Positive Gearing on the Rise: A Smart Shift for Landlords

The Australian property market continues to shift, and savvy landlords are reaping the rewards. 

For several years now, more investors have found their rental properties are covering costs and, in many cases, delivering a profit. This change is giving landlords greater financial security and more predictable returns, especially in competitive markets like Brisbane.

If you are an investor or landlord, understanding why this trend is happening and how you can take advantage of it could be the key to boosting your property’s performance.

Why More Landlords Are Seeing Positive Returns

By FY22, 51% of Australian property investors were positively or neutrally geared, meaning their rental income met or exceeded their expenses. Industry leaders report this trend has continued through to 2025, with many investors now in a stronger cash flow position. 

Recent estimates suggest around 40% of investment properties nationwide are currently positively or neutrally geared, compared to significantly fewer before COVID.

Before the pandemic, negative gearing dominated the market, with most investors relying heavily on tax deductions to offset losses. Surging rental prices from 2021 onwards, combined with more strategic property choices, have shifted the balance toward positive returns. 

Key factors driving this include interest rate conditions that have allowed some investors to benefit from rent growth outpacing repayments, tight rental markets that keep yields healthy, and strong population growth into South East Queensland supported by ongoing infrastructure investment.

Brisbane’s Current Position in the Market

Brisbane’s rental market remains one of the most competitive in the country, with CoreLogic reporting a median gross rental yield of 5.1% for units and 3.9% for houses as of July 2025. 

Vacancy rates are sitting at just 0.9%, one of the lowest levels recorded in more than a decade. This shortage of available rentals has helped sustain upward pressure on rents, creating favourable conditions for investors seeking positive gearing.

High-demand suburbs such as Bulimba, Newstead, Bayside, Clayfield, and Newmarket consistently show strong rental performance, with well-presented properties in these areas leasing quickly and often achieving above-average returns.

What Positive Gearing Means for You

Positive gearing occurs when rental income covers, or exceeds, property expenses such as mortgage interest, rates, insurance, and maintenance. When there is income left over after these costs, your investment is generating surplus income that can be reinvested, used to pay down debt faster, or directed toward other financial goals.

This approach reduces reliance on tax benefits and provides consistent, real cash flow.

Key Considerations for Sustaining Positive Gearing

While the appeal of positive gearing is clear, it is important to manage the risks. Oversupply in certain pockets, unexpected maintenance costs, or changes in lending conditions can affect returns. Regular rent reviews, proactive property management, and investing in areas with long-term appeal help protect and sustain yields.

Practical Tips for Landlords to Maintain Positive Gearing

1. Review rental income regularly
   Check market rates every 12 months to ensure your rent is competitive and reflective of demand in your suburb.
    
2. Minimise unnecessary expenses
   Stay on top of maintenance before small issues become costly repairs, and review your insurance and service contracts for better rates.
    
3. Consider value-adding improvements
   Strategic upgrades, like fresh paint, updated kitchens, or air conditioning, can justify higher rents and attract long-term tenants.
    
4. Work with a proactive property manager
   An experienced manager can help secure quality tenants, reduce vacancy periods, and ensure rent is collected on time.
    
5. Monitor interest rates and refinance when appropriate
   Even a small drop in your loan rate can improve cash flow significantly over the long term.
    
6. Diversify your portfolio
   Balance higher-growth properties with those delivering strong yields to spread risk and maintain steady income.

The Outlook for Positive Gearing

With Brisbane’s vacancy rate below 1% and strong migration inflows expected to continue, the city is well positioned for sustained rental demand. For landlords, this means the opportunity to achieve and maintain positive gearing remains strong, provided their investments are well-located and professionally managed.

How Aurora Property Can Help You Maximise Returns

At Aurora Property, we help Brisbane landlords:

• Understand the complete income and expense profile of each investment
• Identify opportunities for positive gearing in high-demand areas
• Implement strategies that protect yields and support long-term growth
   

Positive gearing is no longer just a passing trend. It is becoming an established and profitable approach for many Australian property investors. If you would like a personalised review of your property’s income potential or want to explore how positive gearing could work for you, contact Aurora Property today.

With offices in Bayside, Bulimba and Clayfield, our local expertise ensures your investment is in the right hands.