Tight supply keeping upward pressure on house prices, offering ‘strong fundamentals’ for property investors
Investor-side lending growth is outpacing the owner-occupier segment by a walloping 600% in New South Wales, according to new research published by money.com.au.
On a pure numbers basis, investor loans in the state were up by 12% year on year as of June 2025, based on Australian Bureau of Statistics data analysed by money.com.au, while owner-occupier loans were up just 2%.
Money.com.au property expert Debbie Hays said NSW “continues to offer strong fundamentals for property investment”.
“Investors who can still meet market prices continue to buy in the state, tightening supply for first-home buyers and keeping upward pressure on prices even as homebuyer demand stays soft,” she added.
Average NSW loan sizes underscore the difficulties placed on owner-occupiers, with the average owner-occupier loan size up 6% to $800,642, while the average investor loan size added 5% to $840,938.
While investor lending growth in NSW is broadly in line with national averages, owner-occupier lending growth in the state remains the weakest in Australia.
‘Extraordinary’ house price growth
On a national level, home loan sizes have soared to record levels across both segments since the Covid-19 pandemic, defying the high interest rate environment.
CoreLogic Australia’s head of research Eliza Owen said: “One of the extraordinary phenomena of the current cycle is that despite higher interest rates, we've also seen property values not only recover from a short, sharp decline where the market bottomed out in the beginning of 2023, but values have actually managed to climb back to new record highs.”
Owen partially attributed this to high levels of net migration, as well as a decline in the number of people per dwelling. Soaring construction input costs have also been a factor.
As of June 2025, the National average loan sizes were:
- First-home buyer loan: $554,961
- Refinance home loan: $582,137
- New investment property loan: $674,259
- Average investment loan refinance: $643,449
While the average first-home buyer home loan deposit has increased by more than 50% since 2020, this is expected to fall sharply when the Home Guarantee Scheme expansion comes into effect next month.
Under this expansion, all Australians regardless of income will be able to buy a home with just a 5% deposit. Annual quotas have been removed entirely and house price thresholds have been significantly increased.
The Housing Industry Association expects this expansion to reduce the amount of time it takes to save up for a deposit by as much as four years.
However, there are mounting fears that the expansion will pile even more upward pressure of house prices, potentially offsetting the scheme’s benefits to first-home buyers.
The Reserve Bank of Australia (RBA) added to the chorus of concern on Monday.
