New Year, New Risks: What Landlords Should Watch for in 2026
By Kellie Andriessen
The start of a new year is always a valuable time for landlords to pause, review their position, and plan ahead. With market conditions continuing to shift, staying informed is one of the most effective ways to protect your investment and avoid surprises.
Following recent industry training, market briefings, and this week’s 0.25% interest rate increase, several key risks are shaping the landscape for landlords in 2026.
Rising ownership costs
Operating costs for investment properties remain at historically high levels, and the recent interest rate rise will add further pressure for many landlords.
Inflation continues to affect maintenance, repairs, materials, trades and services, while council rates, insurance premiums and other ownership costs are also trending upward. Construction and rebuilding costs remain elevated, which can significantly impact repair and reinstatement expenses if damage occurs.
With borrowing costs now higher again, it’s important for landlords to review cash flow, ensure budgets are realistic, and confirm that building replacement values remain accurate and reflective of current costs.
Rental affordability pressures
Cost-of-living pressures continue to affect many households, and this remains a key risk area for landlords. Rents have continued to rise, and many tenants are now spending more than a third of their income on housing.
With higher interest rates placing pressure on both landlords and tenants, the risk of rent arrears increases. Staying proactive with rent monitoring, early communication, and timely follow-up on missed or partial payments is essential to prevent arrears from escalating and impacting income.
Buying and selling rule changes
Investor activity remains strong, but 2026 brings important regulatory changes that may influence future decisions.
Lending rules are tightening around high debt-to-income ratios, which may affect borrowing capacity for some investors, particularly in a higher interest rate environment. From 1 July 2026, additional compliance requirements will also apply to property transactions, including enhanced identity verification for buyers and sellers.
While these changes won’t affect day-to-day tenancies, they are worth factoring into longer-term investment and exit planning.
Ongoing legislative changes
Residential tenancy legislation continues to evolve, with recent years bringing widespread reforms across most states and territories. Changes around rent bidding, pets, rent increases, notice periods, minimum standards and tenant protections have already altered how properties are managed.
Further changes are expected in NSW during 2026, making it increasingly important for landlords to stay informed and ensure ongoing compliance. Legislative compliance is not only a legal requirement — it also plays a key role in effective property management.
Shifting market trends
Market conditions continue to evolve, shaped by government housing initiatives, population growth and changing renter preferences.
Demand is increasingly focused on energy efficiency, flexible work-from-home spaces, walkable locations, pet-friendly homes and alternative housing options such as granny flats and multigenerational living. While these trends can create opportunities, they may also bring additional considerations around suitability, management and compliance.
Understanding how these trends affect your specific property can help guide future decisions and avoid unintended risks.
Planning ahead
Property investment has always involved a balance of opportunity and risk, and 2026 is shaping up to be no different — particularly with interest rates rising again.
Taking time early in the year to review finances, understand market conditions, and plan for potential challenges can help landlords remain resilient and well-positioned. A well-maintained, compliant property combined with proactive management remains one of the strongest foundations for long-term success.
If you have questions about how recent changes may affect your property, or would like guidance moving forward, our team is always happy to assist.
— Kellie