before 12 May 2026 keep the old loss treatment. Your accountant can tell you how it applies to you.
Two practical points follow:
- Timing a sale around 1 July 2027 may matter, because of how the gain up to that date is treated. That's a question for your accountant before you list, not after.
- Carried-forward rental losses on post-May 2026 purchases may be usable against the gain when you sell. Keep good records.
The 2026 tax changes guide explains the rules in more detail.
Selling isn't the only answer
A review often ends in something other than a sale:
- Refinance to a better rate or structure (a mortgage broker can assess this).
- Adjust the rent at the next lawful review, if it's well below the market.
- Improve the property where a modest spend lifts rent or reduces vacancy.
- Change property manager if vacancy or arrears are the real problem.
- Use the equity towards the next step, if your broker and accountant agree it fits.
Making it a habit
Pick one month each year, pull the numbers and answer one question: would I buy this property today, at today's price, for today's goal? If the answer is yes, that's a reason to keep holding. If it's no, that's the time to talk to your accountant and a broker.
General information only. Nothing on this site takes into account your objectives, financial situation or needs, and it is not financial, credit, tax or legal advice. Past performance is not a reliable guide to future performance.