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ABS data has shown a surge in the number of new investor loan commitments, outpacing the growth of owner-occupier loans.
Investors have rebounded from two consecutive quarterly declines in new loan commitment numbers to dominate growth in the June 2025 quarter, according to new data released by the Australian Bureau of Statistics (ABS) on Wednesday (13 August).
According to the ABS, 49,065 investor loans were approved in the June 2025 quarter, marking a 3.5 per cent rise from the previous quarter.
By comparison, 80,929 new owner-occupier loans were approved, representing 0.8 per cent quarter-on-quarter growth.
The total value of new investor loan commitments was $32.9 billion, representing a 1.4 per cent (or $443 million) quarterly rise.
This figure was also 6.9 per cent higher than the value of investor loans reported during the same period in 2024 ($30.7 billion).
Meanwhile, the average investor loan size rose $1,104 to $674,259.
Overall, there were 129,994 new loan commitments for dwellings, representing a 1.9 per cent rise on the March 2025 quarter, with the total loan value up 2.0 per cent to $87.7 billion.
Commenting on the data, Dr Mish Tan, ABS head of finance statistics, said it was too early to see the impact of rate cuts.
“June quarter’s overall rise in home loans followed a fall in the March quarter. Through the year growth was more subdued at around 0.2 per cent. That said, lending activity is still at relatively high levels,” she said.
“While there were rate cuts in February and May, we will not see the full impact of these on new home lending activity until later in the year.”
She also reiterated that the 3.5 per cent quarterly growth in investor loan numbers came off the back of two consecutive quarterly declines.
“While annual growth slowed to 0.8 per cent from 27.0 per cent in the June quarter 2024, the number of new loans remained historically high,” she added.
Investors vital to boosting supply: HIA
Meanwhile, ABS data showed modest growth in the number of owner-occupier loans to first home buyers, up 1.7 per cent (or 492 loans) to 28,861.
Housing Industry Association (HIA) chief economist Tim Reardon said this illustrated the crucial role investors played in increasing housing stock.
“Investors typically supply around a third of all new homes built in Australia but are a larger share of the market at present due to a lower level of activity from owner occupiers,” he said.
“Investors are not as adversely impacted by a rise in the cash rate, as they are not as sensitive to change in economic conditions or interest rates.
“Investors also accessed around a third of all loans for the purchase of an established home over the past six years. This is consistent with the ownership of the housing stock, which sees around a third of all homes available for rent.
“It is typical to see investors return to the market ahead of owner occupiers as they are less risk averse. We are in the middle of that cycle at present.
“Investors have been returning to the market, increasingly confident that ongoing strong population growth, tight labour markets and recovering household incomes will see the supply of homes outpaced by demand.”
Investor confidence
Speaking to The Adviser for an upcoming investor lending feature in its September magazine, Fred Morelli, director of Adelaide-based brokerage Solid Finance, said investors at all stages of their journey have been trying to enter the market.
“There’s a lot of people trying to get into the investment market as a first-time opportunity, but we’ve definitely seen the customers that do own more than one property are now going to their second or third or potentially fourth sort of purchase,” he said.
“It’s a bit of a weird swing – normally you’d have one way or the other. It’s a wide market. People are trying to get into property. They feel there’s been such substantial growth over the last four or five years. That fear of missing out is where young investors are sort of coming from.
“The heavy investors have thought there are good margins. And if they don’t make a great margin on a new purchase, they’ve definitely got it on existing assets in the background.”
[Related: Investor activity high amid dip in value of new housing loans]
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