New data has shown investor loans have surged back to record levels as tight rental markets and shifting rate expectations reshape where and how capital is flowing.
Investors have charged back into Australia’s housing market, with the 2026 PropTrack and Westpac Investor Report showing a sharp rebound in investor borrowing since 2023.
The report found that the number of new investor loans had risen by 64 per cent from its early‑2023 low, lifting investors’ share of total housing finance close to the highest levels recorded since 2017.
Although owner‑occupier activity strengthened after interest rates steadied through 2024 and began easing in 2025, the pick‑up in investor borrowing had been much more pronounced.
Queensland’s investor share of housing lending climbed to its highest point since 2004, Western Australia’s is approaching the strongest reading since 2010, and NSW has returned to its most investor‑heavy mix since 2017.
In South Australia and the Northern Territory, the proportion of loans going to investors reached new highs at stages during 2025, only fractionally below record levels at the end of the year.
Victoria is moving in the same direction, yet from a weaker base.
While the report showed activity there improving in the second half of 2025, the investor share of new lending in Victoria remains below its long‑run average.
Capitals where investors dominate
In NSW, investors make up 44 per cent of home loans in 2025, up from 37 per cent at the end of 2022, pointing to a steady, multi‑year climb, while in Victoria, investor loans now represent 36 per cent of total lending.
In Brisbane and the broader south‑east, loans to investors rose a further 8 per cent between 2024 and 2025, pushing the investor share of total lending to 41 per cent – roughly double the level recorded in December 2020.
South Australia has shown a similar pattern, with investor loans also accounting for about 41 per cent of finance, while in Western Australia, investors now hold 40 per cent of the state’s housing lending.
In the closing months of 2025, around 93 per cent of investor sales delivered a profit, the strongest result in at least a decade, with almost every investor sale in Brisbane, Adelaide, and Perth achieving a price above its original purchase cost.
Affordability focus and cross‑border buying
Nearly half of inquiries from investors over 2025 were for homes priced below $700,000, indicating a tilt towards relatively affordable stock.
The report revealed that investors were also looking beyond their home states in significant numbers.
About one in five investors purchased their investment property in another state or territory, with cross‑border buying most common in smaller markets.
Around 40 per cent of ACT investors, 60 per cent in the NT, and 42 per cent in Tasmania acquired properties interstate.
By contrast, investors in Queensland, South Australia, and Western Australia tended to stay close to home, with only around 12 per cent of investors in those states buying beyond their own borders.
‘Disciplined’ investors as prices set to cool
Westpac’s managing director of mortgages, James Hutton, said the credit trends through 2025 pointed to a market that had gradually regained momentum.
“As conditions became more stable, confidence returned in measured ways. From a mortgage perspective, we saw investors adapt – focusing on affordability and maintaining exposure to traditional markets,” he said.
Hutton emphasised that the operating environment remained demanding even as activity accelerated.
“The year was not without its challenges. Higher costs and ongoing uncertainty tested confidence, and decision making was rarely straightforward,” Hutton said.
REA Group senior economist Angus Moore said the national lending data made clear how strong the investor comeback had been.
He added that capital gains had delivered unusually strong outcomes for existing landlords.
“On top of that, home prices have continued to rise, meaning that share of investor sales recording a profit has been the highest in at least a decade,” he said.
Westpac group chief economist Luci Ellis said the outlook for 2026 suggested that the market was transitioning from rapid price gains to more moderate growth as interest rates edge higher.
“We expect price growth to cool in 2026 to a more sedate 5 per cent gain nationally, down from 8 per cent in 2025, and with a more pronounced slowing in the ‘hot’ markets of Brisbane and Perth,” she said.
Moore said that even with higher borrowing costs, the rental market in its current state was likely to keep investors engaged.
[Related: RBA says households can shoulder higher rates]
