A word from Bluestone Home Loans

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First home buyers may have dominated headlines last year, but in many ways, the segment with all the momentum in 2025 was property investors.

While official figures for the year 2025 have not yet been released, property investors catered for 40.7 per cent of all demand for new mortgages in the September 2025 quarter, according to Australian Bureau of Statistics (ABS) data.

During this reporting period, the total value of new investment loans set a new record high of $39.8 billion, surpassing the previous peak of $33.8 billion set during the June 2025 quarter.

To put that all into perspective, this means the volume investor lending has almost doubled since 2015, when it sat at $23.2 billion. Indeed, the average loan size for new investor loans reached a new high of $686,000 in the September quarter, beating the previous record achieved the prior quarter (when it was $674,000).

But it’s not just the value of investment properties that has been driving this growth – the sheer number of investors seeking finance for property has been rapidly rising, too. According to the ABS, the number of new investor loans surged to 57,624 – a 12.3 per cent year-on-year jump – and the largest number recorded for new investor loans (in seasonally adjusted terms).

So, what has driven such a significant surge in activity?

According to Tony MacRae, chief commercial officer at Bluestone Home Loans, a number of forces have been at play. “Prices are still going up, so capital appreciation is still absolutely there for investors, even though some of the yield has come off a little,” he says.

“It’s really being fueled off the back of pure supply and demand dynamics where we just don’t have enough stock. And bricks and mortar is still seen as a really safe haven investment for people to plan for their futures and to build wealth.”

House prices

The rise in investor lending broadly mirrors increases in house prices.

Bluestone’s 2026 Investor Insights for Mortgage Brokers, compiled with ABS data and Cotality insights, notes the strong annual change in dwelling values observed in December 2025, including high-paced growth outside traditional hotspots of Sydney and Melbourne.

Darwin was the nation’s biggest growth capital, rising 17 per cent throughout 2025 to reach a new record high, according to Cotality data, with double-digit annual growth also observed in Brisbane (+12.8 per cent) and Perth (+13.1 per cent).

In addition, the report noted listings for 2025 were down 18.3 per cent on the five-year average and down 14 per cent compared with the previous year, tightening supply and intensifying demand.

Meanwhile, rental incomes saw a spike, with headline rents up 6.2 per cent in regional areas and 4.5 per cent in capital cities, according to Cotality.

Off the back of this, MacRae says he expects to see demand hold up in the near term.

“We’ve still got strong migration and I see activity continuing through 2026. We probably won’t see the growth in prices as strong as we saw in 2025, but I’m certainly not of the school that we’re going to see a plateau or a dip over the long haul,” he says.

“Month to month, there might be a slight variation. But if you look over the quarters and over the year, I think we’ll still see a strong market.”

Hotspots and regulation

Unsurprisingly, a red-hot investor market has drawn the attention of the prudential regulator.

At roughly 41 per cent, the segment is edging ever closer to the 45 per cent mark that prompted the Australian Prudential Regulatory Authority (APRA) to impose temporary ‘speed limits’ on the investor lending back in 2014.

In its recent System Risk Outlook, released last November, APRA warned that an uptick in high loan-to-valuation ratio (LVR) loans under the government’s expanded 5 per cent Deposit Scheme – launched ahead of schedule in October 2025 – and intensifying competition among lenders could put pressure on underwriting standards and encourage riskier behaviour.

Since then, the regulator has announced new rules targeting high debt-to-income (DTI) mortgages to “pre-emptively contain housing-related risks”.

As of 1 February, banks are now limited to lending, on a quarterly basis, up to 20 per cent of new owner-occupier loans and up to 20 per cent of new investor loans to borrowers with a debt-to-income (DTI) ratio of six or higher.

Non-bank lenders are exempt, although APRA has said that it will be watching for any spillover that could shift risk their way and would step in if necessary.

Another interesting wrinkle has formed in the trust and company lending space, a mechanism employed by some property investors to improve borrowing capacity.

Just last year, the Property Investors Council of Australia (PICA) warned about the rise of unlicensed advisers encouraging clients – often through social media – to purchase property through trusts to fast-track their portfolios and work around loan servicing limits.

In October 2025, non-major lender Macquarie temporarily paused new home loan applications for borrowers operating through a company or trust, citing rising volumes, service pressures, growing promotion of trust-based strategies, and extra verification requirements.

Following that, majors Westpac, CBA, and ANZ have also tightened eligibility and cut maximum loan-to-value ratios for trust and company borrowers.

Focus on brokers

No matter what unfolds, it appears there will be plenty of investor activity in the property market throughout 2026. But what are investors looking for in a loan today?

For MacRae, there are several elements that go into really nailing this segment.

“Part of the cornerstone of what we’ve tried to do over the last few years is really build our proposition on service. Through BDM activity and our lending team, we deliver quick turnarounds and commonsense answers,” he says.

“Then that’s backed up with flexible income requirements and being able to give choice so that investors can really secure that aspirational property.”

Ask the questions. Paint the story, and lenders like Bluestone will normally have a solution-based outcome that will help customers achieve their property aspirations
– Tony MacRae, chief commercial officer, Bluestone Home Loans

He also notes the work Bluestone has done to cater for property investor niches such as those purchasing through self-managed super funds (SMSFs) and expat buyers, as well as recent initiatives targeting investors interested in the commercial market.

“Brokers are able to submit the application 100 per cent through ApplyOnline, which is fairly unique in the commercial marketplace,” he adds.

“We’ve had lots of great feedback on that particular front. We’re really embedding ourselves in that commercial space, both through SMSF but just through normal investment will be a really important part of the next year for Bluestone.”

For brokers who wish to target more business from property investors, MacRae recommends putting a big focus on building their networks and partnerships.

“Partnerships are really important,” he adds.

“And moving beyond the traditional real estate partnerships and getting into solicitors, accountants, financial planners and then seeing where their opportunities are.”

MacRae also encourages brokers to adopt an open-minded approach.

“We’ll help customers that have had maybe a financial hiccup through being able to look at the going forward position as opposed to just relying on the reflecting backwards position. Don’t accept that there’s a customer who can’t be helped,” he says.

“Ask the questions. Paint the story, and lenders like Bluestone will normally have a solution-based outcome that will help customers achieve their property aspirations.”