The ATO data, released exclusively to the ABC, shows the only investors making an average rental loss in 2022–23 were those with 19 or more property interests, both on an individual investor and individual rental basis.

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In 2022–23, profits from investor-owned rentals plummeted 73 per cent.

In dollar figures, that equated to net rental income (income after expenses) falling from almost $5.9 billion in 2021–22, to less than $1.6 billion in 2022–23.

Despite the drop, investor numbers, and the number of rentals they owned, shrank less than 1 per cent, suggesting falling rental profitability did not trigger any significant rental sell-off.

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The ATO data showed mega landlords with 20 or more rentals were the only group that made average losses throughout the COVID-19 era of record-low interest rates.

Mr Eslake says this underscores the importance of negative gearing to the wealthiest investors and scuppers the argument that it is predominantly used by "mums and dads trying to get ahead".