Some voices in Australian government see institutional investment as a path to solving the housing crisis
Between toppling foreign powers and pressuring NATO allies to cede ownership of the world’s largest non-continental island to the US, President Donald Trump has found time to turn his gaze to the US housing market.
Take his recent volley at institutional property investors.
“For a very long time, buying and owning a home was considered the pinnacle of the American Dream. It was the reward for working hard, and doing the right thing, but now, because of the Record High Inflation caused by Joe Biden and the Democrats in Congress, that American Dream is increasingly out of reach for far too many people, especially younger Americans,” Trump wrote last week on his social media platform Truth Social.
“It is for that reason, and much more, that I am immediately taking steps to ban large institutional investors from buying more single-family homes, and I will be calling on Congress to codify it,” he continued. “People live in homes, not corporations. I will discuss this topic, including further Housing and Affordability proposals, and more, at my speech in Davos in two weeks.”
Read in a bubble, it sounds as if ripped right out of the left-wing playbook. Read more critically, it’s a perfect example of Trump’s populist approach to capturing the votes of middle America.
Either way, there is a genuine concern that institutional investors are a blight on the US property market.
Research from the US Department of Housing and Urban Development, published in 2023, right in the middle of President Joe Biden’s term, shows that institutional investors (LLCs, LLPs, REITs, private equity funds with large portfolios) own a growing share of single-family rental homes.
They focus on low-income areas with lower house prices, regularly outbidding would-be first-home buyers with all‑cash offers, quick closings and a willingness to waive appraisals and inspections.
Private equity funds like American Homes 4 Rent, Colony Capital and Blackstone first went on a buying spree after the Global Financial Crisis, when mass foreclosures made for easy picking.
They maximise returns through higher rents, frequent rent increases, add-on fees and shifting maintenance and repair responsibilities from landlord to tenant.
Large investors are also more likely than small landlords to file eviction notices and carry through with evictions.
According to the US Government Accountability Office, 32 investors each owned more than 1,000 single-family properties in the US as of June 2022. Collectively, this totalled nearly 450,000 homes, or about 3% of all single-family rental homes nationally.
Individual investors and owner-occupiers remain the overwhelming majority of homeowners in the US, although it varies state by state, with ‘sun belt’ states having a significantly higher presence of institutional investors. Jacksonville, Florida, for instance, has an estimated 21% share of the single-family rental market held by investors with over 1,000 homes as of June 2022.
The emerging debate is whether Trump’s proposal is pure vote-winning grandstanding, or a genuine solution to America’s housing crisis.
Bringing it closer to home, could such a proposal help with Australia’s own brand of housing-related crisis?
The answer is no, for the simple reason that institutional investors have never secured a foothold in the Australian property market. In fact, there are voices in government that would like to see more, not less, institutional investment in Australian housing.
The 2023 ‘Barriers to Institutional Investment, Finance and Innovation in Housing’ report commissioned by Minister for Housing Julie Collins suggested that increasing institutional capital “is one way to increase housing supply, which would improve affordability and ease rental shortages”.
The Interim National Housing Supply and Affordability Council made 11 recommendations in the report, chief among them to place large-scale build-to-rent projects as a separately defined development type privy to fewer planning and development hurdles.
It also suggested opening up more land for “for large-scale intensive housing development” and encouraging more superannuation investment into housing as an asset class.
Housing Australia, the Australian Government's national housing agency, would also like to see more institutional investment in the Australian housing sector.
As of December 2024, Housing Australia had issued over $2.8 billion in bonds to institutional investors through its Affordable Housing Bond Aggregator (AHBA) program.
While these initiatives have coincided with an increase in institutionally backed BTR projects, the sector is still a minnow at a total capital valued of $30 billion as of April 2025 compared to Australia’s total dwelling value of $12 trillion (i.e., barely scraping 0.25% of the Australian housing market, houses and units combined).
The logic behind pumping these numbers up, according to AMP Bank chief economist Share Oliver, is that institutional investors “are more likely to hold for the long term as opposed to the individual mum and dad investors (who dominate in Australia) who tend to be shorter term… it’s seen as a way of boosting the supply of affordable housing”.
These aren’t fundamentally apples-for-apples comparisons of course.
On the one hand, Trump says he wants to curtail institutional investment in stand-alone houses to give American Dreamers a leg up. On the other hand, the conversation in Australia revolves around allowing more corporations to build high-density build-to-rent stock to take the pressure off the rental market.
They both have their virtues, but the jury’s out on whether anything good comes out of it, or if it’s all just a load of vote grabbing.
