Investors continue to make up an oversized share of property loan volumes and values.
Property investment has increased over the past year, with investors now making up around their highest share of new lending since 2017, according to PropTrack research.
The PropTrack-Terri Scheer Investor Report 2025 found that about one in seven Australians own a rental property, with around two-thirds of investors owning a single investment property, while a further one-fifth own two.
Unsurprisingly, property investing is far more common for high-income households: 28 per cent of the highest income fifth of households invest, while just 6.5 per cent of the lowest income fifth do.
Nationally, the most popular investor areas include inner-city Sydney and Melbourne and their surrounding areas.
Separate research from Cotality also showed an uptick in investor activity.
Investors drove a rise in the volume and value of new home loan commitments in the June quarter, with investor loan commitments up 3.5 per cent compared to a 0.9 per cent lift for owner-occupiers.
The value of new investor loan commitments rose 1.4 per cent over the quarter to $32.9 billion, up 6.9 per cent over the year.
Cotality research also found that investors continue to make up an outsized share of both total loan volumes (37.6 per cent) and loan values (37.7 per cent) relative to historic averages.
This was particularly clear in markets like Western Australia, the Northern Territory, and Queensland, with investors potentially chasing capital gains in these recent overperforming markets.
What’s behind property investing growth?
Consistent house price growth has helped lift prices near record highs and made the investment market increasingly lucrative.
More than 90 per cent of investment properties sold in the past year were profitable, around the highest share on record, according to PropTrack.
Rapid home price growth, particularly in Adelaide, Brisbane, and Perth, has been particularly beneficial for selling investors.
Even in Sydney and Melbourne, where price growth has been softer, 90 per cent and 80 per cent of investor sales, respectively, were profitable.
Tight rental market conditions and this year’s interest rate easing cycle, which has lowered mortgage rates, have also fuelled strong investor activity in the past year.
Rate cuts to keep investor interest strong
Markets and major banks are forecasting at least one further interest rate cut this year or early next.
Future rate cuts combined with continuing tightness in the rental market are likely to keep investor interest strong.
That should help investors maintain a significant share of market activity, as they have throughout the past year.
Commenting on property investor activity, REA Group senior economist Angus Moore said investors are now making up a substantial share of new lending.
“The number of new investor loans has risen solidly in the past two years, after a quieter period when the RBA started raising rates,” he said.
Moore also noted tight rental market conditions and a rapid increase in rents in recent years.
“That’s likely encouraging investors to buy in,” he said.
“With markets expecting at least one further rate cut by the Reserve Bank and challenging rental market conditions persisting, strong investor activity is likely to continue over the rest of this year and next.”
[Related: House prices accelerate into spring selling season]
