When to Sell or Hold Your Investment Property
One of the biggest questions every property investor faces is whether to sell or hold their investment property.
While the temptation to cash in when property prices rise can be strong, the true power of property investment lies in holding for the long term.
Before jumping into some of the benefits of holding property for the long-term, let’s take a quick look at the recent performance of the Perth property market.
Perth Property Market: What the Data Reveals
According to REIWA, as of August 2025, the median house price in Perth reached $800,000, reflecting an 14.3% increase over the past 12 months. Unit prices also trended upward, jumping 17.8% to $552,500 over the past year.
Why Holding Can Deliver Stronger Returns: The Power of Compound Growth.
Compound growth is the process where your investment not only grows in value but that growth begins to generate additional returns over time.
In property, this means that as the value of your investment increases, future growth is calculated on the new, higher value rather than just your original purchase price.
For example, if you bought a property for $400,000 and it appreciated by 10% in the first year, it would increase in value by $40,000.
At this point the property would be worth $440,000.
If the property price grew another 10% in the second year, it would increase in value by $44,000 – an additional $4,000 compared to the first year.
While these additional gains might be minimal in the initial years, over the long term, this compounding effect significantly accelerates wealth creation.
This makes holding your property a more powerful strategy than selling too early.
Options Other Than Selling: Leverage Your Equity
Rather than sell, another option is to use the rising equity in your investment property to grow your investment portfolio.
For example, if you bought an investment property for $500,000 and it’s now worth $800,000, you could look to use the equity as a deposit to buy another investment property.
Avoid Fees and Taxes
Selling triggers agent commissions, legal fees, and capital gains tax, all of which eat into your profits.
Staying invested helps you avoid these costs entirely, while you continue to hold your assets so they can grow over the long term.
When Selling Might Be Justified
Holding is powerful, but there are exceptions when you might need to sell.
- If the property no longer aligns with your long-term strategy.
- If the location or market conditions limit growth potential.
- If holding becomes financially unmanageable.
In many cases though, holding and leveraging equity is the smarter path forward.
To summarise, holding your investment property allows you to ride that growth, build equity, and leverage it to build your property portfolio.
Additional sources:
Perth Property Market - Prices, Trends, Forecast [August 2025]. (n.d.). Which Real Estate Agent. https://whichrealestateagent.com.au/property-market-update/perth-wa/
Active listings drop to record low. (n.d.). reiwa.com.au. https://reiwa.com.au/news/active-listings-drop-to-record-low/
Lawless, T. (2025, August 17). Perth Housing Market August 2025 - Reacceleration and a booming unit sector. Property Update. https://propertyupdate.com.au/perth-housing-market-monthly-update-video/
Chris. (2025, April 4). The power of compound growth. Momentum Wealth. https://momentumwealth.com.au/articles/power-of-compound-growth/
